Securing the supply chain is a constant challenge

“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.
image
By Patrick Burnson, Executive Editor
March 01, 2011 - SCMR Editorial

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 Supply Chain Management Review 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 SCMR 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 more stories on Supply Chain Management 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

Flags of Convenience are a fact of life in the commercial maritime trade, but several European political action groups are worried that they will pose a threat to the Continent’s air cargo industry.

For May, which is the most recent month for which data is available, the SCI is -7.5, following April’s -7.5. FTR said this reading represents a still-tight capacity environment, as utilization rates hover between 98 percent and 99 percent.

With a 1.1 cent drop to $3.858 per gallon, this follows declines of 2.5 cents, 1.9 cents, and 0.7 cents over the previous three weeks, with the cumulative four-week decline at 6.2 cents.

Second quarter revenue for transportation and logistics titan UPS headed up 5.6 percent annually at $14.3 billion, while operating profit sank 57.1 percent to $747 million. Quarterly net income fell 57.6 percent to $454 million.

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, recently said it is opening up the “vault,” so to speak. The vault in this case is making its copious amount of trade data accessible through an Application Programming Interface (API), which enables customers to extract Panjiva’s trade data into their own database.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

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