Chapter 17
Continuing Business/Operations During a Disaster
Field of Expertise: Disaster Management Social Systems

Hiroaki MaruyaSummary
In the Great East Japan Earthquake, not only did the tsunami and earthquake cause direct
damage to enterprises, but they also caused indirect damage through a supply chain that affected
other enterprises, which then spread the affects abroad. In addition, a lot of damages to the mainbuildings of local governments occurred, which delayed the initial response of disaster victim reliefand recovery. Consequently, the governments revised its Business Continuity Guidelines based onthese lessons, and they promoted Business Continuity Plans (BCP) which can reduce unexpected
situations. In the government organizations, securing substitute buildings was emphasized and theBCP formulation of the municipalities advanced to some extent.
Keywords: Business Continuity Plan (BCP), spread of the indirect damage, supply chain,
substitute site, damage prediction

Introduction
Since around 2000, recognizing the necessity to disseminate BCPs to enterprises andorganizations increased so that they would be able to continue critical business even if they weredamaged by disasters in Japan. The Government publicized the Business Continuity Guidelines in2005 (Figure 17-1) to promote BCPs. However, a lot of enterprises which did not have BCPs were
hit by the Great East Japan Earthquake, and the cases that formulated BCPs did not work
sufficiently also occurred. Therefore, the spread and improvement of BCP became urgent.

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Figure 17-1. Recovery curve that business continuity aims for

1: Problems Revealed by the Great East Japan Earthquake
What happened?
In the Great East Japan Earthquake that occurred on March 11, 2011, many enterprisessuffered from the earthquake and tsunami directly, and were unable to continue their business.
Furthermore, the damaged enterprises which had produced primary materials stopped their supply,
which interrupted other enterprises through the supply chain. Thus, indirect damage occurred.
These troubles spread widely both in both Japan and abroad.
In the inquiry survey by the Tokyo chamber of commerce in March and April in 2011, 92.7%
of all enterprises answered that they were experiencing the effects. According to the type effects
that were being experienced, 78.2% attributed it to “Business conditions, such as the number ofsales/customers”, and 59.6% said it was the "Procurement conditions such as materials or goods".
The former was caused by a decrease in demand, which influenced the enterprises. The latter wasa more serious problem for an individual enterprise, and they had to procure substitute materials orgoods as soon as possible.
As for public organizations, a lot of the main government buildings of the municipalities
turned out to be unusable. Table 17-1 shows that 13 municipalities had to move all functions of themain building elsewhere. The breakdown of the main buildings which should work in the frontline
for relief and recovery caused the delay of initial response. Furthermore, the main building of theFukushima prefectural government office also became unusable.
The reality of the damage
The automobile industry, for example, suffered serious damage. The monthly output of carsin Japan was 800,000 in February 2011, then decreased to 400,000 in March and 290,000 in April.
Toyota Motor Corporation was affected by the damage of the finished vehicle assembly plant inMiyagi Prefecture, but the bigger drawback factor was the damage of the Naka Factory of the2Renesas Electronics Corporation which produced the car parts such as microcomputers forengine-control and so on.
Table 17-1. Damage to the main buildings of city, town,
and village governments, caused by the Great East Japan Earthquake

At the time, these parts were not produced in other factories at all, and a long time would
be required to begin production in other factories. Many enterprises which had received supply ofthe parts tried to shorten the recovery term, but it still took three months. Therefore, the domestic
factories which had received the supply totally stopped operation approximately two weeks later.
Then the factories restarted partly at the end of March, but the short supply of parts continued.
Factories in other parts of Asia, the United States, and Europe stopped operation in late April, due
to the time lag of the transportation of the parts.

2: Effectiveness of BCP was doubted in the Great East Japan Earthquake
The reality of insufficiency of the past
In the beginning of the introduction of BCP in Japan, the principal objective of the Government wasto push forward quakeproof countermeasures to enterprises based on lessons from the 1995 Great
Hanshin-Awaji Earthquake. Therefore, in early BCPs, many companies planned early on-the-spot
recovery in the time of earthquake by anti-seismic reinforcement, etc. However, the tsunami that
occurred in the Great East Japan Earthquake, and its damage greatly exceeded the anticipateddamage of the tsunami at the time. The enterprises which were not prepared for this unexpected
damage, namely infrastructure and essential utilities in the area being completely lost and having
an inability to forecast how many months or years it would take for on-the-spot recovery. For thatreason, they could not start recovery and were able to do nothing.
Furthermore, the enterprises without BCPs did not even have an occasion to think about asubstitute site beforehand. Therefore, most damaged enterprises lost customers due to the laterecovery, except for a few good practices (Maruya, 2016) in which an effective alternative basehad been already considered, or a useful alternative base could be found immediately.
In addition, BCP did not spread to administrative organizations in the disaster area. There
were few examples in Local Disaster Management Plans, in which they decided on a substitutesite in case their main building was lost.

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3: A New Approach ~ A BCP That Does Not Leave Room for the Unexpected~
The lessons learned in the BCPs of enterprises and organizations after the Great East
Japan Earthquake were necessary for the improvement and ensuring that the unexpected would
not occur. The Business Continuity Guidelines of the Cabinet Office were revised in 2013, and thethird edition was created (The Cabinet Office, 2013). This guideline emphasizes the importance ofrecognizing the variety of the type and the level of crisis, and to introduce “substitute strategies”
which are commonly effective in many types of disasters, rather than assuming a single type ordegree of disaster and formulating a BCP that will just barely overcome it.
Specifically, the direct cause of the critical operation disruption was the lack ofindispensable resources to the critical operations, such as sites, facilities, persons, information,etc., regardless of the type of disaster. Therefore, the guidelines emphasize the necessity tosecure substitutions for resources (a substitute site, for example, see Figure 17-2), when
considering the possibility that the company would suffer a large amount of damage. The
guidelines also promote the enforcement of the countermeasures to secure these substitutions.

Figure 17-2. Substitute Strategy and On-the-spot Recovery Strategy
For central and local public authorities, the government revised guidelines and guides, andemphasized the necessity to secure substitute sites, emergency electric power, the means ofcommunication that would be available in the time of a disaster, etc. and promotional policies tosecure these were implemented.

4: Achievements and the Future
A new approach to disaster science
The result of the BCP formulation rate researched by the Cabinet Office every two years
showed 68.4% of large enterprises had formulated BCPs (Figure 17-3), and 34.4% of mediumsized enterprises had formulated a BCP by 2019. According to the survey by Teikoku Databank,the formulation rate of BCPs including medium and small enterprises remained at 16.6% in Japan4

in May 2020. Although I do not think the BCP document is required for all medium and small
enterprises, BCP is surely necessary for the suppliers of important parts and materials that have avital role in supply chains. Therefore, I think the necessity of BCPs is still high.

Figure 17-3. The status of corporate BCP creation (large companies)
For the central and prefectural governments, all have formulated BCPs. According to theinvestigation by the Fire and Disaster Management Agency, 89.7% of the municipalities had
formulated BCPs as of June 2019. Provided, I think that it is necessary to confirm whether theseBCPs are sufficiently effective or not.
New support measures for business continuity ability improvement
Reasons why BCPs do not spread to medium and small enterprises often include that they
do not have enough knowledge and know-how of the BCP formulation as well as not having thehuman and financial resources. Therefore, I analyzed the situation of formulating BCPs of medium
and small enterprises and published the “BCP Introduction Guide for Medium and Small-Sized
Businesses,” (Maruya, 2020) consisting of 14 chapters, and have continued to update it. This guideis available on my laboratory website.
Additionally, I made a hypothesis that medium and small enterprises do not necessarily
make detailed documents of BCP in full scale to raise their ability to continue business. I am now
researching the necessary elements to improve the business continuity ability of medium and small
enterprises and the reinforcement measures of these elements. For example, one possibility is tocarefully prepare a list of parties that should be contacted as soon as possible in order to continue
business immediately after a disaster. Using the results of these studies, I also conducted 6
consecutive BCP monthly open lectures at our institute in 2019.

Conclusion - from the author
The Small and Medium Enterprise Agency started the recognition system of the "BusinessContinuity Ability Improvement Plan" in 2019. Through this, we expect that the support from the5Government will be strengthened. The cooperation among industry, government, and university
are also expected to develop. However, it is not easy for the enterprises which are very busy withdaily management tasks to work on formulating BCPs. And now, COVID-19 has been spreading
since early 2020 and it has become a new risk for business continuity. As the study on thecorrespondence to the disease in BCP is needed as soon as possible, experts, including myself,have started research and have begun to propose countermeasures.

References
Maruya, H., Torayashiki, T. (2016). Required Factors of Business Continuity and Problems inRestoration Systems for Business Continuity Found in the Hearing Survey on Companies Affectedby the Great East Japan Earthquake. Journal of Institute of Safety Science, 28, 69-79.
https://doi.org/10.11314/jisss.28.69 (In Japanese)
Maruya, H. (2020). BCP Introduction Guide for Small and Medium-sized Enterprises - Explanationof BCP formulation by way of sense of purpose and difference of strategies, and emphasizing theeffectiveness-. Maruya Laboratory. http://www.maruya-laboratory.jp/bcm-bcp (In Japanese)
The Cabinet Office. (2013). Business Continuity Guidelines third edition. Government of Japan.
http://www.bousai.go.jp/kyoiku/kigyou/keizoku/sk_04.html (In Japanese)6