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Supply Chain Risk – When Disaster Strikes

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I am prepared for the worst, but hope for the best – Benjamin Disraeli

Even in the best of relationships, things can happen that are outside of your and your supplier’s control – i.e. weather, financial downturns, labor disputes, etc. In order to minimize the supply chain risk, have plans in place to source components from multiple suppliers (in multiple locations) and consider possible substitutions that don’t compromise quality.

I read recently about how best to establish a partnership in business. The advice was to start by thinking about how the partnership will be dissolved – i.e. anticipate the worst that can happen and structure the agreement based on mitigating those worst things. Along the same line, supply chain risk  can be mitigated by imagining the worst that can happen and structure a plan to address the impact of the worst events.

By failing to prepare, you are preparing to fail – Benjamin Franklin

An example of impacts to logistics and supply chain from within the last year is the bridge closure on Interstate 10 between Arizona and California. A rain storm washed out the bridge in one direction and undermined the structure of the bridge in the other direction. The resulting detour added three hours to the trip, higher fuel costs and delays related to the maximum number of hours that truck drivers can drive in a single day. Learn more in this AZ Central news story about the bridge closure.

http://www.azcentral.com/story/money/business/2015/07/20/bridge-closure-trucking-economy/30434401/

When Disaster Strikes - Bridge Collapse

Penn State Harrisburg is currently studying the effects of supply chain disruptions and how they best can be prepared for. Learn more in this Penn State article on ways to keep things moving.

http://news.psu.edu/story/369971/2015/09/15/research/supply-chain-research-studies-ways-keep-things-moving

 

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And then there’s the highly anticipated weather event, El Nino, which is expected to alleviate some of the serious drought in California, but has the capacity for great damage. Taking a lesson from the last El Nino, there were floods, washed out roads, downed trees and power lines, etc. This El Nino is expected to impact most of North America with almost guaranteed supply chain disruptions. Learn more in this Forbes article on managing supply risk in El Nino.

http://www.forbes.com/sites/paulmartyn/2015/09/29/managing-supply-risk-in-the-fog-of-el-nino/

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Don’t be caught “asleep at the wheel”

Hoping for the best, prepared for the worst, and unsurprised by anything in between – Maya Angelou

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