Dave Alberts, director at Crimson & Co, a major UK end-to-end supply chain consultancy, has commented on the effects of the recent severe weather worldwide.
“Last year’s Tsunami in Japan wreaked havoc on businesses and supply chains alike, with widespread affects across the globe. Now the floods in Thailand have caused two-thirds of the country to be affected, initiating factories and supply chains to face disruption as the severe flooding impacts Thailand’s economy. Companies such as Western Digital and Honda Motor have been forced to stop production in central Thailand due to disruptions to local supply chains and some Japanese car manufacturers such as Toyota and Nissan are also experiencing production disruptions. Sony temporarily closed its facility in Ayutthaya and Seagate Technology has also said its production of hard drives in this quarter will be effected by supply chain disruptions, and that supply will be constrained until at least Q4.
“Clearly there are disadvantages to sourcing products from countries that suffer from extreme weather conditions, especially when supply is so geographically focused. Astoundingly, a quarter of the world’s hard drives come from a relatively concentrated area around Bangkok!
“In other sectors the weather is also already affecting the resilience of global supply chains. Marks & Spencer, Starbucks and The Body Shop are just a few examples of companies who have contributed to research on how flooding, drought and other extreme weather conditions are threatening supply of particular goods.
“Unfortunately, there is no way in which to fully prepare for such natural disasters as they are unexpected. However, the frequency at which these occur validate that contingency plans must be put in place wherever possible and organizations must attempt to protect product supply through efficient, planned out strategies and best practices. Research into the effects is a good start and companies participating in this are clearly at the forefront of successful and adaptive supply chains.
“Is it all linked to global warming? Well we could all break into small groups to discuss. But in board rooms around the globe supply chain resilience is back on the agenda as ‘business as usual’ status has yet another threat.”
ABOUT CRIMSON & CO:Established in 2003, Crimson & Co is a fast-growing supply chain consultancy with a strong reputation for developing and implementing end-to-end supply chain solutions across the globe.
Crimson & Co helps companies to identify their key business needs and design their supply chains accordingly. Crimson & Co’s powerful supply chain improvement approach identifies performance weaknesses and prioritizes improvements, based on process benchmarking. This prepares the ground for major IT implementations or acquisitions, driving longer-term continuous improvements, and essentially, ensures alignment of the supply chain with overall business strategy.
Sometimes these solutions might involve existing infrastructure, such as increasing the productivity of a production line or throughput of a warehouse, while other solutions might include infrastructure changes. The overriding need, however, is always to look at the supply chain as an end-to-end entity, even when the focus for change is in one specific area.