Recovery from the Japan Disaster – Achievements and Challenges

Osaka - Sunday, June 12, 2011




Nikkei, Japan’s leading newspaper specialized in economy and business, reported on June 11 about the recovery status from the Japan Disaster that resulted in 23,500 people dead or missing after 3 months. Business community in general has been recovering well. Production of many global companies is recovering even in the most hardly hit industries such as automobile and electronics.



However, recovery in other area/items remain slow. Over 90,000 people remain evacuated and much time is required for victims to return to normal lives. Financial assistance to victims and small and mid-sized companies impacted by the disaster remains insufficient. Converge of Fukushima nuclear plant accident seems to take time and electricity shortage is spreading nationwide as explained in the previous article Electricity Shortage Throughout Japan – Effects and Solutions.



1. How is the recovery status of each item?






1) Items related to lives of victims






(1) Electricity



Electricity for all houses and buildings are expected to recover by June 20 excluding those that have been swayed by the tsunami.



(2) Water



97% has recovered. 59,000 houses remain without water (as of June 7).



(3) Financial institutes



Total of 55 branches in Iwate, Miyagi and Fukushima remain closed (as of June 9).



2) Transportation infrastructure






(1) Railways



Shinkansen bullet train operation is to return to normal in autumn this year. Recovery of some local trains of East Japan Railway remains a question.



(2) Roads



All national motorways have recovered excluding those in the caution zone of the nuclear plant accident. 148 sections of prefectural motorways and local roads remain blocked (as of June 6).



(4) Ports



Approximately 45% docks of major ports have recovered (as of June 6).



3) Business community






(1) Supply chain



Overall supply chain has been recovering quicker than anticipated. This is because head offices and business partners made upmost efforts to quickly absorb the local needs to take actions for supply chain recovery.



(2) Automobile



Toyota and Nissan mostly have returned to normal production status. Honda is operating at 70 – 80% of its plan.



(3) Electronics



Semiconductor/micro computer shipment is to recover by autumn this year.



(4) Oil



Production facility of a leading Japanese oil company in Sendai is expected to recover in summer next year.



2. What is a particular case of a global company based in Japan?



An example introduced by Nikkei was of Sony.



10 production sites once stopped operating but the site in Miyagi that was the slowest to recover started partial production in the end of May. The site produces such products as Blu-ray disc recorders and the damage from the tsunami was extraordinary,



Their plan was not to recover as it was before the disaster but to remake a site to a new one. Items produced at the site were selected with care for higher efficiency and productivity. The space created is to be rented to local small and mid-sized companies that lost their offices from tsunami. Mr. Stringer, the CEO, commented when he visited the site that he felt the passion from the shop floor members to make the new site that is far better from pre-disaster.



3. How are small and mid-sized companies?



Recovery of small and mid-sized companies remain rather slow, which is why over 40,000 people in Iwate, Miyagi and Fukushima became unemployed from the disaster and seeking to fine a new job.



This is mostly because of insufficient financial assistance to such companies and individual business owners, although on June 10 Minister of Financial Affairs said with pride that maximum efforts have been made by Financial Service Agency. Some are forced to transfer not only production site but also head office function because of the ongoing effect from the nuclear plant accident, which means much financial burden.



In such a severe situation, many of them have been working hard to overcome challenges. One example is a component manufacturing company supplying to car navigation system manufacturers. The company was located in the coastal area but all production equipments were swayed by the tsunami. The top executive once gave up business continuity but transferred the facility to a warehouse which in 49km inland area and restarted its operation.



4. What are the author’s final thoughts?



Considering the geographical size and complexity of the disaster, the recovery pace is amazing in general. This seems to mostly attribute to “gembaryoku” (leadership and management capability of the local community and shop floor members), which is the strengths of Japan and its companies as often mentioned.



What is lacking yet critical to speed up the recovery in the slow recovery areas/items is strong leadership especially from the government. In contrast to “gembaryoku”, leadership and management capability of the people high up in the organization are often said as the weakness of Japan. Such weakness became prominent in the recovery from the disaster.



The last paragraph of the Nikkei article depicts this and the compelling message from the victims and the citizens. It is the fact that when Mr. Okada, Secretary General of the Democratic Party of Japan visited Sendai, a victim whose house is severely damaged with landslide said to Mr. Okada, “why don’t politicians really understand the reality of the devastated area and quickly take actions instead of fighting among politicians in the Diet”.





Resources:-

The recovery from the Japan disaster in the 3 months since March 11 is in general remarkable. This is mainly due to efforts by local people and companies. However, recovery of small and mid-sized companies and lives of victims remain slow. This is mainly due to insufficient financial support from the government. What is critical to boost recovery pace is strong leadership especially from the government.