2011 Tōhoku Earthquake Supply Chain Shock

The Tōhoku disaster taught manufacturers that one damaged supplier deep in the chain can stop production on other continents. After the March 11 earthquake and tsunami, Japanese automakers halted their plants, and Renesas's Naka factory, which made a little under 20% of the company's microcontrollers and system chips, mainly for cars, stayed closed until June. Carmakers worldwide faced chip shortages for months. Many companies responded by mapping lower-tier suppliers, adding safety stock for critical parts, and qualifying second sources. Fulfillment operators apply the same thinking when they avoid relying on a single supplier, port, or warehouse for their best-selling products.

• Safety StockExtra stock that covers demand and lead time swings
• Lead TimeTime from purchase order to sellable stock
• StockoutZero sellable stock for a SKU

• Taiichi Ohno1912–1990 · Architect of the Toyota Production System
• Yossi Sheffib. 1948 · Director of MIT Transportation and Logistics

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1. Sales down 29% for Renesas following March quake (New Electronics) newelectronics.co.uk
2. How Japanese chipmaker Renesas recovered from the earthquake (IEEE Spectrum) spectrum.ieee.org