Activities of JAPIA
No. 16
RS (Resilience) Sub-Committee
Reported by RS Sub-Committee
Specialized Sub-Committee to prepare for various risks, including contingencies
Aimed at becoming the person Desk or Hotline for member companies, supports themitigation of supply chain risks
The spread of COVID-19 four years ago had a major impact on economic activity, andsince then, conflicts and divisions between countries show no sign of abating. Production
cuts in new vehicles due to a shortage of semiconductors have also caused confusion. Inorder to strengthen supply chains (procurement networks) against such risks, JAPIA
launched 'Resilience Strengthening Working Group (WG)' in 2022. From this year, the WG
has been upgraded to an 'RS Sub-Committee', aiming to become an 'antenna function' forrisk information and a 'Consultation Desk' in the event of an emergency. In FY2023, while
the three support tools took shape as manuals that contribute to resilience, we are awarethat there are still challenges in their penetration. In FY2024, we will promote activities with
an awareness of these issues and work to strengthen cooperation between internal andexternal related parties.
Organize and categorize a wide variety of risks and consider taking actions
In February 2022, when supply chain risks were discussed, JAPIA conducted a survey of
47 board member companies asking about possible risks. As a result, concerns werevoiced about geopolitical risks, such as nationalism and conflicts around the world, as wellas economic security. While these issues have a significant impact on business, it isdifficult for individual companies to prepare comprehensively for a wide range of cases.
JAPIA therefore established the 'Resilience Enhancement WG' In August,. Nine
members from seven companies - AISIN CORPORATION, Akebono Brake Industry Co.,
Ltd., NOK CORPORATION, JTEKT CORPORATION, DENSO CORPORATION, TopyIndustries, Ltd. and YAZAKI Corporation - got together and started by identifying 112
diverse possible risks from upstream to downstream in the supply chain.
As a result, four issues were identified in particular as those to be addressed: ①

ensuring employee safety; ② managing sensitive technology and preventing military

diversion; ③ business withdrawal; and ④ multiplexing production and procurement, andlocal production for local consumption (efforts to link production), and in May 2023 a new'Sub-Committee' was established within the WG. Efforts were initiated to organize therequired responses, with 41 practitioners from 10 companies bringing their know-how tothe table.

Bringing together the know-how of different companies to create a 'support tool'
The Sub-Committee hand-made a 'set of three support tools' for each of the risks ① to③, which includes information to be referred to, response flows and examples from othercompanies. Although the response to the occurrence of a risk differs according to eachcompany, we wanted to generalize the information as much as possible and make it easy
for our SME members to use, using diagrams and illustrations. It is also useful for head
offices and parent companies in considering their crisis management systems.
The first of the support tools, the 'General-purpose version : Manual for evacuation
outside the country', is designed to ensure the safe evacuation of personnel dispatchedfrom Japan in anticipation of a deterioration in security and infrastructure functions in thecountry or region where the company's bases or subsidiaries are located. The manual ispractical in nature, as it provides evacuation criteria according to risk and crisis level withreference to hazard information by the Ministry of Foreign Affairs,, and includes information
on what crisis management systems need to be set up at the head office and parent
company, as well as a checklist of personal belongings to be carried during evacuation.
The second tool, 'Collection of Knowledge on Sensitive Technology Management' isdesigned to protect technologies that can be converted to military use, advanced andimportant technologies and the core technologies of each company. It focuses on
examples from the automobile component industry, explaining the necessity and possible
risks. It also includes a study of how to protect confidential information in the event ofbusiness withdrawal, which is linked to the study in the third Sub-Committee.
The third tool, 'Business withdrawal Flow' helps companies consider withdrawing fromoverseas operations for economic reasons or geopolitical risks. It illustrates what should
be done by the head office or parent company and the local subsidiary at each stage fromthe preparation phase, based on actual examples experienced by member companies.
With overseas withdrawals not uncommon these days, this manual is intended to help
those who are considering withdrawing their businesses, including small and mediumsized members,
Work with the 'persons responsible for economic security ' of member companies toidentify issues
JAPIA is also promoting activities to require member companies to register ‘a person
responsible for economic security'. This requires member companies to assign a person
responsible for proactively disseminating information on risks and the Japanese
Government's policies and stance to the right internal relatives. JAPIA is also working toraise awareness by inviting lecturers from Ministry of Economy, Trade and Industry (METI)
and other organizations to hold seminars for the responsible persons in each company. Itis also expected to play a role in deepening the relationship between JAPIA and member
companies, by assuming risks even in normal times.
Furthermore, in FY2024, JAPIA aims to create a system to deepen two-way

communication with member companies. The aim is for each company to clarify issues in
its supply chain and to start taking action to further strengthen resilience.
As a 'Sub-Committee', strengthen the ability to disseminate information andthepartnership with member companies and relevant organizations
JAPIA is also strengthening its organization to achieve the aim. The previous Resilience
Strengthening WG was promoted to the 'RS Sub-Committee' this year, with 16 members
from 14 companies. As a Sub-Committee, it aims to broaden and strengthen thedissemination of information and to strengthen cooperation with the government andJapan Automobile Manufacturers Association (JAMA). We will work with each company toidentify individual company issues, with the 'a person responsible for economic security 'playing a central role, and will also make proposals for solutions to problems common to
all companies as industry issues in the future.
The sub-working groups under the Sub-Committee will also continue to be active. In
addition to helping to address the aforementioned risks ① to ③, the Sub-Committee will
also promote initiatives to 'link production' of ④.

Although many companies have expressed concern about risks related to ④, the supply

chain has a broad base, from raw material procurement to production and supply, andmust also be linked to Tier 2 and below. The sub-working group will firstly support

companies to break away from dependence on procurement from specific countries. If raw
materials, for example, are procured from only one country, the political situation may
make it difficult. The first step is to visualize the degree of dependence on specificcountries in the supply chain of each company, and to promote activities to help them takethe next step.
Furthermore, the group intends to grasp the actual situation in terms of costs anddifficulties in gaining the approval of suppliers, and to consider the action to be taken inorder to multiple the line of alternative components and suppliers. The aim is toconsolidate a common understanding in cooperation with JAMA in order to strengthenindustrial competitiveness by taking a bird's-eye view of the supply chain not only for parts
but also for finished vehicles.
Aiming to be an 'Antenna function' and a 'Consultation Desk' for risk
"We hope that the tools we have produced can be used to help member companies
understand what economic security is and how to deal with it when they are faced with it. It
would be good if each company learned about the activities of the Sub-Committee andsub-working groups and provided feedback on issues that are difficult for individualcompanies to solve and what they would like to see addressed, so that our future activities
can be more closely aligned with member companies", said strongly Mr. Norito Otake,leader of the WG for FY2023.
It is not easy to foresee when and what business risks will materialize and how they will

affect your company. In order to provide support to companies, especially those that are
just starting to address them, RS Sub-Committee intends to disseminate the content of its
activities in FY2023 and further improve its tools.
First, we intend to have each company use the three support tools - 'the General-purpose
Version of the Manual for Evacuation outside the country', 'the Collection of Knowledge on
Sensitive Technology Management' and 'the Business Withdrawal Flow' - as part of theirrisk preparedness, and further enhance the contents based on the opinions of eachcompany. We also plan to hold seminars for 'persons responsible for economic security ',which we have asked each company to assign, where experts from central government
ministries, lawyers and consultants will explain risks and the laws and regulations of eachcountry. We will also consider setting up an occasion for the companies to share examplesof their responses and concerns.
Information on 'Support Tools' can be found on the front page in Japanese of the JAPIA’s
Japanese website (https://www.japia.or.jp) under the banner 'Resilience Kakekomidera'.