The catastrophe which befell Japan on March 11 is shocking. One of the most significant events of our lifetimes.  A massive human tragedy.  In one sense, it doesn’t matter that Japan is the third largest economy in the world. However, there are some business supply chain effects. Many Japanese manufacturers are multi-national brands e.g. Sony, Canon, Toshiba, Toyota and Nippon Steel. Market leaders and/or benchmarks in innovation and efficiency. Japanese systems have been copied worldwide – e.g. Just In Time and Lean Production. Specialised components are shipped from Japan all over the world. Distribution to UK factories (e.g. Nissan in Sunderland) takes 28 days by sea. The system is so efficient, it could mean a slow down in production in the UK factory because the Japanese factory isn’t working.  In the USA, a GM truck plant has already closed temporarily and the production of I-Phones and I-Pads will probably be affected too.  For more information, click  here.  Do you think there will be an effect on marketing also?

I have “acquired” this article from the Higher Administration blog. Read it from a Business Management perspective and watch the video from BBC News Scotland here. Order picking basically means collecting items from the individual storage locations and putting them together to complete the order package.

One reason given for shortages is that many firms now rely on “Just In Time” delivery, including the big supermarkets who now have sophisticated ICT  based stock control  systems. This is a term originally associated with factory production lines where parts e.g. car exhausts are delivered just in time for fitting into the new vehicles. The main aim of J.I.T. is to have minimum, ideally zero stocks. Thus saving the associated costs. There is a brief summary of J.I.T. and its advantages and disadvantages on tutor2u, click here.

The snow calamity is highlighting lots of issues relevant to this course. Infrastructure mainly refers to the motorways & roads network and we are now very aware of the chaos caused when we (and delivery vehicles) cannot travel around. A few days into the crisis, we are now hearing of shortages of food and fuel in some areas. Apparently, most of our bread is baked in Glasgow but the local supermarket shelves are empty. Few vans on the road and no doubt, some panic buying. Reporting Scotland reported tonight that some farmers have had to dump milk. Not all though!

Scotland’s refinery for fuel is at Grangemouth. It is working normally but again, due to the travel problems, many tankers are not making collections and deliveries. Hence diesel/petrol shortages at some local service stations.

For general information on the situation this evening as per the BBC click here. For delayed food supplies to the Highlands, click here .

In 2007, the NHS opened a new warehouse facility at Larkhall to centralise the procurement and storage of equipment and consumables used in hospital wards throughout Scotland. Basically everything except pharmaceuticals. Orders are placed by hospital staff using a barcode system. In addition to centralised stockholding advantages, this strategic change is bringing purchasing benefits through economies of scale and more e-procurement. It should save the NHS millions of pounds. For more information about the warehouse click here.