SAAB no more…

saab-move-your-mindWhat do you when your major customer goes bust? How do you cope with finding a new business partner? How do you react when a major competitor is no more? I don’t know, but I guess many businesses catering to SAAB in Trollhättan in Sweden will be asking these questions in the next couple of days. Well, they’ve had a year to prepare for SAAB’s demise. Who would have thought that when GM bought SAAB in 1989, that it would take no more than 20 years for GM to run SAAB into the ground, taking with it 60 years of proud Swedish car manufacturing history. SAAB is history, but what will happen to its supply chain?

My lost SAAB

saab-logoSAAB started production in 1949 and has always been strong on innovation, but 60 years later, on December 18th 2009 SAAB entered the history books when General Motors announced that it will wind-down Saab’s operations on a press release on their website. Sad…and I never got around to buying my own SAAB. I always wanted to have one, but I guess they will be on sale now, won’t they? As it happens, the first car my Dad bought was actually a SAAB 96, in 1966.

Business continuity

black-swan-nassim-taleb
It’s not just SAAB that winds down, it’s also their supply chain and the network of suppliers and sub-suppliers who are wholly dependent on SAAB for their business. Do they have a continuity plan for a case like this? What about the local community and the city of Trollhättan where the plant is located, did they ever foresee this? A true Black Swan Event indeed. This reminds me of my job in the late 80s, when I was working with several regional government agencies in Norway, and where my job was to audit the risk assessment and disaster management plans of the local government authorities. The consequences of the closure of the cornerstone business was one of the scenarios we expected the communities to have plans for, but not on such a grand scale. According to Swedish media, the plant itself employs “only 3200” people, but the ripple-effect criss-crossing the now defunct supply chain will potentially affect  61,000 jobs all over Sweden. And how many jobs overseas? This calls for some serious business continuity plans and some serious resilience plans. Maybe Ken Simpson can help?



Resilient organisations

The New Zealand research project Resilient Organisations is another thing that comes to my mind here. Resilience is here viewed a 3-fold construct, working in a complex, dynamic and interconnected fashion depending on 1) keystone vulnerabilities, criticality and preparedness, 2) situation awareness, stemming from an assessment of the keystone vulnerabilities, and 3) adaptive capacity. Resilience, in essence, is the ability to survive disruptive changes despite severe impact. I can only hope that the businesses affected by SAAB’s demise are resilient enough to be able to survive and bounce back. It will be interesting to see…and it will be a great case study for supply chain risk researchers.

Links

Related

Posted in THIS and THAT
Tags: , , ,

ARTICLES and PAPERS
Six levels of risk management
In spite of all efforts to design safer systems, we still witness severe, large-scale accidents. A b[...]
Supply chain agility - Risk mitigation and response
How does company culture shape a firm's risk mitigation and response, and thus, how does company cul[...]
BOOKS and BOOK CHAPTERS
Book Review: Transportation Security
Instead of Transportation Systems Security, which I reviewed in an earlier post, I should have settl[...]
Risk Management Simplified
Risk management. Why make it difficult when you can make it easy? That is perhaps what Andy Osborne [...]
REPORTS and WHITEPAPERS
Future Value Chain Trends 2020
The twelve future trends that will shape value chains and supply chain management during this decade[...]
Managing supply chain risk
In September and October 2009 the Economist Intelligence Unit surveyed 500 company executives with r[...]