Homeland Security Watch

News and analysis of critical issues in homeland security

April 8, 2011

Japan: Domestic supply chain begins to restore local capability

Filed under: Catastrophes — by Philip J. Palin on April 8, 2011

A larger map is available at ReliefWeb.

Almost four weeks after the initial event, private sector supply chains are beginning to operate in the most affected area of Northeastern Japan. (See Nikkei story below).   Major transportation routes are now mostly open to non-emergency cargo.   In the tsunami-inundated zone, debris still complicates distribution.

It required eleven to twelve days for minimal supply capability to be restored to the most affected areas.  In the hardest hit communities, supply has mostly been provided by the military.  To the extent private sector suppliers were actively excluded is still not clear.

The exclusion zone for the Fukushima nuclear plant sits between Tokyo and Sendai and has further complicated restoration of pre-event supply chains.

In addition to the food and general supplies noted below, Nikkei has reported, “Around 90% of filing stations operated by seven major oil distributors were up and running in six earthquake-hit prefectures as of Wednesday, according to a senior industry official. This marks a recovery from the 81% operating as of March 30.”

With the exception of fuel, the strategic capacity to supply the affected area was never lost.  It is interesting it required at least two-to-three weeks for strategic capacity to be reflected as local capability.

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TOKYO (Nikkei)–Supermarkets and convenience stores in devastated northeastern Japan are replenishing their shelves with added frequency as their crucial distribution networks return to normal.

Seven & i Holdings Co. unit Ito-Yokado Co. will open an alternative distribution center Thursday in the Miyagi Prefecture capital of Sendai, restoring service to six stores in the stricken Tohoku region to pre-disaster levels.

Ito-Yokado leased a warehouse from a trucking company to replace its damaged fresh-food distribution center. It has been shipping products to the Tohoku region from a facility in Kasukabe, Saitama Prefecture, but product volume and variety remains at 80% of pre-quake levels.

Aeon Co.’s distribution center in Sendai, which serves about 170 supermarkets in Tohoku, was back to full strength by the end of last month. Except for bottled water and batteries, supplies at these stores have almost returned to normal.

The facility, however, needs to reinstall sorting machinery. The equipment will be in service by the end of this month, but for now, products are being sorted in a Chiba Prefecture location.

In Tohoku, Lawson Inc., FamilyMart Co.  and Seven-Eleven Japan Co. now have a combined 2,150 convenience stores up and running, more than 90% of their locations in the region. Because their distribution centers and factories that make boxed meals and other products are close to each other, the impacts on production and deliveries there were compounded. But as output recovers, Lawson and FamilyMart will increase deliveries from one to two services daily in order to keep foods fresh, starting Friday or Saturday.

(The Nikkei April 7 morning edition)

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On March 30 the National Research Council released a new report, long under development, entitled,  National Earthquake Resilience: Research, Implementation and Outreach.  The report finds, “the United States will certainly be subject to damaging earthquakes in the future, and some of those earthquakes will occur in highly populated and vulnerable areas. Just as Hurricane Katrina tragically demonstrated for hurricane events, coping with moderate earthquakes is not a reliable indicator of preparedness for a major earthquake in a populated area. The recent, disastrous, magnitude-9 earthquake that struck northern Japan demonstrates the threat that earthquakes pose, and the tragic impacts are especially striking because Japan is an acknowledged leader in implementing earthquake-resilient measures. Moreover, the cascading nature of impacts–the earthquake causing a tsunami, cutting electrical power supplies, and stopping the pumps needed to cool nuclear reactors–demonstrates the potential complexity of an earthquake disaster. Such compound disasters can strike any earthquake-prone populated area.

Regardless of hazard, the more serious an incident the more critical is timely re-engagement of supply chains.   There appears to be credible evidence that supply chain capacity in Japan was largely resilient.  It also appears the transportation network was repaired with extraordinary speed.  Among the possible suspects for delaying local capability are lack of sufficient fuel, unwillingness of truck drivers to deliver (especially as the nuclear emergency unfolded), and excessive perimeter controls.  Discerning the correct lesson is an important goal for enhancing US preparedness.

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2 Comments »

Comment by William R. Cumming

April 8, 2011 @ 3:22 am

Thanks Phil! Any evidence of permanent redesign of the Japanese supply chain and transportation network coming out of this event?

Comment by Philip J. Palin

April 8, 2011 @ 5:05 am

Too soon to tell. There is a great deal of discussion about changes that need to be made in both domestic and global supply chains as a result of this quake-and-tsunami. But the same risks have been exposed by almost every major disaster and, with some minor fine-tuning, the “efficiency” (maximizing near-term financial returns) goal tends to undermine the effectiveness goal. But as another of today’s post suggests, there is evidence of thought-leader shifts toward effectiveness. That is usually where major paradigm changes begin.

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