Supply chain reconstruction will take time

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It’s going to take a considerable amount of time to reconstruct supply chains disrupted by the earthquake and tsumani in Japan.

Not my assessment, but that of the deputy governor of the Bank of Japan, Kiyohiko G Nishimura.

Speaking to business leaders in Kanagawa, near Tokyo, he highlighted supply chain disruption as one of the three key issues along side restoring production capacity and constraints on electricity supplies.

“At present, firms are working to repair or rebuild supply chains by, for example, seeking to secure alternative suppliers, including from overseas, and reviewing product specifications.

“However, as supply chains are complex and interconnected, if a bottleneck occurs in any one part of the chain, accurately gauging its impact and addressing the problem present various difficulties,” he said.

“Therefore, a considerable amount of time is considered necessary to reconstruct supply chains.”

He also highlighted the parallels with the Great Kanto Earthquake which devastated Yokohama in 1923 saying Yokohama City had become a blank slate, and from a blank slate anything was possible.

Perhaps that’s a lesson that we can all learn from this tragedy.

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