Protecting your supply chain against catastrophic events
Natural disasters, such as floods and fires, have significant ripple effects on global supply chains. The 2011 earthquake in Japan disrupted automotive supply chains worldwide, while Hurricane Maria in 2017 caused shortages in hospital supplies in the US. A recent survey by Interos revealed that 96% of enterprises are unaware of supplier disruptions until 48 hours after a natural hazard occurs, resulting in a loss of $45 million annually. It is crucial for procurement teams to identify suppliers located in disaster-prone areas and develop contingency plans to ensure business continuity.
Source: Link
Frequently Asked Questions
Q: How can I protect my supply chain against catastrophic events?
A: There are several measures you can take to protect your supply chain against catastrophic events. Some suggestions include:
- Implementing a robust risk management strategy
- Diversifying your supplier base
- Establishing backup production facilities
- Maintaining clear communication channels with suppliers
- Regularly assessing and upgrading your infrastructure
Q: Where can I find more information about protecting supply chains?
A: Here are some resources that provide insights into protecting supply chains:
- IMF's response to COVID-19 FAQ - The International Monetary Fund (IMF) offers information and guidance on managing adverse events, including supply chain disruptions.
- Supply Chain Resilience Guide by FEMA - FEMA provides a comprehensive guide on supply chain resilience, which can help protect against adverse events.
- Supply Chain Disruption and How to Respond by Accenture - Accenture's article offers insights on responding to supply chain disruptions, which can be valuable in protecting against catastrophic events.
Q: How do I create a disaster recovery plan for my supply chain?
A: Creating a disaster recovery plan for your supply chain involves the following steps:
- Identify potential risks and vulnerabilities
- Assess the impact of each risk on your supply chain
- Develop strategies to mitigate and manage risks
- Create a communication plan to ensure clear and timely information exchange
- Regularly test and update your plan to reflect evolving risks and circumstances