Shipping companies are now seriously considering avoiding the Suez Canal and take the long route around Africa instead. One Norwegian shipping company, Odfjell, has already started sending their tankers on the long route.
Shipping companies are now seriously considering avoiding the Suez Canal and take the long route around Africa instead. The Norwegian newspaper Dagbladet reports that such move could endanger this year’s Christmas, with presumed presents not arriving on time to be sold from stores.
In my postings on supply chain risk and supply chain disruption, there is one thing that I have overlooked: Business Intelligence. Well, not overlooked, maybe, but underestimated, because Business Intelligence is a key component in mitigating supply chain risk and also a key component in recovering critical information after a supply chain disruption.
Are you presenting at the TRB 2009, the Transportation Research Board Annual Meeting? Below is the abstract of a paper I will present at TRB2009, the Transportation Research Board 88th Annual Meeting, in Washington, DC, 11-15 January 2009.
“Supply Chain Risk – the dark side of supply chain management” is a guest lecture I recently gave at Molde University College in Molde, Norway. Hopefully it can be of use to both students at practioners alike.
Sparse transportation networks, like in Norway, are a recipe for supply chain disruptions. Furthermore, unlike in regions with a dense transportation network, supply chain management in a sparse network setting comes close to being business continuity management.
When Manuj and Mentzer (2008) wrote their article titled Global Supply Chain Risk Management, they used Ghoshal (1987) Global Strategy: An Organizing Framework for developing sources of risk and Jüttner, Peck and Christopher (2003) Supply Chain Risk Management: Outlining an Agenda for Future Research for developing risk mitigation strategies.
In my post two days ago, reviewing the article by Manuj and Mentzer (2008) titled Global Supply Chain Risk Management, I mentioned that they cited a paper by Ghoshal (1987) titled Global Strategy: An Organizing Framework as one of their references for listing risk management strategies. Today, I will take a closer look at that paper.
Finally it appears that someone has developed an easy, hands-on, not-so-academic and straightforward approach to global supply chain risk management. When I say finally, it is because it is not often that I come across papers that have fully grasped the concept of supply chain risk management and made it look so easy at the same time.
The BBC news this morning ran an interesting and worrying story: Shipping companies are considering to avoid The Somali coast and Suez canal on their way to Europe and rather take the long route around Africa. That will make for an extra lead time of 3-4 weeks, but this could mean a temporary supply chain disruption for Europe, while the new lead times settle in.
In Chopra and Sodhi (2004) ‘Managing Risk to Avoid Supply-Chain Breakdown’ the first key message is that some mitigation strategies may actually increase risk in some business areas, rather than reduce it.The second key message is that the cost of mitigating or building up a reserve must be balanced against the level of risk.
When faced with a supply chain disruption, proactive and reactive supply chain risk management can in fact make or break a company’s existence.
Dette er et foredrag jeg holdt på Konferansen Transport og Logistikk 2008, på Gardermoen, 15.oktober 2008. Foredraget “Risikohåndtering i forsyningskjeder” var en del av programmet omkring Logistikkutfordringer. Dette var første gang jeg foredrog om supply chain risk på norsk
It is now frightening to see how true the predictions in this report were in Global Risks 2008, a report prepared by the World Economic Forum. I can only hope that the global financial turmoil does not translate into a global supply chain turmoil.
The vulnerability of the transportation network as part of the supply chain is of particular interest in countries or regions with sparsely populated areas, and hence, a sparse transportation network, because sparse transportation networks, and thus sparse supply chains, are vulnerable to many different kinds of internal and external risks.
The graphical model uses a Bayesian Network to determine the accumulated probability of failure in supply networks. The Bayesian network captures common causal relations of risk events in a supply chain. It is not complete and is not constructed by a proper risk assessment of a special company.
In her article Drivers of supply chain vulnerability: an integrated framework, Helen Peck identifies four drivers of supply chain vulnerability:Value stream, product or processes,Assets and infrastructure dependencies,Organizations and inter-organizational networks,The Environment.
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.
Supply chain management used to be relegated to the logistics department of businesses and hardly thought of as matters concerning the top-level management. In his 2004 paper, Joseph L. Cavinato points out five sub-networs within the supply chain that need special attention:Physical – the actual movement of goods, shipping and warehousing
Finance, Information, Relations, Innovation.
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.
