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Implications of the Japan disaster on Global Manufacturing
Analyst Briefing
By
Satish Lele
Vice President
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Global manufacturing – increasing complexity
The face of global manufacturing is changing
Supply chains are increasingly globalized
Japan is both an OEM as well as a component powerhouse
Japan is a key link in the high technology parts supply chain
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Japan’s manufacturing contribution
Japan’s manufacturing contribution is 10% of global production
China has surpassed the US to become the world’s factory
Japan’s exports were $770 billion in 2010, 15% of GDP, 90% of exports
Automobiles, Electronics, Machinery, Infrastructure dominate exports
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Japan’s manufacturing contribution
Japan has moved up in the value chain – high technology and quality
Japanese companies have invested significantly in overseas manufacturing locations
South Korea, Taiwan and China are Japan’s major competitors
Source: METI
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Impact of Japan disaster on manufacturing
The disruption of supply chain and its
impact is much worse than initially believed
Lean concepts have been put in question
to deal with emergency responses
The preliminary impact on global GDP
is expected to be marginal, but likely to
change
Impending price increases if shortages
persist
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Impact of Japan disaster may be prolonged
> Losing the dominance in manufacturing
> Confidence in responding to natural disasters
> Review of manufacturing concepts of JIT, Single piece flow etc.
> Increased diversification of supply chain, multiple sourcing
> Localization of key and critical components by global OEMs
> Ability to restart manufacturing facilities to full capacity
> Gaps in local supply chain – part shortages
> Impact on financial performance of major Japanese companies
> Production stoppages due to lack of critical parts in other regions of the world
> Quick wins for non Japanese suppliers
Global Manufacturing
Japan Manufacturing
Long Term
Short Term
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For Additional Information
Donna JeremiahCorporate CommunicationsAsia Pacific+603 6204 [email protected]
Carrie LowCorporate CommunicationsAsia Pacific+603 6204 [email protected]
Satish LeleVice PresidentIndustrial Technologies+65 6890 [email protected]
Jessie LohCorporate CommunicationsAsia Pacific+65 6890 [email protected]
