Executive Briefings

In Wake of Japanese Earthquake, Companies Ask if Supply Chains Can Be Too Lean, Study Finds

A year after the Japanese earthquake and resulting tsunami, supply chain managers are reconsidering just-in-time strategies, according to a survey released by the Business Continuity Institute.

BCI followed up with many companies that had reported disruption to their supply chains, examining what the long-term effects have been and as a result, what changes they will be making to their overall strategy.

With such a high number of businesses reporting disruption to their supply chain, attention has been drawn to those factors exposing manufacturers to new threats, and whether the move away from "redundancy" - idle capacity and buffer stocks, in favour of lean and "just-in-time" supply chains, has left manufacturers vulnerable in times of crisis.

Commenting on this, Lyndon Bird, BCI board member said, "The Great East Japan Earthquake exposed the acute vulnerability of a complex, interdependent system of global supply chains, which affected businesses thousands of miles away from the earthquake and tsunami itself.  The perpetual quest for supply chain optimisation has taken a pause, and we are seeing signs of a more considered approach to supply chain risk with businesses leveraging techniques such as business continuity management to better understand their vulnerability and to put in place measures to improve resilience and continuity when faced with disruption."

Click here to access the report.

Source: Business Continuity Institute

BCI followed up with many companies that had reported disruption to their supply chains, examining what the long-term effects have been and as a result, what changes they will be making to their overall strategy.

With such a high number of businesses reporting disruption to their supply chain, attention has been drawn to those factors exposing manufacturers to new threats, and whether the move away from "redundancy" - idle capacity and buffer stocks, in favour of lean and "just-in-time" supply chains, has left manufacturers vulnerable in times of crisis.

Commenting on this, Lyndon Bird, BCI board member said, "The Great East Japan Earthquake exposed the acute vulnerability of a complex, interdependent system of global supply chains, which affected businesses thousands of miles away from the earthquake and tsunami itself.  The perpetual quest for supply chain optimisation has taken a pause, and we are seeing signs of a more considered approach to supply chain risk with businesses leveraging techniques such as business continuity management to better understand their vulnerability and to put in place measures to improve resilience and continuity when faced with disruption."

Click here to access the report.

Source: Business Continuity Institute