Supply chain toolkit: How managers prepare for the next crisis
Procurement, operations and logistics work together to mitigate and avert risk.
When an earthquake strikes, it’s not just the ground that shakes: Natural disasters frequently disrupt supply chains, piling opportunity cost atop property damage for millions of dollars in damage.
A tremor hit Japan’s Kumamoto Prefecture last year. Hundreds of buildings fell, thousands of people were injured, and, for days, the world watched as a city destroyed picked itself back up. But the ripple effects of the quake spread beyond the island nation to global stores and dealerships as companies like Toyota and Sony halted production due to inventory shortages. Sony later reported the event cost the company over $1 billion.
Nowadays, the global nature of supply chains make such events inescapable; but what is to be done? Whether it is an earthquake in Japan, a hurricane in the U.S. Gulf Coast or strikes in foreign nations, crisis management has become part and parcel of the supply chain manager’s job.
It is a team effort, however: During each crisis, the procurement, logistics and operations departments must all do their part to ensure the chain’s resilience. In turn, each department should have a toolkit to reference when disaster strikes.
The Supply Chain ToolkitLogistics Operations Procurement
In this latest series, Supply Chain Dive asked professionals in each department to share how they mitigate crises. Three main lessons emerged: A resilient chain requires full visibility, a clear crisis continuity plan crafted by diverse stakeholders, and active communication upon disruption.
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