Building Resilient Supply Chains against Natural Disasters: The Cases of Japan and Thailand

Abstract

Emerging global supply chains not only increased efficiency in production and delivery but also natural-disaster risks. Based on two recent major natural disasters in Japan and Thailand, this article discusses the increasing natural disaster risks due to the development of global supply chains and identifies the impact of natural disasters on global supply chains. The results indicate that the risk of natural disasters is not confined by geographical boundaries, as negative effects can spill over globally throughout the supply chains and affect all the entities involved including firms, governments, financial institutions and end consumers. The article argues that enhancing disaster resilience becomes increasingly important in this context for maintaining the competitiveness of firms and the health and strength of the whole economy. Both firms and governments need to take disaster risks into consideration in supply-chain management to avoid supply-chain disruptions and subsequent negative effects. The article proposes some strategies to build resilient supply chains against natural disasters, emphasizing collaboration between the public and private sectors.