Supply chain worries as Japan Inc grinds to a halt -TOI

Posted on March 18, 2011 by

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Japan’s vaunted “just in time” approach to business has become “wait and see.” Much of Japan’s industry seemed to remain shellshocked on Thursday as the devastation from an earthquake and tsunami, combined with fear and uncertainty over the nuclear calamity, made it difficult for corporate Japan to think about business as usual.

And that has left many overseas customers and trading partners in something of an information vacuum, unsure how soon the effects of any supply-chain disruptions would make themselves felt — and how long they might last.

Even General Motors, a company that might seem to benefit from disruptions to Japan’s auto industry, finds itself in a period of watchful waiting. For one, the new Chevrolet Volt plug-in-hybrid from GM—whose sales could conceivably benefit from any production snag in Toyota’s popular, made-in-Japan Prius-—depends on a transmission from Japan.

In Tokyo, many companies-—whether Japanese or foreign-—were distracted on Thursday by plans for removing their employees from the potential path of radiation from the damaged Fukushima Daiichi nuclear power plant 140 miles north. Telephone calls and e-mails to many corporate headquarters in Tokyo simply went unanswered.

The America unit of Nissan has ordered any employees traveling in Japan on business to return home. Meanwhile, many US electronics companies were uncertain whether supplies of crucial components from Japan will hit air pocket. But Texas Instruments acknowledged that one of its Japanese factories would be out of action until July.

Technology analysts say the most persistent worry for digital device makers is the supply from Japan of so-called NAND flash — the lightweight storage chips used in smartphones, tablet computers, digital cameras and a variety of other components.

Toshiba, the world’s secondlargest maker of the chips behind Samsung of South Korea, has closed some production lines.

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Posted in: APAC