Subscribe to our free, weekly email newsletter!


Securing the supply chain is a constant challenge

By Patrick Burnson, Executive Editor
March 07, 2011

In an era of globe-spanning operations, multiple events over the past year once again underscore the critical need to develop comprehensive business continuity plans in light of supply chain vulnerabilities. 

That’s the conclusion shared with LM by Insight, Inc., a provider of supply chain planning applications in a recent interview.

“Heightened risks and outright disruptions are coming at us at a furious pace and it is absolutely critical that firms be prepared with detailed contingency plans,” said Dr. Jeff Karrenbauer, president of Insight, Inc. “For example, over the past year we have witnessed significant crop failures which roiled commodity futures. We now have strong evidence that the Chinese are stockpiling rare earth metals, substances critical to a host of industries. They have also put into place or proposed onerous local content and ownership restrictions, such as those in the automobile industry.”

Karrenbauer, who also teaches at the University of Notre Dame, told Supply Chain Management Review that the United States is unprepared for a national security emergency that would transfigure procurement and distribution models.

“At Notre Dame, we ‘war game’ this scenario, determining how many DCs we should have, and where they should be located,” he said.

Economic instability and political unrest are increasingly commonplace across the globe, calling into question the survival of governments and economic policies which underpin critical planning assumptions: cost and availability of raw materials, energy and labor, duties, taxes, exchange rates, licensing and local content restrictions, and so on. And now we are in the early stages of witnessing the impact of the real elephant in the room, turmoil in the Middle East. Oil prices were already consistently rising, even during the recession, but this clearly exacerbates the problem.

What was unthinkable two months ago is now commonplace, added Karrenbauer.

“But what has occurred thus far is a mere stroll in the park when one imagines the impact of major supply disruptions in the Persian Gulf, either in the oil-producing countries themselves or in the transit lanes. Energy prices affect every aspect of the supply chain, from source of raw material acquisition, through manufacturing, to final distribution.”

For related articles, please click here.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Jacksonville, Fla.-based Florida East Coast Railway (FECR), a 351-mile freight rail system on the state’s east coast, recently made two separate announcements. One had to do with an expansion of intermodal services between Charlotte, N.C. and various locations in South Florida and another was related to the company boosting its intermodal capacity through the addition of new equipment.

The International Air Transport Association (IATA) announced August 2014 data for global air freight markets showing continued “robust”growth in air cargo volumes.

Even though some of its key metrics dropped sequentially from August to September, the outlook for manufacturing over all remains strong, according to the most recent edition of the Manufacturing Report on Business issued today by the Institute for Supply Management (ISM).

Company officials said that these planned changes, which will take effect on January 4, 2015, will provide for increases in current pay rates and reduce the time it takes for its nearly 15,000 drivers to reach top pay scale.

While the economy has seen more than its fair share of ups and downs in recent years, 2014 is different in that it could be the best year from an economic output perspective in the last several years. That outlook was offered up by Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics Report at last week’s CSCMP Annual Conference in San Antonio.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA