Deforestation, Thailand Floods and Supply Chain

You think deforestation has something to do with “Thailand worst” floods? Because rainforests affect local weather conditions by creating rainfall.

Between 1945 and 1975 forest cover in Thailand declined from 61% to 34% of the country’s land area. Over the next 11 years, Thailand lost close to 28% of all of its remaining forests. This means that the country lost 3.1% of its forest cover each year over that period.

What happened now is Thailand going through the worst floods in half a century. The floods have disrupted the supply chain of some of the big names, i.e. Toyota, Apple, Ford, etc. For example, Toyota, Honda and Nissan – combined – they’re losing 6,000 units of car production daily since early this month.

Thailand is a big regional hub for the world’s car makers and most are suffering disruption, either because their plants are flooded or, more often, because parts makers have had to close and the supply chain has been disrupted.

The output of Japanese car makers has fallen by about 6,000 units a day because of the flooding. Germany’s Daimler AG said late on Thursday it had halted car production because of the threat of flooding. (emphasis added)

via Reuters

Moreover, Bloomberg reports that “Thailand is the world’s largest producer of hard-disk drives, the biggest exporter of rice and rubber and the second- largest supplier of sugar, according to government data.” So if you total domestic productivity, exports and its global impact down the supply chain – the impact from the floods could be huge. Really huge!

I remember when we were still a kid in Jakarta. Our house got flooded few times. When the city gets flooded, it is like snow days for us. It’s fun when it’s not too much and go on for days. Because we can play around in the thick of water! But things can get messy and people got sick after a few days of continuous rain. So enuf of it.

This flood should be a wake up call for everyone.  There is a price to everything (in life and business). That when you disrupt nature’s natural cycle of cooling system this is what could happen.

Sure by now the Japanese conglomerates may already have learned the lessons from this experience. That there’s correlation between deforestation, climate and rain fall. They do learn pretty quick. It’s about risk management and Kaizen!

The chain is disrupted (in pictures)

Pictures worth a thousands words. My friend sent me pictures of Rojana industrial park, where Toyota and other manufacturers have their plants under water siege – that you can see below the fold..

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Author: Dewita

Co-founder Ecotwist Labs.

1 thought on “Deforestation, Thailand Floods and Supply Chain”

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