On March 11, 2011, Japan suffered from a triple disaster—a9.0 earthquake (its worst in recorded history), followed by a 20-foot tsunami, followed by a nuclear power plant accident that emitted harmful radiation. A lot of non-Japanese firms that relied on made-in-Japan products were ill-prepared for such a sudden and major breakdown of their supply chain. Thanks to the “lean manufacturing” movement that also originated from Japan a generation ago, inventory levels at many factories around the world are now days’ and even hours’ worth. When “just-in-time” delivery fails, the supply chain can easily break down. From a supply chain management standpoint, one of the most crucial lessons from Japan’s earthquake is to always have a plan B. In other words, there is value in “just-in-case” management. Debate the pros and cons of investing in trust-building mechanisms such as “just-in-case” management.
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