Allocation of Responsive Capacity in Managing Supply Chain Disruptions

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In recent years, major natural disasters of 2011 Japan Earthquake, tsunami in south Asia (2004), coupled with recent trends of global supply chains and lean manufacturing systems showed that supply chains are exposed to a greater number of risks resulting in material flow disruptions and potential loss. These recent major events highlighted that global supply chains are less reliable than they appear. Supply chain designs that do not consider the impact of disruptions lack the measures to accommodate these events. After the 2011 Japan Earthquake, Toyota reported that the quake still affected the output after six months; as a result, the company has targeted to design a robust supply chain that would recover within two weeks in the event of another major earthquake.