Use the systems thinking approach to describe the strengths

Use the systems thinking approach to describe the strengths, the weaknesses, the opportunities, and the threats in the Japanese auto supply chain post-earthquake.

Solution

System Thinking Approach

The system thinking approach takes into account all the components that make a system. The components of the system are the responsible for either strengthening the system or in making the system weak.

Strength

The Japanese auto supply chain has been considered as very effective by manufacturers around the world. Japan has also been considered as one of the primary source for providing components of automobiles.

Many leading manufacturers like Toyota and Honda have their plants located in Japan. These companies employ the technique of Just-In-Time (JIT) that has been considered as very effective in reducing the inventory levels and thereby reducing cost to the company.

Weakness

Companies usually have in stock only that much which is required. After earthquake companies faced issue in meeting the demand as the production has halted due to damage to the plants and due to the usage of JIT, very low levels of inventory was maintained that was not sufficient to meet the required demand.

JIT also emphasizes use of only limited suppliers, preferably one. This increases economies of scale between the company and the supplier. Earthquake also affected this mechanism as many companies had only limited suppliers due to JIT and the companies were not able to get the components that were required to manufacture the products.

Thus, the once considered efficient system of supply chain was exposed to various risks and it became imperative for the Japanese companies to include the risks associated with earthquake into their system as well.

Opportunities

The Japanese companies have got the option of developing an alternate contingency plan wherein they would be able to shift production to some place in case of emergency or any type of contingency.

The companies can also look for other suppliers so that production in the company is not hampered due to the inability of the supplier to supply the components on time.

The threats from earthquakes and Tsunamis have provided an opportunity for the automobile sector in Japan to develop their system in a different way and to come up with a new plan.

Threats

Earthquake and Tsunamis are always a constant threat for the people and industries of Japan. There have regular occurrence of major earthquakes in Japan over the past century that have eventually resulted in generation of Tsunamis.

Thus, the automobile industry in Japan should always take this issue into consideration while planning for any kind of processes or while setting up a plant in Japan.