The Japan earthquake exposes the world supply chain risk

The Japan earthquake exposes the world supply chain risk

The multinational corporation represented by Toyota highly praises the low stock and low cost operation mode. It will gain the high cost effectiveness in the good operation of supply chain. However, the recent earthquake blocks thw world industry chain of car and wholesale electronics. It exposed the potential risk of the operation mode.

At present, there is supply shortage of elements in US and Japan large car manufacturers and IT enterprises. And some manufacturers are even stopped. It will cause the inestimable loss. The car industry suffers from the hard loss.

The large earthquake causes the tsunami. The road network, port, railway, airport and power supply station will be greatly damaged. And the nuclear leak case makes the harder condition. Some enterprises have to stop or slower the production activity.

The car manufacturers Subaru cancel the extra work of its factory in North America. Toyota Company also cancels the extral work and production task on Saturday of ten factories in North America. The two companies are trying to ensure the present supply. And one damaged car manufacturer is located in Miyagi, Japan. The enterprise provides the components of the mix battery for Toyota Prius, Camry and Lexus hybrid vehicle. It's uncertain that when it will reoperate.

Some factories are not damaged by the earthquake. But it's hard to maintain the supply line. The needed battery of US Ford Company is supplied by a Japan manufactuer. The factory is not affected by the earthquake. But the traffic and transportation are hard to return to normal in short time. The Ford gets started to search for the replacing supplier. And they consider turning to the air transport if the shipping by sea is blocked. "Everything is possible to be changed a night." Ford spokesman Todd Nissen said.

Toyota Company said each Toyota car will possess thirty thousand of components which are from 600 suppliers. And these suppliers will have the downlink suppliers. It relies on hundreds of companies to provide the raw materials and components.

For some special models, there are even thousands of specially designed components. The steering wheel, chair and rear view mirror are different. Though we gain the 98% of the components, the car manufacturing can't be completed. The components of high tech are hard to recopy.

The disaster also attacks the Japan chip providers. The consumer electronics manufacturing from washing machine, TV to iPad and other consumer electronics are affected.

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