Preparing for disasters: engineering a resilient supply chain

They say a wise man expects disaster every seven years, but a supply chain manager expects it every day

The global, connected world economy has arrived, for all practical purposes. International trade has risen to levels that economists dismissed as idle dreams a few decades ago. Lean, agile supply chains have resulted in low cost, high quality consumer goods delivered to the customer’s door in a few days, and a higher standard of living in innumerable developing cousupply chain and logistics in the UKntries.

On the other hand, the new way of doing things leaves us all more exposed than ever to disaster. A hurricane, a market collapse, or even a temporary economic hiccough that older business models could take in stride can put ‘lean’ operations to the test in new and unexpected ways.

Hurricanes in the US triggered fuel shortages and energy prices to soar around the world. Japan’s 2011 earthquake and tsunami it the world’s third largest economy hard, and caused GDP to dip more than 8% (not to mention an ongoing radiation leak into the sea, which will have its own economic effects soon enough). The supplies that industry, manufacturers and consumers all rely on have never moved farther on their way to market than they do today, and stocks and margins have never been leaner.

Supply chains here in the UK are vulnerable to events all over the world, and we have to be able to maintain operations even in the event of the next catastrophe. Disruption is no longer the exception, it is the rule.

So how do we make our supply chains disaster-resistant? How can we be more resilient in this market?

First, we must be prepared to keep our composure during a potential disruption. I don’t mean that ‘stiff upper lip’ stuff, but we need to act quickly and intelligently to any emergency.  One way to do that is to have a series of plans in readiness than can be quickly adapted to almost any kind of market fluctuation or supply hitch. Another is to have a tested, responsive and flexible supply chain already in place.

So, what do we plan for?

If I had a crystal ball, I wouldn’t be in logistics, I’d be down at the betting shop. Still, a lot of experts have weighed in on this subject already. The World Economic Forum conducted a survey last year, and a thousand experts gave their thoughts on what we need to look out for in the next few years. It is available here, and is well worth a read. I couldn’t hope to summarise it here.

No one could hope to prepare for every possible disaster, but knowing, in a general sense, what could happen can help us plan for it. This kind of global awareness is now required, even for supply chain managers of purely local concerns.

If you would like some advice with companies that provide professional supply chain management in the UK, click here.

 

 

 

 


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