As a healthcare company, we recognize that we have an obligation to provide a stable supply of quality products and services. To fulfill this role, Sysmex operates factories in Japan and overseas and has established a global supply structure to meet demand efficiently.
We have also been proactive in securing multiple business partners from which to procure raw materials, allowing to achieve cost efficiencies and providing a backup structure.
Almost every year, disasters occur worldwide, killing a great many people and causing significant damage to the local and world economies. In the past 30 years (1984-2013), more than 2.47 million people have been killed and more than US$2.4 trillion in damage has occurred*. Earthquakes and other large-scale natural disasters occur frequently in Asia, a situation that calls for disaster preparedness and quick response when disaster strikes.
Sysmex has formulated a business continuity plan (BCP) to ensure the continuity of important operations in the event of an earthquake, tsunami or other large-scale disasters, as well as rapid recovery.
To diversify risk related to reagents, we procure key raw materials from multiple sources. Also, we select production locations based on the concept of local production for local consumption. At the same time, we are building a system through which factories can provide supplies to each other in emergencies, and we have secured alternative transportation routes. We have created an internal BCP manual on product supply and conduct simulation training that assumes a disaster situation.
Just after the earthquakes in Kumamoto occurred in April 2016, we set up a product supply countermeasures headquarters that quickly ascertained the status of all suppliers, determined the degree of impact on our product suppliers and worked rapidly to select alternative products. As a result, there was no impact on our production plan.
* Source: Ministry of the Cabinet, website page on "Disaster Management in Japan"
Sysmex works to respond swiftly to changes in global demand for its instruments and consistently ensure a stable supply of its products. To achieve these goals, we maintain appropriate inventory levels of each product at each location, ensure that inventories are located near their markets, and communicate with local subsidiaries to accurately determine the demand status.
We are also building new factories and expanding equipment in anticipation of further growth in demand for reagents. In July 2017, we completed the expansion of our reagent factory in the United States, Sysmex Reagents America, and commenced full-fledged production. By increasing production capacity to 1.8 times its former level, we expect to be able to provide a stable supply to meet demand growth in the Americas over the medium to long term. Going forward, we will continue working to bolster production capacity in line with demand in each region. We will also create regional logistic hub functions in each region to further ensure stable supply.
We will continue improving production lines and logistics to ensure a stable supply of products to meet global demand.