Highlighting the top supply chain disruptions


If logistics managers have learned anything this year, it's that the supply chaincan, and most likely will, be disrupted at some point. Numerous events in the past several months have brought production in several industries to a screeching halt and sent companies scrambling to make up the losses.

And while many of these incidents are out of anyone's control, organizations can reduce their impact by taking the right approach to supply chain management. That, of course, begins with identifying the main threats to the process.

A recent report from the Financial Post did just that by highlighting some of the leading causes of supply chain disruptions.

1. Natural disasters

This one has perhaps earned the most attention thus far in 2011. While we're not predicting the impending Apocalypse, there have been several natural disasters this year that have carried widespread implications for the global supply of certain goods.

First there was the Japanese earthquake and subsequent tsunami, followed by hurricane season headlined by Irene and now the flooding in Thailand. Other acts of God have affected the supply chain as well, but these three have been the most significant.

"Often what is the biggest disruption is more the element of surprise from the disruption rather than the disruption itself," Montreal-based Ernst & Young partner Robert Tousignant said of disasters, according to the Financial Post report.

Planning ahead and expecting that a natural disaster will strike will better allow an organization to prepare for it.

2. Employee availability

Employment trends are a bit easier to predict than natural disasters, but according to the report, there isn't a foolproof method for knowing when the peaks and valleys of employee availability will occur. Statistics for one country may differ significantly from those of its neighbors.

"[I]n the global world of supply," said Linda Conrad, director of strategic business risk for Zurich’' North American division, "how would you have any control over whether or not you can get folks to work in Chile or Indonesia?"

One way to combat such issues, Conrad said, is for a company to familiarize itself with the local culture as much as possible. For example, about half of the Chinese population does not work around the Chinese New Year and half of those never return to their jobs, she added.

No company is safe from supply chain disruptions, as a recent Supply Chain Digital report said 85 percent have been affected this year, so making the appropriate preparations is important.