Classical facility location models assume that once optimally located and set up, facilities will operate as planned, smoothly, and without interruption. In reality, though, operations seldom go as planned; interruptions, unscheduled downtime and failures occur every once in a while, with unplanned and unbudgeted disruption costs as a consequence.
In regions or countries with sparse transportation networks or few transportation mode choices the structure or design of the supply chain, along with the organization and preparedness become important factors in determining if a company has an favorable or a unfavorable location.
The severity of supply chain disruptions stems from supply chain design characteristics and supply chain mitigation capabilities: Supply Chain Design: supply chain density,supply chain complexity, node criticality. Supply Chain Mitigation Capability: recovery capability, warning capability.
Supply chain disruption – a global issue? All companies and governments dependent on external suppliers are exposed to the risks of disruption in their supply chain. Even a relatively small supply chain disruption caused by a local risk event may ultimately have consequences across the global economic system.
Supply Chain Risk Management (SCRM) has many similarities with Business Continuity Management (BCM). That is why SCRM can and should draw upon BCM for advice. A well-handled supply chain disruption can mean business continuity, while an ill-handled supply chain disruption can mean business dis-continuity.
Supply chain disruptions have occurred as frequently in the past as today, and particular within the military in war times. A supply chain serving a war machine is under extreme strain, but is an essential element in winning or losing not only a battle or two, but an entire war.
How do companies or businesses located in such places adapt to the terms and conditions of their supply chain, how do they hedge against the risk of supply chain disruptions, how are they impacted if there is a disruption?
This is tell-tale illustration of what happens when supply chains are disrupted and businesses are impacted. They may, or may not, be able to bounce back to where they were before the event. The survivability of the company depends solely on the company’s resilience towards the disruption.
Transportation professionals should look into the challenges posed by climate change and incorporate current scientific knowledge into the planning, design, construction, operation, and maintenance of transportation systems.
Excellently written, The Resilient Enterprise: Overcoming Vulnerability for Competitive Advantage does not necessarily provide concrete solutions for your own business, but it showcases how other companies, successfully or not, handled various crisis situations.
A typical supply chain consists of a company with incoming raw materials from an upstream supplier and outgoing products to a downstream customer.
A supply chain is characterized by its locational and organizational design.
There are many potential disruptions to a supply chain.
The potential disruptions may or may not influence locational decisions.
The impact and severity of disruptions depends on both locational vulnerability and organizational adaptability.
