Supply chain disruption contingency planning – do it now

The recent disasters in Japan, as well as other global crises in the last decade, have demonstrated an unfortunate side effect of the interconnectedness of global supply chains.  While suppliers in the affected regions clearly may have difficulty meeting demand, other vendors in your supply chain — located far from the disasters — may be similarly affected if they rely on receiving components from those regions.

SupplyChainBrain‘s Robert J. Bowman, in his blog post “Another Disaster, Another Supply-Chain Disruption.  Will We Ever Learn?”, notes that fewer than 10% of companies have adopted contingency plans to address this issue.

Bowman offers some recommendations:

  • Know who is supplying your Tier 1 suppliers, and distribute your global supply chain base accordingly.
  • Diversify your supply chain base by using an alternate vendor on a regular basis, so you can be up and running with them if a disaster adversely impacts your Tier 1 supplier
  • Develop a detailed contingency plan, assigning specific roles to your supply chain employees, and providing them in advance with the tools they need to implement the plan.

The full blog post is available here.

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