Wise Words About Disaster Planning for Business

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From Glenn Reynolds.

...The damage is exposing the extent to which modern supply-chain management has produced a system that is so lean it lacks the reserve capacity needed to cope with disasters.

In manufacturing, plants have been idled around the world because Japanese factories -- or often, a single Japanese factory -- serve as the sole source for a vital component. With the factories sidelined by damage or power outages, the components are unavailable, and production has to stop.
Ford Motor Company idled a plant in Belgium for five days over parts shortages; Toyota warned plants in the United States to be prepared to close for the same reason. A U.S. plant making car seats had to close because of a shortage of premium vinyl made only in Japan. Ford has suspended orders for some models in red and black because the paints come from a single factory in Japan, now closed. Tales like these abound.
Even the New York subway system is affected by the parts shortage: As National Public Radio's "Marketplace" reported: "Steel from the north of Japan can't get to Suzuki. Suzuki can't make the parts for Hitachi. And Hitachi can't send the parts to New York. The global supply chain breaks down with the removal of just one link."

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