Japan Firms and Supply Chains: Update June 10, 2026.

Nearly half of Japanese firms lack supply-chain resilience measures

Ideas:

What it always comes down to, in many situations related to change or the future is companies having the needed resources to make the changes and the time to make the changes. And at the same time, in some companies, there is the resistance of some, usually the old-guard in a company, that doesn't want to see changes as prefer things as they are.

Supply chain protections should be a given for any company but again money and time are the main variables that limit companies from implementing the changes. They know they need to protect their supply chains but most are just hoping that nothing will happen to their supply chains in the future.

The fact that only 25.9 percent of companies have made the needed changes is about right with either companies or individuals doing what is needed, as always, for any situation as it more common to just put it off or do it at a later date.

Companies and humans tend to just put things off until its finally needed or necessary or because of an emergency or critical situation has occurred that has forced someone or some company to take action.

In the case of some food companies taking steps to change their packaging, it might have been seen as possible health issues that would have affected their food products so they needed to make the changes quickly to protect their products and their bottom line.

You would think, with a country prone to potentially many natural disasters, that companies would have plans in place to prevent supply chain disruptions, but again time and money might be the main variables preventing such actions.

While Japan's economy is a very staple economy, it is prone to potential disruptions, and for the most part, its a very mature economy that doesn't grow that much or that fast, and can't afford anything that might keep it from operating correctly, such as production stoppages, supply chain blockages or stops and or even less consumer spending related to many things.

It's not surprising that 56.3 percent of smaller firms have not taken any steps to protect their supply chains or maybe even diversify their supply chains as again it takes time and money and it takes connections, globally, to find new or better supply chain connections and some small companies or many in Japan just don't have the resources needed to accomplish all of that.

And as expected, 26.8 and 49.6 percent of large and midsize companies, respectively, have not taken any action, which shows again, that larger companies might have more resources needed to diversify their supply chains and of course some midsize firms have but 49.6 have not taken any action yet.

Again, it's not a surprise, but it seems the article is just repeating itself and its known that large companies have more resources have of course more have taken the needed steps to diversify their supply chains while smaller companies in Japan just don't have the resources or even the time to do what is needed.

All these are good and needed such as "diversifying suppliers," "risk communication with suppliers," and "cooperation among companies and mutual support"are actions that all companies should be engaged in but again it takes time and money for all of these actions and in a super-stressed out global world that is constantly time constrained no company has the time to try and do all three of these important critical actions.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20260601/p2g/00m/0bu/004000c

Japan Wage talks: Updated Jan. 27, 2025.

 

Japan annual wage talks begin amid high hopes for sustained pay hikes

Article source: https://mainichi.jp/english/articles/20250122/p2g/00m/0bu/029000c

Ideas:

Japan wages, unfortunately, are much less than other OECD countries, so there is a definite need for Japanese companies to increase the wages, despite increasing wages the past two years.

While large Japanese companies will most likely increase wages of 5 percent of more, the challenge is going to be small and midsize companies who probably don't have the profit margins or the resources needed to increase wages.

The Japanese government needs to find a way to help small and midsize companies increase wages, as again, small and midsize companies just don't have the resources to increase the wages.

A wage increase of 6 percent sounds good but will Japanese companies agree to increase wages that much and will there profit margins allow that much increase and most important will stockholders agree to a wage increase of that much if they are publicly traded company.

If large Japanese companies agree to a 6 percent increase can small Japanese companies be able to match what large companies do, when they haven't been able to match large company wages the past two years.

Yes, in a market economy private firms drive economic growth, but sometimes they need a little help or push from the government to get them there, for example small Japanese companies might need a little help.

What the head of Rengo said was correct but unfortunately wage increases in Osaka, Nagoya, and Tokyo might be doable but can small and mid sized companies in the regional economies in Japan be able to match what the large companies in the metro areas do.

If the Bank of Japan does increase the key rate, will it be enough to prevent prices from rising sharply.

The idea is as the key rate increases it will discourage some businesses or households from borrowing and or reduce spending enough to prevent price increases as demand will decrease just enough that keep prices low.

As large companies have increased wages the past two years will they have the appetite to increase wages for a third year. And will they increase wages above the 5.58 rate of last year.

And yes, small firms have not been able to pass-on their higher cost to consumers and probably the main reason might be that many small and midsize firms are suppliers of large companies who might not want to have their supply costs increased which might be a limiting factor for many small companies in Japan.

While large companies might be able to absorb a loss of customers due to price increases, small companies might not be able to absorb the loss of customers.

Have a nice day!