Empirical Analysis of Supply Chain Risk Management in the Japanese Automotive Industry

Abstract

In recent years, the risk of supply chain disruption has increased as the result of frequently occurring natural disasters, market diversification and the globalization of competition. Therefore, it is essential to develop some methods for supply chain risk management (SCRM). Especially, it is widely known that the supply chains of the Japanese automotive industry were severely damaged at the time of the Great East Japan Earthquake. The purpose of this paper is to perform an empirical analysis based on a survey of the current status and challenges of SCRM in the Japanese automotive industry. The analysis consisted of conducting a survey with 47 manufacturing plants in the Japanese automotive industry, which was carried out from February to June 2014. The data are divided into three categories: vulnerability of supply chain, efforts toward reducing the supply chain risk, and probability and impact of the risk. In order to verify the factors potentially involved in the data obtained, we applied factor analysis with Promax rotation. According to the results of the factor analysis, five factors whose eigenvalues are more than one were extracted. In order to examine the relationship among the factors extracted, the correlation coefficients were calculated. The results show that there are weak relations between geopolitical risk and technological risk, and information risk and disruption risk. In addition, comparative analyses from the viewpoint of the position along the supply chain were carried out, which clarified that there are some differences in the supply chain risk in terms of the raw materials manufacturers, intermediate goods and semi-finished products manufacturers, and the finished products manufacturers.