In the contemporary world, companies have to integrate their procedures with supply chains owing to the rising significance of effective supply chain. As every organisation does its utmost to meet their consumers’ demand, the optimisation of their supply chain management, coping with the overall flow of material from supplier to terminal users (Lysons ; Farrington, 2006), is an indispensable part of patting the whole possibility and probability of a business and their commodities or service.
Hence, supply chain management not only implies the management of the relationships amongst the shareholders and stakeholders, but also involves in the success of companies’ competiveness and profitability. A supply chain is a system of organisations, people, technology, and other resources connected with a convert of a product or service from suppliers to consumer. (Table 1) Supply chain activities shift natural resources, raw materials and components into a finished product that is transmitted to ultimate customers (Bidgoli 2010, p. 191).
The function of supply chain is the supply of products or service ordered by clients and to furnish proper form, time, place, quality and quantity. There are number of SCM strategies, however, the major two strategies are lean strategy and agile strategy. The objective of a lean strategy is to do every operation less of each resource. Besides, it organises the efficient flow of materials to eliminate waste, give the shortest lead time, minimum stocks and total cost. (Chopra & Meindl, 2007) For instance, during the development work, Sony identified the following areas of the supply chain where waste is more likely to occur.
The purpose of agile strategy is to provide the consumer with high service by responding quickly to various or changing circumstances. (Chopra & Meindl, 2007) First and foremost, agile organisations keep a close check on customer demands and react rapidly to changes. It is universally acknowledged that Japan sits astride the edge of two slowing moving plates, and as with other Pacific rim countries in the so called ring of fire this brings about the near certainty of spasmodic earthquakes.
On 11th March, 2011, Japan’s most powerful earthquake since records started has struck the north-east coast, generating an enormous tsunami (BBC, 2011). Shortly after, nuclear power station in Fukushima has exploded, destroying thousands of coastal communities. In addition, given the disaster disruption in Japanese industrial activity, the effect on global supply chains could also be crucial. This is especially vital in industries such as autos, telecommunications and consumer electronics.
It is estimated that the negative effect on global growth this year will be inappreciable- at most in the 0. 1% to 0. 2% range. (BBC, 2011) Disruption in Japanese automotive and steel production may lead to a rise in the need for these products from other regions, including the rest of Non-Japan Asia, the United States, and Europe. In particular, South Korea, Taiwan and Thailand have a slight import dependence on Japan, approximately 15%, 21% and 20% correspondingly.
(Reuters, 2011) These countries are thereby more assailable than other countries in terms of continuous disruptions in Japanese output. In cases where supply chains depend on Japanese parts, the US operations of Japanese automakers and semiconductors imported from Japan would be destruction to US production. Besides, Japan is not a substantial export market for most European countries, hence, the whole effects on European growth would be finite. Japanese earthquake and tsunami had a tremendous impact on car and electronic industry in a global scope.
With the level of international division in car and electronic goods, many multinational companies were suspended or partially suspended to some extent during the disaster. Demand will be affected as well since many electronics manufacturers are in Japan, and their consumption of semiconductors will be halted until earthquake damage is repaired. Research results in Table 3. 1 illustrate four aspects that influence Japanese-based multinational companies to pay attention to.
Effects to electronic organisations were gathered in three areas, which are Iwate, Miyagi and Fukushima. It is obvious that the accessories of Liquid Crystal Display Panels did not have direct effect on two regions, including Iwate and Miyagi. Furthermore, passive device, semiconductor, liquid crystal display panel and precision components account for dominant position in the global supply chain market. Japanese companies transformed their production manufactures into overseas market, nevertheless, it retained core parts and technologies in the domestic districts.