What happens when disaster strikes the supply chain?

Supply chain disasters: When the unthinkable occurs

For industries with tight production schedules and deadlines, any small disruption in the manufacturing process can cause enormous setbacks throughout the entire supply chain. Years of hard-earned company growth can be dashed in an instant, and sometimes these circumstances are unavoidable. Natural disasters, for example, occur without consulting the whims of the companies they impact – and organizations simply need to find ways to plan for contingencies created by these situations.

For instance, earlier this year, Japanese automobile manufacturer Toyota was forced to close 26 of its car assembly lines, according to The Wall Street Journal, due to a series of earthquakes that took place on the island nation's southernmost region, near Kyushu. The incident was reminiscent of the massive 2011 earthquake and tsunami, which wreaked havoc on Japanese manufacturers and caused ongoing problems in these companies' supply chains. The difference was that Toyota learned from the 2011 experience, and the manufacturer was able to get all of its facilities up and running again after a mere 14 days of stalling.

How can enterprises with global operations managers plan for the worst, as the latest string of earthquakes has demonstrated is necessary?

Visibility is one of the absolute most important aspects of a prepared supply chain.Visibility is one of the absolute most important aspects of a prepared supply chain.

 

Prioritize visibility

The key to effectively managing and mitigating supply chain disasters is having complete visibility throughout the entire operation. In order to proactively react to adverse situations, you need to know where your goods are. In addition, according to Supply & Demand Chain Executive contributor Gary Barraco, one tactic that managers can utilize is to overstock regional distribution centers in areas where an event is suspected to deplete resources.

For supply chain managers, it's easy to see why having highly visible operations is critical, but this visibility is also important for executing key pivot maneuvers when the unthinkable occurs.

"[V]isibility leads to a host of benefits: saving money, reducing inventory, increasing turns, boosting customer satisfaction, lowering risk, enhancing compliance, streamlining transportation, and enabling agility and resiliency," wrote Inbound Logistics contributor Lisa Terry.

Organizations that have flexible, efficient and, most importantly, highly visible supply chains would be in a better position to react and adapt to adverse situations. Over the years, Inspirage has been a market leader in the supply chain consulting space and has partnered with many such organizations across multiple geographies in their pursuit to create highly visible and agilent supply chains. Inspirage’s supply chain solutions built on Oracle cloud-based SCM tools can help supply chain managers leverage key data points and make the best decisions with the power of right information.

Contact Inspirage today for more information about these solutions.

Sambit Misra

Key Contributor: Sambit Misra

Sambit is a Practice Director in the Value Chain Planning division of Inspirage. He has over 16 years of domain and consulting experience across various verticals including manufacturing, engineering, high tech, telecom, pharma and energy (oil & gas). Sambit has handled multiple supply chain transformation projects and traveled to more than 15 countries across all the continents. With a passion for solving complex Supply Chain challenges, he believes that the solution to these are often based on out-of-the-box thinking and simple process improvements.