Supply Chain Disruptions

Earlier this year the earthquake, tsunami, and radiological leaks reeked havoc on the residents of northern Japan. These same natural disasters impacted many manufacturing facilities for automotive parts and electronics – in effect, shutting down supply chain routes for many international corporations.

About two weeks ago major flooding in Thailand ravaged thousands of factories and parts manufacturers in the suburbs north of Bangkok. Companies such as Seagate announced that their factory which produces disk drives is underwater; while Canon’s printer-related factory is also submerged. Automotive companies such as Honda, Toyota and various car makers from India get components, transmissions and engines from subcontractors in that same flooded region of Thailand. While electronics manufacturers are also heavily dependent upon production from manufacturers in that area. Nikon Corporation’s Thailand plant produces low- to mid-range single-lens reflex cameras, which accounts for 90 percent of the company’s SLR camera production. Sony Corp. manufactures all of its digital SLR cameras in the same region.

Closer to home, this past weekend saw a massive snowstorm blanket the northeastern United States, knocking out power to millions, and once again disrupting supply chain channels to thousands and thousands of companies.

Based on all of this news, have you stopped to examine your organization’s supply chain? Do you know where your company’s raw materials are manufactured, and have you considered contracting a secondary manufacturer as a backup? Have you asked your manufacturers to provide you with a copy of their business contingency plan? How will they support you if you have a disastrous incident, and equally important how will they support you if THEY have a disastrous incident?

Supply chain mapping and understanding where your goods and services are produced or are run from are an important part of the business continuity manager’s role. Take the time now to understand your supply chain and to have alternate plans in place — proactive planning will save your company from the impacts of a third-party disaster.

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