Risk Management

Our factories inundated at an industrial park
in Thailand

Major flooding occurred during the 2011 rainy season in Thailand, most severely along the Chao Phraya and Mekong river basins, affecting thousands of lives and causing severe economic damages.

The way we manage and maintain continuity of business during and after disasters is an all-important riskmanagement initiative.

Out of approximately 200 Panasonic manufacturing factories overseas, more than 20 are located in Thailand. We had a map of our manufacturing areas before the flooding occurred, but our risk assumptions only accounted for flooding of 1-3 meters, whereas the floods reached four meters-three of our factories were inundated. Our employees in Thailand worked quickly and tirelessly to minimize the impact these floods had on our business. In addition to rapidly assessing colleagues' safety, our employees swiftly set up a temporary management headquarters outside the flood zone to manage recovery efforts. We put forth our best efforts toward the recovery and re-production efforts, including evaluating alternate production options, requiring dispatched engineers to provide support, and recovering inundated moldings and equipment. Despite these efforts, we regrettably caused difficulties especially for our B2B customers as we were not able to completely eliminate the delivery challenges that were caused by the floods.

This experience emphasized the importance of reviewing our risk assumptions worldwide and increasing them wherever needed, including throughout our supply chain. We are currently reviewing the global hazard information of natural disasters.

Our experiences with the Thai flooding as well as the Great East Japan Earthquake have also led us to review our business continuity management (BCM). At the beginning of 2012, we issued a new BCM guideline-a guideline supported by our business continuity management system-that emphasizes reducing risks from various hazards including floods and preparing for them in a way that minimizes our damages.