The disruption to manufacturers worldwide from Japan's disasters will force a rethink of how they manage production.

It's not too long ago when volcanic ash disrupted air transport across Europe and choked the world's manufacturing supply chain - One of its biggest tests since the advent of the low-inventory JIT (just-in-time) era. Now, Japan's disaster - earthquake, tsunami, nuclear crisis and power shortages - has put the whole supply chain under far greater stress. Weeks after the massive quake, the extent of the disruption is still unclear. Not surprisingly, there seems to be some similarities between the current shocks that manufacturing received and the subprime shocks that battered the banking and financial system way back in 2008. In both cases, the problems began in a seemingly well-off part of the system and quickly spread like wild fire sparing no one.

Just like the financial crisis caused a huge liquidity crisis, similarly manufacturing industries are finding that spare parts that had always turned up reliably have stopped coming.

The financial downturn led to many of us learning about unheard of terms and products like “shadow banking” and “arcane derivatives contracts”. Similarly manufacturers are discovering how little they know about their suppliers.

During the Lehman Brothers crisis, financial institutions, including big banks, struggled to survive themselves as they were all in a tangle. Similarly, assembly firms are now finding that their supply chain looks much the same.

As with a few financial institutions which were “too big to fail”, similarly some Japanese suppliers are now being seen as too critical to do without. Let us take the case of two major chemical firms - Mitsubishi Gas Chemical and Hitachi Chemical. These two firms control about 90% of the market for a speciality resin used to bond parts of microchips used in smartphones and other devices. The plants of both these firms were partly damaged in the earthquakes leading to a supply crisis. The compact battery in Apple's iPods relies on a polymer made by Kureha, which holds 70% of the market, and whose factory was damaged.

Due to the Japan crisis, manufacturers around the world are battling to secure components and materials from elsewhere leading to price rises and hefty premiums. This had led to carmakers in Japan and America scaling back production. Toyota fears a scarcity of rubber, plastic and electronic parts. It is not yet clear how worse things will get as existing stocks run down. Nor can Japanese suppliers be sure of how soon they can get back up to speed with Japan still facing aftershocks and new earthquakes. The loss of a very large nuclear plant and shutdown of others has led to unheard of power shortages and load shedding.

Smaller rivals also look set to gain as customers switch part of their orders. For example, Hiwin, a Taiwanese firm with 10% market share for “linear motion guides”, used in industrial machines, may gain share from customers of Japan's THK, which dominates the market with a 55% share and which faces power cuts.

The current crisis may also force suppliers who have near-monopolies on crucial parts and materials to spread production facilities geographically. As assembly firms face financial pressures to keep their inventories down, the crisis may see a new industry emerge - one that maintains essential stocks on behalf of manufacturers.

Over the past decade, the JIT (just-in-time) concept of having supplies delivered at the last minute to keep inventories down spread across the global manufacturing chain. Industrial firms, having spent years becoming ever leaner now realize the risk associated in, making themselves more exposed to these sorts of supply shocks, will now have to go partly into reverse, giving up some efficiency gains to become more robust.