Anticipating supply chain problems

on Thursday, December 20, 2012

Anticipating supply chain problemsMany corporations have had to work around a disaster that greatly disrupted their supply chain, such as Hurricane Sandy, which hit the East Coast in late October. While many businesses may aim to keep their supply chain management as smooth as possible, unexpected events do still occur and wreak havoc on carefully planned sourcing strategies, manufacturing operations and logistical operations.

A recent piece on the Harvard Business Review makes the point that if it is possible for storms and other natural disasters to be predicted, companies should be able to work around those disruptions and keep their supply chains free from severe consequences. While it may be impossible for a business to avoid every problem that comes its way, it can develop strategies that can help to prevent serious disruptions and potentially result in long-term cost savings.

Developing a plan
Should a natural disaster occur, a company's supply chain team should be prepared and develop a plan with suppliers, manufacturers and transportation providers to ensure a viable backup plan is in place. Without a secondary plan that can be utilized during emergencies, a company may find itself unable to procure raw materials necessary for manufacturing, resulting in potential product shortages, or incapable of getting its product to market, which can be devastating for an organization's profits.

When news of an impending disaster hits the airwaves, a company should take action and determine which aspects of its supply chain could be impacted, and how it can work around these problems to ensure it does not face severe consequences.

Continued improvement
A company should continually seek to better its processes and determine which practices are deficient and could lead to further problems in the event or a disaster. New technology, such as big data and cloud developments, can serve to help a business gather more data and have access to more information than ever about their supply chains, processes and expenses. These new tools can assist a firm in making better supply chain decisions and determining where any inefficient processes are and how they can be resolved.

Supply chain professionals need to be prepared for events such as winter storms, hurricanes, floods and other weather events that can result in lost profits and disrupted business, which can have a significant and long-lasting impact on an organization.

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