Modern supply chains are highly integrated and are often optimised towards efficiency with any redundancy minimised in order to reduce operating costs. Too often this drive for efficiency introduces vulnerabilities that are only exposed when an upset occurs.
The Thailand floods of 2011 are an example of such an upset. The effects of this event cascaded across the globe as the supply chains of thousands of companies were interrupted. In the electronics sector the effects were particularly notable. Prior to the event Thailand had established a position as the world’s second largest manufacturer of hard disk drives, responsible for an estimated 25 percent of the world’s production. Damage to manufacturing plants directly resulted in global shortage of components which had financial consequences for many leading brands.
We have experience of undertaking supply chain risk assessments that support companies in developing strategies to build and maintain supply chains that are stable, efficient and able to respond quickly in the event of a disruption.
Our approach is based on that recommended by the Supply Chain Risk Leadership Council (SCRLC) which is based on ISO 31000 and covers elements of risk identification, risk assessment, and risk treatment.