While major businesses are prepared to keep their head offices running if a huge earthquake strikes Tokyo, smaller businesses are lagging with their contingency plans, posing a threat to the supply chains of the big manufacturers.
The Central Disaster Management Council says there is a 70 percent chance of an earthquake with a magnitude of around 7 striking the Tokyo metropolitan area over the next 30 years. But a team from the University of Tokyo said last year that the probability is 70 percent by 2016, and 98 percent within 30 years.
Major companies have equipped their head offices and plants with emergency power generators, but there are limitations to fuel stockpiling.
The head office of Honda Motor Co. in the Minamiaoyama district can withstand quakes of upper 6 on the Japanese seismic intensity scale of 7, but its emergency power will only last 48 hours. In the case of a prolonged blackout after a quake, Honda plans to relocate its head office to Wako in Saitama Prefecture.
At Nippon Steel & Sumitomo Metal Corp., the Osaka branch office will take over as the sales department of the head office in the Marunouchi district if it takes damage. The administrative department will be transferred to a place near the metropolitan area.
Plant engineer IHI Corp. will relocate its head office to a plant in the town of Mizuho, western Tokyo, if the head office in the Toyosu district is damaged.
Companies also need to help people who are unable to get home if a megaquake shuts down public transportation.
Sony Corp. has stockpiled three days’ worth of food for employees at its major footholds across the country.
At its head office in Yokohama, Nissan Motor Co. is ready to accept 1,500 people who need shelter. Many Nissan dealerships along the main roads have agreements with local governments on accommodating people as well.
After a massive earthquake, many people will be unable to go to work.
Giving priority to the safety of its employees and their families, Hitachi Ltd. has equipped sales representatives with computers for emergency use so they can work from home.
Machinery manufacturer Komatsu Ltd. has installed wide-area wireless communication equipment at its executives’ homes to allow them to stay in contact with the head and branch offices.
Honda has created a system that enables finance officers to handle fund transactions at home. It is designed to prevent delays in financial settlements from plunging small suppliers into difficulty or affecting payments overseas.
“It is important to minimize the adverse effects on unaffected areas and abroad,” a Honda official said.
For major manufacturers, including automakers, it will be vital to keep their parts supply chains working to restart production as soon as possible after a big quake.
About 30,000 to 40,000 parts are used in a single vehicle. In the aftermath of the Great East Japan Earthquake in 2011, disruptions at a just a handful of parts producers disrupted vehicle production throughout Japan and abroad.