We're seeing something similar in Japan to what happened after Katrina hit the US: businesses move faster than governments.
The government in Japan is still trying to grapple with all the different crises that are in play at once: debt, infrastructure damage, communication, record-keeping, people living in shelters, shortages of supplies, and the ongoing threats (shortage of power food and water in the North, possible further quakes, tsunamis, and of course the multiple ongoing issues at the Fukushima nuclear plant). Simply put, in a huge crisis like the Japan quake, even a prepared government with disaster recovery bureaucracies can't integrate information, make decisions, and get feet on the ground at a pace that many would hope for. In Katrina, there was a long delay before the US began using military resources and got private resources lined up to make direct help. Things are going to take longer in Japan, it seems.
Meanwhile, we're seeing businesses in Japan grab their contingency plans and snap into operation as fast as they can. That's ranged all over the place, from hiring buses to move employees out of the affected area to a new temporary facility to doing what Nikon did last week: move some parts production completely overseas.
It's far too soon to be making any long-term predictions about what the full consequences of 3/11 will be on Japan, let alone the camera industry or Nikon in particular. But the bottom line is the bottom line: businesses don't survive if they don't act quickly on major disruptions like this. Virtually every tech business on the planet is looking at its supply chain right now (see this New York Times article). And they're not hesitating to act where they see gaps and shortages occurring.
That alone may have a big impact on Japan, because almost certainly short term fixes to the highly disrupted supply chain will be made outside of Japan. Why? Because the Japanese government can't tell you how fast reliable infrastructure will return to Northern Japan. Indeed, the World Bank today estimated that it might take five years for Japan to rebuild. Businesses can't wait that long. Most can tolerate a quarter or two of lower financial results, if need be, but not five years worth.
Now that it's clearly visible just how vulnerable a tightly grouped supply chain is to this kind of disruption, we're back to the idea of spreading risk over more areas, not grouping it in one. Thus, it's very possible that we'll see Japan themselves doing more outsourcing and less manufacturing. You can already see that in the lowest cost items, but the higher cost ones (high-end cameras, automobiles, etc.) survived the first way of off-shoreism that hit Japan. They might not survive this one. There's opportunity in that transition, too. It's time that more of Japan's companies become truly global, for instance, and some of the decisions they're facing are a chance to do just that.
I've gotten a lot of "will the quake change Nikon's product announcements" questions in the past week. My answer to that is "for many, no, for a few, we may see some slippages in delivery." So let me elaborate:
- Coolpix: no likely changes. Supplies might get limited at times due to temporary parts shortages, but both announcement, release, and shipment dates ought to stay pretty much on track.
- Mirrorless: this camera is being produced off-shore as I understand it, so it's like the Coolpix in most respects. Given how far Nikon is into the release preparations, I doubt that it will be delayed.
- D5100: this camera is produced in Thailand. The big problem for it has always been the ongoing D7000 demand clogging the plant's delivery abilities. But we'll see it soon.
- D4: at this point the D4 hardware would probably have been locked, though not yet in production. Sendai would have been retooling for parts changes, but that plant is currently not operational. Putting a camera into production follows a fairly regular course and the primary things now would be moving everything into production and continuing last minute work on the firmware and tuning. My guess is that Nikon has two things to solve that just became huge hurdles: how to machine parts (Sendai did most of that for the higher-end DSLRs) and where to assemble. It's already been noted that the lens mount manufacturing has been moved offshore; we'll probably see more of this to solve the machining problems. The only question is where they'll assemble. Sendai does not seem likely simply because shipping things into and out of there is still going to be problematic in the time frame we're talking about (late this summer). I think that assembly will dictate when we see the D4 in customer's hands.
- D400 and/or D800: these are the wild cards. A D400 would likely be made in Thailand, so the primary hurdles would be productivity in the headquarters R&D unit and parts supply. The D800 would represent another Sendai product, and would involve all the same problems as the D4.
Will parts supply impact schedules? Not likely that I can see for the camera bodies. Parts supply might impact how many get produced and how fast, but not likely change development or release schedules. We may see some "announce then ship" rather than "announce and ship" situations, but I'm pretty sure the camera companies need to push through the problems and keep on schedule. The expected revenue from new products is needed, even if margins drop for a time.
What we haven't heard anything about is lenses. The Made in Japan lenses (both Canon and Nikon) are made in plants in Tochigii, which is an area that suffered some quake damage (it's inland, so no tsunami damage), and which is going to be impacted by the power situation. Moving glass operations is much bigger deal than moving the camera operations, I think, so I would guess that Nikon will stay the course with high end lens production, even if it means shortages in the short term. Note to Nikon: this would be the perfect time to revisit your antiquated distribution and warranty policies. You don't want inventory sitting unsold in Country X when it could be sold in Country Y. Unfortunately, that's exactly what is likely to happen if you don't change the policy.
I'll continue to report anything I hear about changes in schedules, products, or production that impact this site's readers, but it's time for me to get back to catching up on reviews, articles, and more.