Disaster Risk Management and Supply Chains(in Japanese)

Kenji Tanaka and Toshiya Uenoyama

ESRI Discussion paper series from Economic and Social Research Institute (ESRI)

Abstract: We explore the difficulties among corporations that manage disaster risk. What encourages a company to manage its risks? We interview Japanese manufacturing companies to find out, noting that disaster risk management compensates for the vulnerability of supply chains. We also theoretically examine mechanisms that encourage companies to embark on risk management strategies. The company that has managed disaster risk carefully typically considers customer relations to be important. It also realizes that it has an obligation to secure a stable supply of the materials and products it requires, and that disregarding risk management can result in a loss of trust. When it is not able to maintain a stable supply, it may claim to be unable to trade henceforth. The characteristics of supply chains are such that companies depend on one another: the vulnerability of the supply chain completely depends on the mutual cooperation of all involved. Even small problems within any one company can affect everyone else. The difficulties based on the character of supply chains have led to the demand of disaster risk management for companies.

Pages: 42 pages
Date: 2008-11
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