Japanese firms lag in supply chain resilience as nearly half fail to implement disaster and tension risk measures, survey shows.
TOKYO: Nearly half of Japanese companies have not implemented measures to protect their supply chains against disasters and global tensions, according to a recent Cabinet Office survey, raising the risk that factory or logistic shutdowns could halt production and impact the broader economy.
In a survey of 1,759 firms conducted between November and December, only 25.9% said they had measures in place to strengthen their supply chains, Kyodo News reported.
Supply chain disruptions have recently prompted some food companies to change the packaging of their products because of concerns over naphtha supplies linked to worsening West Asia tensions.
Japan is prone to natural disasters with major earthquakes having disrupted production in the past.
The government plans to encourage companies to take measures, such as diversifying suppliers and dispersing production sites.
A Cabinet Office official said more efforts are needed to “keep economic activity from stopping.”
By company size, 26.8% of large companies with 1 billion yen (US$6.2 million) or more in capital, 49.6% of midsize firms and 56.3% of smaller firms said they had taken no steps, the survey showed.
It also found larger firms were more likely to adopt measures to strengthen supply chains.
Some 45.0% for large firms have carried out such steps, compared with 23.2% for midsize firms and 21.8% for smaller firms.
Among firms that said they were taking steps or were considering them, 57.9% cited “diversifying suppliers” as their most common measure.
“Risk communication with suppliers” and “cooperation among companies and mutual support” followed, the survey showed.
