Supply Chain Disruptions Come Without Warning

March 22nd, 2011

Today’s post is borrowed from Sourcing Innovation.

Most of my customers know that I recommend Sourcing Innovation very highly as a world class source of supply chain and sourcing information.

 The following post titled Supply Chain Disruptions Come Without Warning that focuses on the multitude of issues that can have an immediate impact on our supply chain. Enjoy.

Everyone is still talking about the recent Japan earthquake and the ramifications it will have on your supply chain for weeks, months, and years to come. No one is talking about the fact that, thanks to global warming, forest fire season is now upon as and that more than 30 wildfires raged through Oklahoma last weekend (Source) and that it only takes one fire to destroy a plant or distribution centre.

But it doesn’t take a natural disaster or a political uprising (such as the recent ones in Egypt and Libya) to instantly shut down your supply chain. A simple regulatory decision can have ripple effects through your supply chain. On March 10, the US Transport Security Administration (TSA) issued an emergency amendment to security measures that would take effect immediately that required freight forwarders with air cargo operations at non US locations to request additional information for all shipments on each master airwaybill (MAWB). As a result, Air Canada had to embargo all cargo flown to the US until further notice until they could be sure they were in compliance. (Source) Now, this embargo only lasted a day, but it could have lasted a week had the regulatory change been more onerous. But like a natural disaster, this disruption came without warning to shippers who relied on Air Canada to deliver their goods to the US.

That’s why you need contingency plans drawn up and ready to go, because you never know when you will need them.

We look forward to and appreciate your comments.

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