When the 8.9 magnitude earthquake and resulting tsunami hit Japan in March 2011, initial concerns and the world’s focus were on the people of Japan. As the weeks progressed, it started to become clear in just how many ways we are all connected and that the entire world was affected by this event.
Interdependent Supply Chains in News:
These are just a sampling of the headlines and paraphrased news stories in the weeks that followed:
Wall Street Journal:
“Quake Disrupts Key Supply Chains.” Dozens of semiconductor factories had their operations affected by the earthquake, raising fears of shortages or price increases for a number of widely used components…other manufacturers are likely to be affected by disruptions of transportation of finished goods to airports or ports as well as the movement of employees and supplies to production plants.
“Multinationals Warn over Japanese Supplies.” Multinational companies in several sectors are warning of supply chain disruptions after the earthquake, tsunami, and nuclear crisis in Japan….General Motors became the first international group to announce a direct impact on production after the disasters…. Sony Ericsson, a smartphone joint venture between the two companies, said its supply chain would be affected, and German car maker Volkswagen warned of a possible medium-term components shortage.
JP Morgan Insights newsletter Asia:
The Impact from the Earthquake in Japan.” It is believed that the adverse impact of the Japanese earthquake on Asia is primarily via a supply chain disruption due to reduced exports from Japan given the interruption in power supply, factory closures, and logistical hallenges.
Los Angeles Tunes:
“Disaster Puts Kink in World Supply Chain.” Concerns are growing that the earthquake and tsunami could lead to a long-term disruption in the world’s supply of automobiles, consumer electronics, and machine tools.
Connecting Supply Chains:
As millions of people around the globe extended their condolences to the people of Japan for the lives lost and suffering, companies around the globe had to quickly assess whether their business would be impacted by this tragedy thousands of miles away in many instances, those firms were not happy to learn how their supply chains would indeed be affected by such an unpredictable natural catastrophe, as could be researched, and learned through interactive lecture explaining what is supply chain management or what is logistics.
Even after major disasters like Japan’s recent earthquake, the World Trade Center attacks of September 11, 2001, in New York, the U.S. recession that was felt worldwide in 2009 to 2010, and the volcanic eruption in Iceland in April 2010, when aviation authorities closed the country’s airspace due to a cloud of drifting ash, some companies are hesitant to realize that with the global economy, actions in one part of the world, whether planned, unplanned, human-induced, or naturally occurring, seem to affect us. We are all connected.
That level of connectedness is impacting supply chain management and causing it to evolve into a more strategic role. Managers now recognize that the actions taken by one organization in the supply chain can influence the success of the rest of the network. While in the past the strategic focus for many organizations was on improving their internal quality and reducing costs, the new focus is on implementing total supply chain solutions that require collaboration from partner organizations both upstream and downstream.
These new global forces are being met by corresponding technological solutions in supply chains in most nations. Collectively they are revolutionizing supply chain management.
Factors Effecting Interdependent Supply Chains:
We want you to be prepared and ready to handle the new powerful forces that will impact virtually every supply chain:
The globalization of sourcing and manufacturing is making supply chain s longer and more complex than ever before, thereby requiring more formal coordination and collaboration. Also, many manufacturers and retail chains have expanded both nationally and globally, creating the need for more formal mechanisms to coordinate supply chain activities. In addition, the firms that have created their own e-commerce sites can now have, or at least claim to have, global exposure.
Increased project complexity and scope:
Project size and complexity are increasing. Projects involve, in some cases, large teams operating at different remote sites. Moreover, the information involved is more important than ever, in larger amounts than ever, and more difficult than ever to manage manually with the required speed and accuracy.
Greater market volatility.
Demand is becoming more volatile and harder to predict due to the increasing power and speed of information available to both consumers and competitors.
Our goal is to prepare you to grasp these concepts, be confident in your actions, and eventually thrive in the world of supply chain management through one of the top supply chain certification. Remember that “the beginning of knowledge is the discovery of something we do not understand” (Frank Herbert, science fiction author and writer, 1920-1986).