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| Japan crisis: Global supply chains to suffer |
| Press Trust of India / Mumbai Mar 23, 2011, 21:12 IST |
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Organisations need to prepare for the possibility of an extended disruption to global supply chains resulting from the March 11 tsunami and quake in Japan, leading insurance broker and risk adviser Marsh said.
Thousands of multinational companies that rely on Japanese manufacturers for goods and services, as well as for sales, can expect significant global supply chain disruptions lasting up to several months, it said.
The most significant initial impact will be to the hi-tech, steel and auto industries quickly followed by those that depend on these industries such as medical devices, communications gear suppliers, car dealerships, solar, ship building, aviation and consumer electronics.
Rather than the physical destruction of the production facilities, most of the supply-chain disruption from this catastrophe is likely to be caused by issues associated with infrastructure, energy, utilities, transportation and restrictions on highway or port access, Marsh said.
Japan is the world's third-largest economy and a leading supplier of parts and equipment for major industries such as computers, electronics and automobiles.
"This is yet another wake-up call for companies that have yet to strengthen the resiliency of their global supply chains. Despite substantial supply-chain disruption losses from past events, many companies operating in the global marketplace continue to manage the risk of supply-chain disruption ineffectively," Marsh India Country Head and CEO, Sanjay Kedia, said.
"Multinational companies need a thorough understanding of their supply chain, including the markets they sell to, the suppliers they rely on and the critical dependencies that exist along the supply chain," he said.
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