Supply Chain Lessons From Japan

From Forbes: “Boeing (BA) faces new delays in the delivery of the Dreamliner. GM (GM) slows or shutdown production in U.S. factories due to a shortage of parts. Toyota (TM) expected to lose $73 million for every day its factories are shuttered.

If there was any doubt left about the impact of globalization of the supply chain, the news this month should make it crystal clear: supply chains today are attenuated and extremely vulnerable to repercussions from events far outside the control of those who manage and rely on them.

But what about the long term? Japan’s resiliency and its people’s willingness to do the hard work of recovery are certainly not in question. A look at the impact of the Kobe earthquake in 1995 on Japan’s GDP in that year and the year following are a testament to the nation’s ability to bounce back from disaster. Still, devastation of the magnitude seen in Japan this month may take longer to clean up. The questions around the strain that the government’s debt burden places on funding for a clean-up and recovery, and the evolving issues around the nuclear plants’ stability are likely to top the agenda for the foreseeable future.” Full article on Forbes CIO Network

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