Disasters continue to impact global supply chain

From massive earthquakes and tsunamis to devastating hurricanes and tornadoes, there have been plenty of natural disasters disrupting the global supply chain this year. It appears that another can be added to the list, as flooding in Thailand has been affecting Japanese electronics and automobile manufacturers.

Natural disasters are, unfortunately, common and little can be done to prevent their harmful effects. It's important for companies to continue employing supply chain management solutions so that the aftermath of a natural disaster doesn't completely disrupt the manufacturing process.


However, the flooding in Thailand has been difficult to overcome for many companies with interests in the Southeast Asian nation. The worst flooding in 50 years for Thailand has impacted the supply chains for Toyota, Honda and Nikon, among many others.

"Many assembly plants were closed [as of October 12], in some cases because floodwaters had breached factory buildings and damaged production machinery," Tokyo-based Financial Times reporter Jonathan Soble wrote recently. "Other plants have avoided inundation but are cut off from component suppliers and workers by flooded roads."

Supply chain community management is more important than ever in such trying times, according to experts. Communicating with business partners can allow a company to determine the damage flooding or other disasters have caused more accurately and move onto the business of dealing with the issues.

Working closer with partners through B2B integration strategies can also mitigate the threat natural disasters pose for the supply chain. Identifying possible issues beforehand, a company could have a contingency plan in place to ensure that manufacturing is not stalled completely.

In normal circumstances, analysts agree, companies in Japan would simply ramp up production at home to make up for losses caused by Thailand's flooding. However, according to the Financial Times, most organizations are already operating at full capacity to make up for lost caused by the earthquake and tsunami earlier this year.

So far, nearly 300 people have been killed by the flooding in Thailand, and the forecast calls for more heavy downpours in the coming weeks.

In August, several experts spoke to the Silicon Valley/San Jose Business Journal about how to protect supply chains against disasters. They said that companies should diversify partners so that not all are located in vulnerable areas and also identify certain failure points where a natural disaster could be especially devastating.