LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

A Brief look at the Logistical challenges and peculiar Logistical techniques unique to Japan

Professor Concerned: Dr. Prof. J.S. Lamba

Subject: Logistics and Supply Chain Management

Group 10

Group Members:Dhruv Maheshwari (20)Divya Nagar (34)Hitesh Varshney (26)Siddharth Singhvi (53)

1 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI

LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

INTRODUCTION

Often referred to as the land of the rising sun, Japan is a perfect example of where history meets technology. The third largest economy in the world, Japan has transformed as the epicenter of reliable and outstanding technology in the second half of the 20th Century. Sprawling cities and heavily wooded countrysides are a feature of the four islands that make up this country’s landmass.

Modern architecture and traditional wooden houses transfers one from the present to the yester years. Japan has also been credited with the highest degree of loyalty with examples of employees working their whole lives for one company itself. This goes to show the very strong principles and social code to which Japanese people adhere to. Even though Japan remains a traditional society with very strong societal and employment hierarchies; but such traditions are facing the heat as the younger generations are becoming more inclined towards the Western culture and ideas.

Post the Second World War Japan’s economy was propelled by their excellence and prowess in automobile and consumer electronics sector. Most Japanese multinationals are domestic names today. However, this economic bull run lost steam in the 1990s with growing debt burdens on the country which successive governments have not been able to address.

Another major demographic issue that the country faces is that like their neighbors China, it too has an ageing population and social security costs are mounting. Moreover, politically there are still tensions prevalent between Japan and its neighbors China and South Korea, who have not yet gotten over the atrocities that Japanese military inflicted on its prisoners of war.

Geographically, the country is sitting on a figurative time bomb. Set right over the meeting point of three tectonic plates, the country is ravaged by regular earthquakes and seismic activities. This is also evident through the light-weight architecture that Japan is famous for. Over twenty percent of the world’s earthquakes take place in Japan. Schools and offices regularly undergo fire and disaster management drills with the threat of a disaster always there over their heads.

The March 2011 earthquake unleashed a devastating tsunami and Japan is still coming to terms with its impact – not least the question of restarting its nuclear energy programme after the closure of the crippled Fukushima plant.

2 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI

LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

COUNTRY ANALYSIS

Economic Profile

Economic StructureJapan has a population of 127.25 million in 2013, with a labor force of 65.02 million. Japan’s unemployment rate for 2012 was 3.3 percent. One of the biggest challenges for the Japanese government is its negative population growth rate. At about 24.8 percent Japan has the highest proportion of population over the age of 60 years in the world. Much of this problem is due to their low birth rate and very high life expectancy.

The country has a land area of 364,485 square kilometers. 70 percent of Japanese land is forested and unsuitable for agricultural, industrial or residential purposes. As such, much of Japan’s economic activity is concentrated in major cities such as Tokyo, Yokohama and Osaka.

With only about 15 percent of its land arable, Japan imports about 60 percent of grain and fodder crops from other countries, and

relies on imports for most of its meat products. Japan is also the largest market for EU and third largest market for US agricultural exports.

With its lack of natural resources, Japan relies on the imports of commodities such as fuel, foodstuff, chemicals, textiles and raw materials from various countries for its industrial sectors. Japan is the world’s third largest oil importer, with 5.033 million barrels per day to meet 45 percent of its energy needs in 2009. Japan boasts the largest fishing fleets In the world, accounting for almost 15 percent of the global catch.

Industry SectorsDespite an overall stagnation of the economy for nearly two decades, Japan’s industries are still among the most highly advanced and innovative In the world. Japanese manufacturing products, particularly in electronics and automobiles, are the world leaders in both production and technological advancements in their respective fields.

In 2012, industry was responsible for 27.5 percent of Japan’s GDP. Major industries in Japan include motor vehicles; electronic equipment, machine tools, steel and non-ferrous metals, ships, chemicals, textiles, and processed foods.

3 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI

LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

Japan’s automobile industry produces the second largest amount of vehicles in the world behind China. However, Japanese automobile companies remain among the most valuable and technologically advanced in the world. Japan is home to six of the top twenty largest manufacturers in the world – Toyota (1st), Renault-Nissan (4th), Honda (8th), Suzuki (10th), Mazda (14th) and Mitsubishi (16th). The automobile industry also managed to register a massive 10.5 percent growth in 2009, in spite of the global financial crisis.

Japan is also the world’s largest electronics manufacturer with prominent companies such as Sony, Casio, Mitsubishi Electric, Panasonic, Canon,, Fujitsu, Nikon, Yamaha, etc. Japanese electronic products are renowned for their innovation and quality. However the turmoil from the 2011 earthquake disaster greatly affected its industries, dropping Japan from the 8th highest industrial production growth rate in 2010 to the 8th worst in 2011.

Main Indicators

2011 2012 2013 2014 2015 (e)

GDP (billions USD)

5,905.63 5,937.86 4,898.53e 4,769.80e 4,881.91

GDP (Constant Prices, Annual %

Change)

-0.5 1.5 1.5e 0.9e 0.8

GDP per Capita (USD)

46,175 46,531 38e 37,540e 38,522

General Government

Balance (in % of GDP)

-8.3 -7.6e -7.6e -6.7e -5.5

General Government

Gross Debt(in % of GDP)

229.8 237.3e 243.2e 245.1e 245.5

Inflation Rate (%)

-0.3 -0.0 0.4e 2.7e 2.0

Unemployment Rate (% of the

Labor Force)

4.6 4.3 4.0 3.7 3.8

Current Account (billions

USD)

126.47 58.68 33.63e 45.42e 54.92

Current Account (in % of

GDP)

2.1 1.0 0.7e 1.0e 1.1

Source: IMF - World Economic Outlook Database - Last Available Data.

Note: (e) Estimated Data

Despite the historical significance of Japanese manufacturing, services are the dominant component of the economy – contributing to71.4 percent of the GDP in 2012. Major services in Japn include banking, insurance, retailing, transportation and telecommunications.

4 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI

LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

The Tokyo Stock Exchange is the third lasrgest stock exchange In the world by market capitalization –

with a total market cap of U.S$3.3 trillion as of December 2011. Japan is also home to 326 companies

from the Forbes Global 2000.

Agriculture’s contribution to Japan’s economy is fairly small when compared to Industry and Services. In

2012, Agriculture made up only 1.2 percent of the nation’s GDP. Although its contribution appears

minute, agriculture is still a highly important component of Japan’s economy and society.

Japan’s agricultural economy is highly subsidised and protected. Only 15 percent of Japanese land is

suitable for agriculture, though any available land is highly cultivated. As such, Japan has one of the

highest per hectare crops yields in the world. Though it has a small agriculture sector, Japan is self-

sufficient in the production of rice and fish, but relies heavily on food imports such as wheat, corn,

sorghum and soybeans from the US. This makes US the third largest market for Japan's agricultural

imports.

Japan’s Export, Import and Trade

Japan is the 5th largest importer and exporter in the world. Japan imports raw materials and pays for

them by processing the raw materials, thus adding value to them before exporting the output. In recent

years, Japan has been the top export market for 15 trading nations worldwide.

In order to greater facilitate bilateral trade, Japan adopts Economic Partnership Agreements (EPAs)

According to former Japanese Prime Minister Taro Aso, countries move on to discuss higher-level issues

in EPAs, such as "devising framework through which investment can take place in a secure manner, or

developing a mechanism to ensure protection of intellectual property rights". The list of Japanese EPAs

include those with ASEAN, Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam,

Australia, Chile, India, Mexico, Peru, Korea and Switzerland. ASEAN-Japan Comprehensive Economic

despite Japan’s extensive list of EPA partners, China remains as Japan’s largest export and import

partner. In 2012, 19.7 percent of Japan’s exports went to Japan while 21.5 percent of Japanese imports

came from China.

5 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI

LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

Political Profile

At the end of World War II, Japan was required by the terms of its surrender to build a new political

system. With Allied forces occupying and helping to rebuild the country, Japan adopted a democratic

government for the first time in 1947. The nation is now governed by the two houses of parliament,

known as the Diet, with a prime minister elected by the majority party. The two houses of the Diet are

the House of Councillors, or Sangi-in, which has 242 members; and the House of Representatives, or

Shugi-in, with 480 members. In the past, Japanese voters cast their ballots for specific candidates, but

since 1982 voters select a party, which then receives proportional representation in the legislature.

Japan's main political parties

are the Liberal Democratic

Party (LDP) and the Democratic

Party of Japan (DPJ). Several

smaller parties also maintain a

presence in the legislature. The

LDP, generally considered the

more conservative of the two

major parties, held power from

1955 until 1993. Since 1994,

the LDP has governed by

forming a coalition

government.

Some facts…

Type of State

Empire having a parliamentary democracy.

Executive Power

The head of state is the Emperor. His role is largely ceremonial. The leader of the majority party or leader of the majority coalition in the parliament (House of Representatives) is designated as the Prime Minister for a four-year term. The Prime Minister is the head of the government and enjoys the real executive powers which include implementation of the law in the country and running the day-to-day affairs. The Cabinet is appointed by the Prime Minister.

Legislative Power

The legislature in Japan is bicameral. The parliament called National Diet consists of:House of Councilors (the upper house) having 242 members elected through a popular vote for six year terms; and House of Representatives (the lower house) having 480 members elected through a popular vote for four-year terms. The Constitution of Japan states that the nation's "highest

6 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI

Prime Minister Shinzo Abe

LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

organ of state power" is the National Diet. The executive branch of government is directly or indirectly dependent on the support of the National Diet, often expressed through a vote of confidence.

Main Political Parties

- The Liberal Democratic Party of Japan (LDP): centre-right, heads the ruling coalition- Democratic Party of Japan (DPJ): centrist, major opposition party- Japan Restoration Party (JRP): right-wing, third largest force, but is slowly losing representation- Komeito (NK): centre-right, in coalition with the LDP - Japanese Communist Party (JCP): left-wing, more than doubled its representation in the last election

Current Political Leaders

Emperor: AKIHITO (since 7 January 1989) – hereditaryPrime Minister: Shinzō Abe (Liberal Democratic Party), since 26 December 2012.

Next Election Dates

House of Councilors: July 2016

Geographic and Topographic Profile

General Overview

Japan is an island nation in East Asia comprising a stratovolcanic archipelago extending along the Pacific coast of Asia. It lies between 24° to 46° north latitude and from 123° to 146° east longitude. The country is southeast of the Russian Far East, separated by the Sea of Okhotsk; slightly east of Korea, separated by the Sea of Japan; and east-northeast of China and Taiwan, separated by the East China Sea. The closest neighboring country to Japan is the Russian Federation.[1]

The major islands, sometimes called the "Home Islands", are (from north to south) Hokkaidō, Honshū (the "mainland"), Shikoku and Kyūshū. There are also 2,456 islands,[2] including Okinawa, and islets, some inhabited and others uninhabited. In total, as of 2006, Japan's territory is 377,923.1 km2 (145,916.9 sq mi), of which 374,834 km2 (144,724 sq mi) is land and 3,091 km2 (1,193 sq mi) water. This makes Japan's total area slightly smaller than the U.S. state of Montana, and slightly larger than Norway.

Some facts…

Location: Eastern Asia, island chain between the North Pacific Ocean and the Sea of Japan, east of the Korean Peninsula.

Area:

total: 377,915 km² land: 364,485 km² water: 13,430 km²

7 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI

LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

notes: Includes the Bonin Islands, Daitō Islands, Minami-Tori-shima, Okinotorishima, the Ryukyu Islands, and the Volcano Islands. Ownership of theSenkaku Islands and Liancourt Rocks (Japanese:Takeshima, Korean:Dokdo) is in dispute.

Area comparative: 11% smaller than California; slightly larger than Newfoundland and Labrador

Land boundaries: none

Coastline: 29,751 km (18,486 mi)

Maritime claims:

exclusive economic zone: 200 nmi (370.4 km; 230.2 mi) territorial sea: 12 nmi (22.2 km; 13.8 mi); between 3 and 12 nmi (5.6 and 22.2 km; 3.5 and 13.8 mi)

in the international straits—La Pérouse (or Sōya Strait), Tsugaru Strait, Osumi, and Eastern and Western Channels of the Korea or Tsushima Strait.

Climate: varies from tropical in south to cool temperate in north

Terrain: mostly rugged and mountainous, can easily be compared to Norway, both having about 70% of their land in the mountains.

Natural resources: small deposits of coal, oil, iron, and minerals. Major fishing industry.

Land use:

arable land: 11.26% permanent crops: 0.81% other: 87.93% (2011)

Irrigated land: 25,000 km² (2010)

Total renewable water resources: 430 km3 (2011)

Natural Hazards

Ten percent of the world's active volcanoes—forty in the early 1990s (another 148 were dormant)—are found in Japan, which lies in a zone of extreme crustal instability. As many as 1,500 earthquakes are recorded yearly, and magnitudes of 4 to 7 in magnitude are common. Minor tremors occur almost daily in one part of the country or another, causing slight shaking of buildings. Major earthquakes occur infrequently; the most famous in the twentieth century was the great Kantō earthquake of 1923, in which 130,000 people died. Undersea earthquakes also expose the Japanese coastline to danger from tsunamis (津波?) and tidal waves. On March 11, 2011 the country was subject to a devastating magnitude 9.0 earthquake and a massive tsunami as a result. The March 11 quake was the largest ever recorded in Japan and is the world's fourth largest earthquake to strike since 1900, according to the U.S. Geological Service. It struck offshore about 371 kilometers (231 mi) northeast of Tokyo and 130 kilometers (81 mi) east of the city of Sendai, and created a massive tsunami that devastated Japan's northeastern coastal areas. At least 100 aftershocks registering a 6.0 magnitude or higher have followed the main temblor. At least 15,000 people died as a result.

Japan has become a world leader in research on causes and prediction of earthquakes. The development of advanced technology has permitted the construction of skyscrapers even in earthquake-

8 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI

LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

prone areas. Extensive civil defense efforts focus on training in protection against earthquakes, in particular against accompanying fire, which represents the greatest danger.

Another common hazard are several typhoons that reach Japan from the Pacific every year and heavy snowfall during winter in the snow country regions, causing landslides, flooding, and avalanches.

The 2011 earthquake and tsunami that hit Japan; successively leading to the Fukushima nuclear plant disaster

9 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI

LOGISTICS AND SUPPLY CHAIN MANAGEMENTGROUP 10

Bibliography

- http://www.indexmundi.com/japan/#Transportation - http://www.economywatch.com/world_economy/japan/?page=full - http://www.pbs.org/pov/campaign/campaign_background.php - http://www.suddefrance-developpement.com/en/country-profiles/japan/political-outline.html - http://en.wikipedia.org/wiki/Geography_of_Japan -

10 DHRUV MAHESHWARI | DIVYA NAGAR | HITESH VARSHNEY | SIDDHARTH SINGHVI