Lessons Learned from the Great East Japan Earthquake and Thai FloodingDealing with the repercussions of the Great East JapanEarthquake and flooding in Thailand in fiscal 2011, althoughwe managed to avoid significant shortfalls in our product supplyto customers, these emergencies revealed that our riskmanagement initiatives with regard to parts and material procurementmust be greatly reinforced. In particular, supplysources for input materials were found to be available fromonly a limited number of companies. Also, the Thai floodingshowed us that a natural disaster that strikes a single countrymay trigger global supply chain problems. To address theseissues, we began collecting information on our global supplychain, confirming the interchangeability between parts andmaterials and developing an integrated database.Ultimately, we aim to establish a structure that ensuresthe prompt recovery of production capacity?no matter whatthe problem and no matter where in the world it occurs?byemploying the resources retained by the Akebono Group membersworldwide. We intend to use the collected supply chaindata not only for risk management but also to improve selectionand procurement process of parts and materials interms of global cost optimization. Specifically, in pursuit of“Commonization and Standardization” (C&S) and “design manufacturability,”we will closely cooperate with suppliers and theEngineering Department to eliminate factors?such as complicateddesigns or materials?that hinder interchangeability.We will also accelerate our efforts to standardize as well aslocalize parts and materials for global platform (GPF) businesswith the main focus put on cost competitiveness and riskreduction.Addressing Management Issues Needing BCP CoverageWe recognize the maintenance and reinforcement of ourBusiness Continuation Plans (BCPs) to be a crucial managementissue. Carrying on with efforts made since the GreatEast Japan Earthquake, we began drawing up action plans tofurther strengthen our disaster response capabilities. Theseplans address the risk of supply chain disruption, a growingcause of concern among our customers, and envisage suchevents as large-scale natural disasters and pandemics.Taking into account the guidelines issued by Japan’sCabinet Office and Japan Auto Parts Industries Association(JAPIA), we will step up our efforts to enhance our BCPs forlocations worldwide while encouraging our suppliers to formulatesuch plans.Issues InitiativesReview of crisismanagementstructure? Conduct drills focused on early response and recovery? Review crisis management structure and disaster response manuals,expanding their scope to cover such events as weather andtraffic accidents that may impact safety and product delivery. Otherissues for discussion include rules for the setup and managementof response headquarters, the means of ensuring greater informationvisibility, and equipment needed for disaster responseClarify roles andresponsibilities? Review the scale of response headquarters as well as emergencyresponse measures? Clarify matters to be confirmed at times of emergency (the safety ofassociates, the status of shipments, etc.) as well as persons inchargeVisualize workingconditions ofassociates? Track the attendance and absence of each associate? Establish a real-time update and share systemFukushima Manufacturing: Creating a Safe and Comfortable WorkplaceAfter the Great East Japan Earthquake struck on March 11,2011, Akebono Brake Fukushima Manufacturing Co., Ltd.(Fukushima Manufacturing) was forced to suspend productiondue to damage suffered by its plant buildings. Nevertheless,the company was able to resume operations after only a week.Since then, Fukushima Manufacturing has reinforced damagedbuildings and facilities, working to make sure that theycould endure a similar disaster should it occur at some futuredate. At the same time, associates’ emergency contact listswere updated, incorporating maps of their residences to facilitateprompt confirmation of the safety of both them and theirfamilies.In addition, on October 15, 2012, Fukushima Manufacturingconducted a disaster drill from 07:10 p.m. with a focus onbeing prepared for an emergency situation where there is nolighting available.Reinforcement Work and Other Disaster Countermeasures Implemented at Fukushima ManufacturingDamage Countermeasures DetailsCollapse of walls Repair of walls and reinstallation of braces Braces with improved strength were installed in the walls to withstand seismic vibrationsDisplacement of equipmentReinforcement of anchor bolts for all plantequipmentAll plant equipment was secured using anchor bolts to prevent them from fallingFall of moldsInstallation of improved fall prevention devicesat mold storageImproved devices installed in roller shelves to prevent metallic molds from fallingBreakage of sewagetreatment tankReinforcement of the structure surroundingsewage treatment tankConstructed steel-reinforced concrete walls around an underground sewage treatmenttankAbsence of food anddrinking water stocksStock food and drinking water Stocked three days’ worth of food and drinking waterIssues InitiativesPromptcommunication? Collect information on the status of customers, etc., to forecastorder trends in the medium and long terms? Collect information from external information sources? Ensure controlled sharing of information, appointing a person incharge to facilitate communication among basesReview ofpurchasing? Collect information on the supply chain on a global basis, confirm the interchangeabilityof parts and materials and develop an integrated database? Enhance C&S and design manufacturability to eliminate factors thathinder parts interchangeability? Drive C&S and localization activities for GPF operationsReform of productionsystems? Reorganize global production systems (avoid overconcentration)? Promote C&S+t* initiatives (enhance compatibility of production facilities)Facility checkupsand reinforcement? Continued implementation of anti-seismic reinforcement work? Establish a back-up functions for the response headquarters atAi-Village (see page 27)? Install emergency power supply systems at each site? Update satellite phones*“C&S plus topping (t).” See pages 4-9.Management Issues Identified in the Wake of the EarthquakeTwo Years of Reconstruction EffortsTaking lessons from its experience of natural disasters, Akebono is reinforcingits manufacturing structure while deepening ties with local communities.Special Feature: Developments since the Great East Japan Earthquake