Supply Chain Management and Logistics Risk


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As supply chains grow in size and importance, your company will need to pay closer attention to production facilities around the world. What if a disaster forced a shut down at a critical plant thousands of miles from your headquarters? Do you have a process in place to deal with it?
You need to first of all establish procedures for each plant and for each possible type of disaster. This includes lower-tier suppliers too (your extended supply chain). Know how each plant interacts with the “grand plan” of your supply chain, as well as with other components of the supply chain. Not knowing this could surprise you with a “domino effect” where the loss of one plant shuts others down for lack of parts. Work with suppliers to educate them about your disaster plan. Conduct reviews with them. When you are building your plan, concentrate on recovery and alternatives.

Just what kinds of disasters are we planning for? You name it and it has probably happened somewhere in the world. We know, of course, about natural disasters: hurricanes, tornadoes, floods, snow. Add to this list terrorist attacks, health epidemics, theft (physical or data), all the way to pirates capturing your ship.

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