2 Replies Latest reply on Mar 8, 2010 5:55 AM by aizar

    Supply Chain Disruption

    sandeep_chatterjee Newbie

      There is a high tech company which has contract manufacturers

      all round the globe. The company has worked on what percentage of manufacturing to be done from each site based on supply chain optimization taking into factors supplier capability, logistics cost, time to market. There is a political disturbance in one of the geographies which forces shutdown of two manufacturing sites in one country. This is a sudden supply chain chaos as the company has to rechannel the manufacturing to other locations provided they have the capacity and expertise. Should the company do a what-if scenario analysis to ensure that these kind of supply chain disruptions do not have a catastrophic effect?

        • Re: Supply Chain Disruption
          janhusdal Apprentice

          Yes, of course. Perhaps the company did not do their homework in the first place, as political unstability usually is not something that appears sudden and out of the blue. In some countries, yes, but that risk should have been evalauted before going in to that country. Cost-efficiency and production costs took priority over potential disruption costs, and look what happended...

           

          Of course the company should do a what-if analysis to select the best (not necessarily the least-cost) solution to solve this issue. Simply scrambling resources and rechanneling the manufacturing without evaluating the consequences is not an option.

           

          Here are a couple of examples of how other companies have reacted: Robust strategies for mitigating supply chain disruptions

            • Re: Supply Chain Disruption
              aizar Newbie

              failure modes and effects analysis (FMEA) seems to be the good procedure to handle this type of systemic problem and anticipate a possible need of re-calibration of sourcing. It will permit to this company to make the good what-if scenarios based on probability of issues' occurance and criticality.