Ensuring your supply chain doesn’t snap!
Supply Chain The increasing availability of global supply must be accompanied by more informed and expert risk management designed to minimise disruption and maximise efficiency.
The 21st century growth of international industrial supply chains, combined with the increasing ability of the individual consumer to access goods and supplies from the other side of the world, has resulted in the fabulous ability of industry and individuals to locate, order and receive products from all over the world within very short delivery windows. At the same time, improved transit services — both in terms of speed and capacity — have combined to facilitate long distance and concentrated supply chains with ever-increasing efficiency and at realistic and affordable price levels.
But any supply chain is inevitably vulnerable to its potentially weakest links. The best laid plans are subject to delay or even abandonment from natural interventions including weather, earthquakes or hurricanes, or man-made catastrophes such as IT failures, political disruption, war or piracy.
During the last two years there has been increasing concern regarding the threats to shipping in many parts of the globe, notably the targeting of freight vessels by Somali pirates in the Indian Ocean. Operators are now obliged to consider more costly plans relating to both route planning and ship security for the protection of both loads and mariners.
Political conflict in the Middle East seems never far away with its persistent threat to world oil supplies and prices; the recent experience of Hurricane Haiyan and its impact on the Philippines and elsewhere, and the impact of Hurricane Sandy in 2012 and its resultant closure of ports and airports in the north eastern United States demonstrated the potential problems for industry in concentrating supply sources in specific locations.
“Operators are now obliged to consider more costly plans relating to both route planning and ship security for the protection of both loads and mariners”
At the same time the world is seeing increasing cases of cyber attacks at international security levels which are easy to identify as similarly threatening to industry schemes and strategies relating to communication, ordering, supply and delivery.
International trade and industry is therefore obliged to consider how best to protect continuity of operation and supply and to consider its relative options of concentrating sourcing in limited locations, or protecting itself by maintaining a range of supply chains from a range of locations, perhaps at a higher cost but also a higher levels of reliability. A case of not putting all of your eggs in one basket.
The increasing availability of global supply must be accompanied by more informed and expert risk management designed to minimise disruption and maximise efficiency.