Is there a supply chain that can withstand a major earthquake?
Posted: Tue Jul 01, 2025 9:53 am
The recent earthquake has dealt a blow to the Japanese economy, with the problem of supplying parts for industrial products. Every time an earthquake occurs, the need for decentralization of parts supply is called for, but instead, centralization advances. Why is this? We will examine the structure of the supply chain.
Independent vs. Collaborative vs. Vertically Integrated
The recent earthquake damaged production bases for automobile remove background image and electronics parts, making it impossible to supply parts. This has resulted in downstream automobile and electronics factories being unable to operate. The impact has been particularly severe in the automobile industry. In the case of the automobile industry, it took more than a month after the earthquake for assembly manufacturers' factories to resume operations. Even after resuming operations, they are still unable to return to full production. This is not limited to Japan; production cuts are also continuing overseas. This has once again confirmed just how important the parts supply chain is to assembly-based industries such as automobiles.
The vulnerability of this type of supply chain has been noticed in previous disasters. During the Hanshin-Awaji earthquake, the supply of engine valve springs stopped. During the Niigata Chuetsu offshore earthquake, the supply of engine piston rings stopped. This time, the supply of many different parts was cut off. During the Kobe and Niigata earthquakes, calls were made for the need to diversify parts supply sources from the perspective of risk management, but in reality, the opposite has happened: they have moved in the direction of centralization. In this current discussion, we will consider why centralization of supply chains has progressed.
Independent vs. Collaborative vs. Vertically Integrated
The recent earthquake damaged production bases for automobile remove background image and electronics parts, making it impossible to supply parts. This has resulted in downstream automobile and electronics factories being unable to operate. The impact has been particularly severe in the automobile industry. In the case of the automobile industry, it took more than a month after the earthquake for assembly manufacturers' factories to resume operations. Even after resuming operations, they are still unable to return to full production. This is not limited to Japan; production cuts are also continuing overseas. This has once again confirmed just how important the parts supply chain is to assembly-based industries such as automobiles.
The vulnerability of this type of supply chain has been noticed in previous disasters. During the Hanshin-Awaji earthquake, the supply of engine valve springs stopped. During the Niigata Chuetsu offshore earthquake, the supply of engine piston rings stopped. This time, the supply of many different parts was cut off. During the Kobe and Niigata earthquakes, calls were made for the need to diversify parts supply sources from the perspective of risk management, but in reality, the opposite has happened: they have moved in the direction of centralization. In this current discussion, we will consider why centralization of supply chains has progressed.