The year 2011, Japan was struck by a magnitude-9 earthquake on the north-eastern coast in March, producing a savage disastrous tsunami. The most affected part was the Honshu Island that experienced the great impact of the tsunami. Two years later, the tsunami continued to extend its coverage up on North American beaches. This experience also affected the Fukushima Daiichi Nuclear Power Plant, which suffered a level 7 nuclear meltdown during the occurrence. Few scientists had predicted that the country would experience such a large earthquake and tsunami. Most of the Japan’s scientists only forecasted that the country will experience a smaller earthquake and did not expect such a large tsunami. In the previous decade, some Japan geologists had begun to recognize that a large earthquake and tsunami had struck the northern Honshu region in 869.
These geologists made efforts to warn the government of such an occurrence happening again, but there warnings did not receive positive response from the officials in the earthquake’s hazards assessment. The 2011 earthquake struck the offshore along a subduction zone where the Earth’s tectonic plates collide.After an examination of the subduction zone, scientists revealed that there was a thin layer of clay between the plates that allowed them to slide over each other at an incredible distance causing the enormous earthquake and tsunami. As Leckcivilize (2012) asserts, the overall impact of the tsunami had devastating effects on supply chains of many multinational businesses that had their location in Japan. The production and supply of their products experienced diminishing availability in the global market. The demand in the market was greatly affected due to scarcity.
One of the businesses that were greatly affected by the tsunami is the world’s most superior car maker and distributor Toyota. The Toyota Company had its production of automotive products affected by the tsunami and the nuclear crisis. The supply to the global market did not meet the expected demand. An example is the experienced General Motors shortage in production of vehicles at several plants due to parts shortage from the Japanese suppliers (Greimel 2011).
It was then discovered that the Japanese Company had suspended the production of parts intended to reach the overseas market. Besides, most of the businesses in Japan were reported to cut down their operations in the automotive parts. These automotive supply chain has always been complex to integrate hence a small default can affect the overall chain. If one of the parts is unavailable, then the finished product cannot be supplied. These means that for efficient supply of the finished products there must be all parts. The Toyota company experienced low returns as a result of the weakened supply chain.
The General Motors is another multinational corporation that has suffered the effects of the tsunami in 2011 for its business operations in Japan. This corporation manufactures pick-up trucks and obtains its production parts from the Japanese company Toyota. The reduced supply of motor parts greatly affected the delivery of General Motors to the global market. This posed a critical situation as the global supplier of vehicles and even resulted in decisions aimed at closing production due to an inadequate supply of parts (Buss 2011). The overall impact on the company’s profit shares was negative. The managers of this company had to balance the costs of keeping high inventories and the risk of poor production.
Another global business that was affected by the tsunami in Japan is the Boeing, a large aircraft manufacture whose most dealers depend on most of the Japan’s parts. The tsunami effected the inventory of the company as the manufactures claimed to be unsure of the supply once they exhaust their current inventory. This doubt followed the warning from Jamco, the Japanese Company that makes the galleys, which the deliveries could be affected by the increasing fuel shortage after the crisis.
Also, Caterpillar, the world’s top ranking manufacture of earthmoving equipment by revenues reported that its manufacturing factories across the globe were going to be greatly affected by the tsunami experience in Japan. Caterpillar Company had most of their supply sources in Japan. It was then discovered that the challenge in Japan could affect the big manufactures on their global supply of earthmoving equipment. To address this challenge, the company had to appraise their global supply chain for risks and locate alternative sources for parts.
Apple, like other major businesses in the world, has also suffered the effects of the tsunami in Japan. The company obtains a third of its flash memory from Toshiba. Toshiba is the major producer of computer memory chips in Japan. The tsunami impacts on Toshiba led to reduced delivery of this important parts to the world markets. Apple had maintained inventories for several weeks on the Toshiba’s supplies according to analysts. This predicted that there was going to be a shortage of the crucial components in the second quarter as analyzed by Gene Munster.
The above mentioned multinational companies approached the tsunami problem in various ways to save their supply chains and re-establish their market performance. For instance, Toyota Company had to re-open its operations to address the decrease in inventory and reach their global expectations. A recovery mechanism had to be developed to curb this challenge. It became evident that Toyota was going to re-open 70% of it’s businesses in June 2011. This was a favorable step to save the inventories of its customers and restore its competitive position in the world market of automotive production.
The General Motors managers were motivated to analyze their supply chain risks and identify the new supply of the parts. The World’s trusted car dealer had to ensure consistency in its supply to maintain their services to the market for quality products. They, therefore, sent experts to Japan to work with the supply team in facilitating the purchases and delivery as it was believed that it is the internal team that was closely related to supply shortages (Alliance 2012).
Caterpillar had to develop strategies for mitigating risks in their supply chain. The company assessed its supply chain for the risks that were caused by the tsunami tragedy on their production capabilities. The risk mitigation techniques allowed it develop new measures that addressed the shortage in supply of products and reduction in revenue.
The event of March 2011 in Japan has had adverse effects on the supply chains automobile and technology industry across the world as the country is one of the world’s largest producer of these parts. For the future response, therefore, there is a need for an informed analysis of possible disasters expected to happen and the magnitude of their impact on the supply chains of businesses. This will help develop mitigation approaches to save the supply chain of such industries and enhance productivity.
