“We have seen that disruptions to supply chains caused by natural disasters—earthquakes, tsunamis and volcanic eruptions—and from criminal and terrorist networks seeking to exploit the system or use it as a means of attack can adversely impact global economic growth and productivity.”
President Obama has assigned department officials to meet with state, federal and international authorities to come up with a way to mitigate these risks. The private sector will also be brought on board.
In addition to this week’s attention from the White House in regards to supply chain risk, World Economic Forum (WEF) released an industry report, New Models for Addressing Supply Chain and Transport Risk. In this report they conclude that effective risk mitigation will include improved risk legislation, enhanced assessments of risk as part of planning process (scenario planning), trusted networks, and data and information sharing through collaboration and improved visibility. The players will be not only the supply chain industry but also its customers and government.
Designing products that minimize supply chain risk, maximize flexibility and lower cost of goods sold can be difficult, especially given today’s complex global supply chain. Improving communication and collaboration throughout the supply chain, while increasing enterprise visibility into supply chain information during product development, can help to identify risks earlier and plan for them.
When faced with an unexpected event, you can be prepared to make decisions quickly to minimize the impact, and most importantly, avoid delays and lost profits.
The people who seem to recover from a disaster the quickest are the ones who planned ahead. They tell you to always have half of a tank of gas in your car, bottled water, first-aid kits and canned food. How many people do you know that actually do this? If your company relies on supplier parts, materials and products, how can you afford NOT to plan ahead and be prepared?
Photo courtesy of The White House photo galleries/photographer Pete Souza