Minutes later, the first aftershock hit. Everyone took cover again. "Most people in my office were Japanese natives, so we expected aftershocks," she explains. "We were concerned about family members, but we had been well-trained to put our safety first.

"Luckily, it was Friday afternoon, and our treasury work was winding down," Osumi recalls. "I had no urgent duties. So I tried to contact my husband in Yokohama to be sure that he was okay and that he would pick up our four-and-a-half-year-old son from the nursery."

Osumi fished out her cell phone, but there was no service. So she slid out from cover and tried the land line, but it was down as well. She tried e-mail, but her husband's PC had been damaged, she later learned, so he didn't get her messages. She gave up. Except for the eerie silence because no phones were ringing, the office seemed almost normal.

Intel's treasury offices are housed on the fifth floor of an older nine-story building in downtown Tokyo, near the financial district. Older, shorter buildings don't have the earthquake sway potential built into newer high-rises, so the jolts were less buffered but caused no structural damage. Periodically, the intercom would crackle, and building management would come on with updates that usually ended by urging occupants to stay in the building and prepare to take cover. Otherwise, Osumi turned to the Internet to find out what was happening.

On the other side of the world, across the international dateline, Ford Motor Treasurer Neil Schloss was sound asleep while Japan was shaking. But when Schloss woke up that Friday morning to the news that tandem disasters had wiped out large coastal areas of northeastern Japan, he knew it was going to be a rough day. Automotive manufacturers have arguably the tightest, most complex supply chains in the world, and Japanese companies are key players.

"We didn't know that day what shape some of our suppliers were in," Schloss recalls. "We had to take stock of how and where our liquidity might be affected. We were concerned first about our people. We have only one small sales office in Japan, in Tokyo, and we learned quickly that those folks were OK. There was a lot of contingency planning right after the tsunami about cash and liquidity.

"We have one large insurance policy for business interruptions, and we did a close review of that policy quickly to understand our coverage," Schloss reports. "We had several credit transactions in process. We were in the middle of adding $1.7 billion to the capacity of our revolver, so we had to communicate with the banks involved to keep that on track. We were looking at all the things that could go wrong. Some of us spent much of the next couple of weeks looking at the ramifications of a worst-case scenario. About a dozen people in treasury were very focused on what we would do if various things went wrong."

Once the dust settled, Schloss found Ford was in pretty good shape. Its cash remained accessible; its liquidity was not in peril. The expanded revolver agreement closed on schedule on March 31. No extraordinary steps were necessary to manage currency risk. While its Japanese rivals were hit hard, Ford faced only manageable problems. For example, some popular paint colors, including Tuxedo Black, were made solely at a badly damaged plant, Schloss says. Buyers can still get those colors if the cars are in dealer stocks, but they will not be able to order new cars in those colors for a while. 

In the sensitive world of just-in-time inventory, Ford anticipated some production slowdowns. It moved to minimize the cost by juggling the schedule for plant downtimes that are a normal part of auto production, moving them up for some plants and back for others, so that they would  be in sync with production and inventory revisions, Schloss explains.

Ford gained planning time because of its physical distance from Japan. "Most of the parts we get from Japan come by boat, so that gave us quite a bit of pipeline," he says. Looking at Ford's working capital numbers, Schloss sees no blips that would indicate slower collections or stagnant inventory build-up.

Meanwhile, back in Japan, Intel's business continuity plan kicked in quickly after the earthquake and tsunami, and the operational duties of Osumi's team were transferred smoothly to treasury colleagues in Asia, who took over currency exposure management for three weeks.

 "It was good to have that backup activated," she says. "It took us a while to get back to normal, and not having to deal with daily transactions took off a lot of pressure."

That was fortunate because Osumi was stuck at home when her usual 45-minute commute turned into an eight-hour ride as a result of heavy congestion and more aftershocks. Some people walked. Electricity was now scarce and rationed, which meant train service was spotty. Gas stations quickly ran out of gas and couldn't be resupplied.

But Osumi could still work. "I had my notebook and access to treasury systems through our virtual private network," she says. "I continued to get e-mails from top management.

"We were instructed to stay at home and put safety first. But I could still go on-line during the daytime and do some critical work consulting and validating our forecasts for the coming period," Osumi explains. "It was all flexible. Nothing had to happen at a specific time, so I was able to manage much of my work from home."

Even though the currency markets were roiled by speculation in the immediate aftermath, Intel's exposures and protections were little changed.

"Our hedging programs are quite systematic," Osumi notes. "We have a policy that sets the percentage of exposure to be hedged and the time horizon for the hedging. We average out the timing of our hedge placements and the execution of the trades. We were very happy that we had a solid, consistent policy in place, one that protected us from any big impact on our financial health due to the disaster and the speculation."

Honeywell International in Morristown, N.J., had to renew a large property policy just as underwriters were reeling from significant projected losses from natural disasters.

"We went through tough negotiations," says Lois Fuchs, vice president of risk management. "In the end, our strong relationships with our insurers enabled us to get the coverage that we wanted. Needless to say, I followed the insurance press closely in April.

"You move quickly to try to ascertain any damage and work to mitigate it and measure it," Fuchs says. "The possibility of nuclear contamination made this natural disaster different. In the end, we didn't have to take any drastic actions, but we moved aggressively to determine whether any were needed."

The property insurance payout for Japan, on top of the losses from the earthquake in New Zealand, floods in Australia and the Mississippi valley and tornados in Alabama, probably will cause that market to tighten, Fuchs says. "Underwriters will have to pass on some of the cost, most likely through premium increases."

Although there was no general crisis at Honeywell, the disaster touched off a vigorous review process. "We have a robust business process around our supply chain," says John Tus, treasurer and vice president. "Once the earthquake and tsunami occurred, each business unit went into action to gauge the impact on their suppliers and customers and to report what they expected. We'd do this in any disaster."

The experiences of the Intel, Ford and Honeywell treasuries provide a window onto the problems for business plans, budgets, cash forecasts, and property insurance availability and pricing. Dislocations could be far-reaching.

"The Japanese will need funds to pay for rebuilding areas that were destroyed, which will take those funds away from other things," notes Mary Ann Dowling, a principal at Treasury Strategies who joined the consultancy in August after seven years in GE's treasury. "Japanese investors hold a lot of U.S. Treasury paper. If they pull those funds out, it will have an impact on interest rates here and the value of the dollar."

Supply chain issues are a big concern. It's no surprise that auto makers would feel the pinch, but companies that you might not expect are also facing issues. Procurement at Diebold, the Canton, Ohio, maker of ATMs, investigated and found "some risk of mid- to long-term disruption from certain second- and third-tier component suppliers," says Rebekah Boyd, a Diebold communications specialist. "One component in particular, used in our currency recycling ATM products and passbook printers, is manufactured at a second-tier supplier's plant in the area affected by the tsunami. As a result, we are extending lead times to customers for those affected products."

Diebold procurement is working with the supplier to determine current inventory levels and plans for getting the plant back online. "We're also working with our engineers to consider the feasibility of substituting a component from another supplier," Boyd says.

Diebold is far from alone. "In terms of trade flows, we expect to see some drop in exports out of Japan as facilities associated with production of parts and finished goods have been damaged in certain areas," reports Jon Richman, global product head of trade and financial supply chain in Deutsche Bank's global transaction banking unit. "Japan is a key player in global supply chains, especially in the auto, semiconductors and electronics sectors.

"In this age of just-in-time production processes, even a small disruption in the provision of a single component can have significant impact across an entire product line," Richman adds. "While the actual costs and impact of these disruptions are not yet quantified, it will take time for corporates to find alternative sources of supply or to increase capacity through other means."

And it's not just hardware that is affected. The supply chain that brings fresh fish to restaurants is feeling the impact as catches are monitored for radiation, Dowling notes.

Insurance is another sector that will feel big impact, particularly the reinsurers, she predicts. "Everyone is reading the fine print in policies to see if there are exclusions," she says. Most policies have deductibles, so insurers won't bear the full cost. Many businesses, including multinationals operating in Japan, self-insure or use captives, so they will feel a direct impact from their losses, Dowling notes. And roads are not insured, she adds.

Credit also may be an issue. If companies have Japanese banks in their credit group, can they expect to hold them when the credit is renewed? That's a good question, says Craig Jeffery, managing partner at consultancy Strategic Treasurer in Atlanta. "Japanese banks—and Spanish and Greek banks for that matter—are mindful of their domestic markets and their capacity. It's safer to have a large group of lenders and not be too dependent on any one country or region."

In the shadow of Japan's cascading natural disasters, the financial sector came through relatively well as Japan's central bank supplied massive liquidity and stabilized the soaring yen. But cracks appeared that are causing global treasury managers to reassess their disaster recovery plans for Japanese operations, says Eiji Oyama, the head of global payments and cash management for the Tokyo branch of HSBC.

In the week following the disaster, there were local breakdowns in payment clearing and settlement that lasted for several days, Oyama says. Some companies noted that a local bank had problems that resulted in non-receipt of domestic payments or an inability to make payments on those days, he says. They were stuck. Even the processing of some payroll files was delayed. Now some companies are revising their business continuity plans so that can't happen to them again.

The breakdown in payments processing is still being investigated, but one possibility cited in press reports is that the flood of money into donation accounts set up for disaster relief overwhelmed systems, Oyama says.

Another issue is attracting the right personnel to Japan. By the time that the damaged Fukushima nuclear reactors added a third element to the disaster, multinationals were pulling nonessential executives from Japan and bringing them home for safety and consultation. "Now some are finding it hard to get senior people to move with their families to Japan," says Torsten Kaehlert, head of transaction banking in Japan for Standard Chartered Bank.

The disaster in Japan may be unprecedented, but after a slew of natural disasters starting with Hurricane Katrina in 2005, treasury staffs have learned how to operate in crisis mode.

Many disaster-tested finance operations already have looked up and down their supply chain and made alternative arrangements or diversified suppliers in case a critical producer couldn't produce, Jeffery notes.

"Greece, Portugal and Spain have provided disasters of a sort as well," he says. "Treasurers are generally aware of supply chain dependencies." In most cases, they have only considered their dependency on direct suppliers, but in complex, tight supply chains, they have looked beyond them to their suppliers' suppliers, he says. The key to keeping operations going is access to good data and flexibility.

"You need to see your exposures across many dimensions," Jeffery adds. "The less data you have, the more you have to rely on what's in people's brains."

To see what risk managers picked as their biggest concerns for this year, read The Sky is Falling.

Read about how Doctors Without Borders finances its operations in The Nitty Gritty of Disaster Relief.