18 March 2014 | David Maund
Proactively planning for a natural disaster is a must for all supply chain and procurement-driven organisations. The recent floods in southern England are a reminder that while we can’t prevent these unplanned events, we can control our responses to them.
While damage to large-scale industry in the south was thankfully minimal, one can’t help but wonder - what if the recent floods had been more widespread where the majority of the UK’s automotive industry is located?
According to the Society of Motor Manufacturers and Traders, more than 2.5 million engines and 1.5 million vehicles are produced in the UK each year and the UK automotive supply chain generates £4.8 billion of added value annually. Given these stats, a natural disaster in this region would have held dire consequences for the global automotive industry.
The best way to safeguard your trading network from environmental disruption is by actively collaborating with your suppliers, distributors and overall supply chain. Speed is of the essence, as decisions need to be made quickly, and having multi-tier visibility into both your areas of weakness and your suppliers’ potential problem areas shapes the most effective response.
Collaborating with your partners provides visibility into inventory levels, parts, capacity, availability and alternate sources, as well as being a mechanism for group problem solving. Using this functionality as a starting point, brand owners are able to access and share real-time information with their trading partners, enabling them to adjust plans as exceptions or disruptions arise.
The ability to both access and view information from every part of the trading network in real-time is critical for business continuity. Identifying disruptions as they occur and, ultimately, devising a range of options in order to resolve them is key.
Thus, the best tips to safeguard your supply chain in the wake of a natural disaster are:
• Ensure you have visibility into all aspects of your trading network before disaster strikes and proactively identify potential sources of risk in your extended supply chain, including supply, geopolitical, inventory, operational, financial and revenue risks.
• Institutionalise business continuity management best practices at your organisation. This includes developing and regularly updating a disaster response plan with key supply chain stakeholders within your business and trading network.
• Know the questions that will need to be answered if a disruption occurs. Typical queries may include: Who is involved in this supply chain issue? What is the impact on our revenue? What is the impact on our costs? What is the impact on our supplier relationships? What is the impact on customer satisfaction?
With this collaborative framework in place, your business and its trading partners are poised to address any curveball that Mother Nature throws your way, armed with the ability to expediently tackle these challenges with real-time information.
☛ David Maund is vice president, professional services, EMEA at E2open