A Globe and Mail article on November 2, 2011 reports that the flood in Thailand in early October has generated a 400 death toll, closed 10 000 factories, and put 660,000 jobs at risk. Honda Motor Co. Ltd. is one of the many affected after the natural disaster.

A flooded Honda dealership in Thailand. Source: CarNewsWeek.com

Honda was far from recovering after the Japanese earthquake and tsunami earlier on this year before facing another catastrophe a few weeks ago. The slowing export of car parts from Honda’s factories in Asia has put assembly lines in North America on hold.

Thailand is the Southeast Asian epicenter for manufacturing car parts for Japanese car makers.

To avoid a similar disruption to international supply chains in the future, Honda should consider diversify the location of manufacturing plants and be particularly careful choosing to develop factories in regions as volatile as Thailand, where natural disasters such as tsunamis, typhoons and floods are likely to hit every few years.

The same applies to all international companies that depend heavily on its supply chains. Perhaps an emergency fund or a greater variety of manufacturing locations will keep companies afloat in the midst of disasters such as the 2011 flood in Thailand.

How Thai floods are affecting international supply chains. Source: The Globe and Mail