Supply Risk Alert: Toyota Halting Production in Japan

Here's a supply risk humdinger: Toyota is halting production in Japan following earthquakes in the region. According to the AP, "the temporary closure of auto parts maker Riken Corp.'s plant at Kashiwazaki city, near the epicenter of Monday's magnitude 6.8 quake, was forcing the halt," a Toyota spokesman said. AMR's Mark Hillman tipped me off to the story this morning, and we had the chance to quickly trade email thoughts on it. He brought up how interconnected and co-dependent even the "best supply chains" are and how country risk matters -- not to mention that there are some risks that even the best procurement organizations (and supply chain partners) cannot mitigate against. In my view, whenever there's such a high concentration of regional suppliers as there are in Japan and Southeast Asia, it's the supply risks like this that can often appear to come from nowhere which can cause the most damage. Consider this earlier post of mine on Apple's Risky iPod supply chain as but one example of regional supply risk.

Jason Busch

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