Extended disruption to global supply chains possible after Japanese earthquake

Organizations need to prepare for the possibility of an extended disruption to global supply chains resulting from the March 11 Japan earthquake and tsunami, Marsh warned.Rather than the physical destruction of the production facilities, most of the supply chain disruption from this catastrophe is likely going to be caused by issues associated with infrastructure, energy, utilities, transportation and restrictions on highway/port access, Marsh said in a release.The most significant initial impact will be to the high-tech, steel and auto industries quickly followed by those that depend on these industries such as medical devices, communications gear suppliers, car dealerships, solar, ship building, aviation and consumer electronics.”Given that the immediate priorities in Japan are likely to be social not economic, the aftershocks to the global economies from this disaster may unfold very slowly, many of the economic consequences have yet to be seen,” said Gary Lynch, Marsh Risk Consulting’s head of supply chain risk management.The disruptions could last for several months, he continued. “A multinational company whose supply chain could be impacted by the catastrophe should start now by assuming that its business is severely disrupted for an extended period and develop an effective mitigation strategy.”