Japan's Ripple Effect

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Commenter Wiredog asks a very good question:


How many automakers and others have JIT systems dependent on parts from Japan, especially the part that got hit? How soon will factories outside Japan start shutting down due to the loss of those parts? Or is there enough redundancy for this not to matter?
We often tend to think of just-in-time as a method of production that was waiting for the clever Japanese to think of it.  But in fact, just-in-time was also waiting for the speedy, reliable transportation links and the reliable infrastructure that made it possible.  99% of the time, it's a great system.  Now we see how resiliant it can be when the black swans appear.

Update:  A reader points me to this Reuters Factbox on Japan's effect on US businesses.  The auto industry looks to be affected, with supplies potentially disrupted for several months. Memory chip prices may rise as the quake seems to have damaged some production runs. And while the damage to foreign insurers seems to be limited, it turns out that none other than AIG's Chartis has 8% of the property and casualty business in Japan.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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