Published: March 30, 2011 | Country: United States
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Organizations that rely on Japanese manufacturers for goods and services need to prepare for an extended disruption to global supply chains resulting from the earthquake and tsunami in Japan, according to Marsh’s supply chain experts.
Most of the supply chain disruptions from this catastrophe are likely to be caused by issues associated with access to skilled labor and inventory, infrastructure, energy, utilities, and transportation. In addition, companies may face higher costs due to shipping capacity constraints and scarce inventory.
"While the immediate priorities in Japan have been social, the aftershocks to the global economies from this disaster are beginning to unfold, albeit very slowly,” noted Gary Lynch, head of Supply Chain Risk Management at Marsh Risk Consulting. “In the weeks since the disaster we have seen panic buying, some improved levels of confidence about supplier capability and capacity, and additional clarity on supply chain dependencies. At this stage, managers at multinational companies with supply chains that could be impacted by the catastrophe should continue to assume that their businesses will be severely disrupted for an extended period and will face price volatility, and should develop effective mitigation strateg ies .”
Management at multinational companies need a thorough understanding of their supply chains, including the markets they sell to, the suppliers they rely on, and the critical dependencies that exist along the supply chain.
Lynch added, “Effective planning can sometimes make all the difference whether a company survives or not."
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Marsh’s local dedicated claims team and client executives have been mobilized to support our clients in their business recovery.
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