The Impact of Earthquake Disasters on Milk Supply Chain and Review of Existing Measures

A Case Study of the 2018 Hokkaido Eastern Iburi Earthquake

Abstract

An increasing number of studies have pointed out that the perspective of a supply chain rather than an individual industry is important for disaster management in the dairy industry. This study aims to evaluate existing disaster measures by analyzing the impacts of the 2008 Hokkaido Eastern Iburi Earthquake on a milk supply chain. The analysis primarily addresses the stages from dairy farming to milk processing, focusing on the redundancy and flexibility of the supply chain. The widespread electricity outage caused by the earthquake brought most dairy plants to a halt and a large amount of raw milk was discarded. However, milk production quickly recovered as many dairy farmers were able to use their own power generators. Compared to raw milk production, dairy corporations took a longer time to recover due to the disposal of products and raw milk as well as restrictions on capacity for raw milk transportation. The supply chain measures after the earthquake were based on the policy of minimizing milk wastage by continuously shipping raw milk to dairy plants with power generation facilities, even during power outages. This policy framework is similar to supply and demand adjustment in normal times and presupposes that milk corporations pay more adjustment costs than producers. However, depending on the scale of the disaster, this approach may not be effective and could have a prolonged impact on the supply chain. To increase supply chain resilience, it is necessary to discuss how to share costs among chain actors.