earthquakes and O rings

[David Farber <dave () farber net>]

Begin forwarded message:

From: Rod Van Meter <rdv () sfc wide ad jp>
Date: July 23, 2007 2:44:58 AM EDT
To: David Farber <dave () farber net>
Subject: earthquakes and O rings

Dave,

For IP, if you wish...

By now everyone has heard of the M6.8 earthquake up in Niigata last
week, a couple of hours north of Tokyo by shinkansen.  Ten people were
killed (all in their 70s and 80s, living in traditional-style houses
with heavy ceramic tile roofs that collapsed), 6,000 homes and buildings
destroyed, roads cracked and/or covered by landslides, a fault slip that
came to the surface and displaced a section tens of kilometers long by
something like a meter.  Net effect was (if I recall) to push one plate
16cm north.

The biggest newsmaker has been the effect on the Tokyo Electric Power
(TEPCO) nuclear plant, the largest in the world.  Leaks of radioactive
water, hundreds of barrels of radioactive waste tipped over (some broke
open and leaked), etc.  The most recent list of problems was 63 items
long.  Opposed to or in favor of nuclear power, TEPCO's slow response
and misinformation are creating a firestorm here.  The reactor itself
was designed to withstand only a 6.5; regulations were already under
revision to up that number, but weaker plants will be in use for
decades.

But you knew that, and I want to talk about piston rings, not nuclear
power.

One small company in Niigata, Riken (no relation to the research lab
with a similar English name, I'm sure) makes 60% of the piston O rings
used by *all* of the car manufacturers in Japan.  Their plant was badly
damaged.

Japan's auto makers, of course, are famed for their "just in time"
supply chain management.  I know people who have worked for
subcontractors, and the penalty for being late in supplying a critical
part can easily exceed $100,000 A DAY.

Toyota was forced to idle at least 27 plants, Daihatsu four, Honda and
other manufacturers several each.  Toyota is still shut down, as of this
writing (Monday, a week after the quake), and has an output loss of
46,000 cars or more.  I haven't seen a breakdown of the percentage
intended for domestic consumption versus export.

One interesting part of the response is that the auto manufacturers sent
teams of their idled workers to Niigata to help Riken clean up and get
back in production.  They were there helping by Thursday, despite the
transportation disruption, general shortages of goods including water,
food, and electricity, and risk of aftershocks.

One point and one question:

* A disaster it is, but a relatively local one, in a mid-level city
where events rarely make the world news.  And yet it will affect car
prices around the world, no doubt.  Just one more data point that the
world's economy is one large web.

* Toyota is a very well-run company, but they let this happen to them
with an important single-sourced part.  How good is YOUR disaster plan,
whether personal or corporate?  How good are your suppliers' disaster
plans, and their suppliers'?

                --Rod




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