OESA Visits Japan’s Earthquake and Tsunami-Damaged Regions
Neil De Koker, OESA

When JETRO initiated a discussion with OESA about visiting Japan in November to tour the earthquake and tsunami damaged areas, I was immediately interested in participating. The stated purpose of the trip was to assess and report on the recovery efforts within the automotive supply chain. My own interest went beyond that. I wanted to hear the stories behind the rapid recovery in the automotive supply chain.

It was a well-publicized story in North America that the Japanese plants came back online faster than anyone initially forecasted -- but that did not happen on its own. No one had a contingency plan in place for the disruption of some 500 Japanese automotive assembly and parts plants. I wanted to see how the companies regrouped and recovered so quickly. I needed go and see in order to understand. So, in late November, Margaret Baxter and I made a detour on our way to Tokyo for previously scheduled meetings.

After arriving in Japan, Margaret and I landed at the Sendai airport. There is virtually no evidence of the tremendous damage the airport suffered a few months earlier. That airport was inundated by flood water and debris, and the high water mark stands at 3.02 meters.

The Japanese government initially believed the airport might never re-open. However, it proved to be such a critical location for coordination of relief and recovery supplies and activities, that it was absolutely essential to re-open the airport to allow supplies to be flown in. Ultimately, with the help of U.S. armed forces, the airport re-opened to full operations on April 15.

The airport and its importance to the recovery of the Tohoku region is similar to the importance of recovering the many businesses, automotive and otherwise, that provide livelihoods for so many residents, and upon which so many other companies – customers and suppliers -- depend. Despite huge odds, these businesses HAD to be reopened as a way of healing the wounds left by the disaster. Returning to work helped the people recover.

I had several briefings by the automotive department of the Ministry of Economy, Trade and Industry (METI). Their status report had a great deal of details. Of the 91 production bases directly affected by the disaster:
• Ninety-three percent have completed their restoration and 80 percent are running at production levels exceeding their former levels.
• For those running below their pre-disaster levels, 70 percent intend to recover by year end.

Each supplier company we visited sustained physical damage to its facilities and showed us photos of the damage. The photos revealed buckled ceilings, desks swept clean of equipment which had fallen to the floor, turned over file drawers, collapsed roofs, buckled floors, equipment in total disarray and general scenes of chaos.

In the case of Iwaki Diecast, an entire factory was washed out to sea, leaving the base of a single press where the building had stood.

In the case of Alps Electric, the earthquake caused the ground to drop by several inches on the factory site – and the CNC and CMM equipment, although now back to normal operations, remain visibly askew in the plant as a result of the shaking.

As we toured the NOK factory, the only remaining sign of the disaster were the cracks in the cement floors that had been caused by the violent shaking of the earthquake.

Adding to the natural disaster was the ensuing lack of electricity, running water, access to communications and gasoline – both for emergency generators and for employees’ personal vehicles. Each company had difficulty communicating with employees to let them know the status of the company and where and when to report to work. NOK resorted to using the Japanese postal service – or snail mail as we call it.

Each company showed us a timeline of their recovery efforts and indicated it was just a matter of days before some aspect of production was back up and running. Iwaki Diecast sent its proprietary molds to competitors so that they could help resume production and keep its customers supplied with parts. Alps Electronics moved entire machine assembly lines to a new location -- and then back again – within several weeks to assure continuity of parts production. NOK brought in huge power generators to run its facilities instead of waiting for the municipal electricity supply to be restored and hired busses normally used for tourism to shuttle employees in to work.

What remained constant at each company was a powerful drive toward recovery – a need to resume operations, a commitment to the customer, to employees and to the community to overcome the chaos and return to normal operations. This drive, and commitment to excellence in manufacturing, is the spirit of monozukuri. There was never any question about getting back to business as usual; rather it was how fast it could be done, and what obstacles needed to be overcome to achieve that goal.

What I did not hear at any point in my conversations were discussions of force majeure, the cost of individual company recovery, strained customer or supplier relations or resourcing by customers. All I heard was a commitment to resume operations. And with that singular purpose, these three suppliers and many others like them, found the route back to production. Not only did this allow customers to feel secure in their own operations, but it provided a stable environment for employees, many of whom had lost family members, friends and even their own homes and neighborhoods. It also provided a lifeline to lower tier suppliers, who, without customer operations, would quickly be at a standstill themselves.

Together these forces have allowed the Japanese companies and workers to continue to look toward the future and a return to normalcy.

Japan’s manufacturing community will remain vibrant and responsive to its customers. The companies that were affected by the earthquake and tsunami bear the scars that will forever remind them of the disaster; however, they are eagerly looking forward to 2012 and to facing what opportunities and challenges lay ahead. The spirit of monozukuri is clearly a guiding force in the Tohoku region, and will allow the three companies I visited, and many others like them, to continue doing what they do best -- exemplifying excellence in manufacturing and meeting and exceeding customer expectations for cost, quality and delivery.

I continue to be in awe of the human spirit that comprises this great automotive industry of which we are all a part. My best wishes are extended to the Japanese people as they continue their progress in recovering from the great disaster of 2011.