International Disaster Could Mean Local Disruptions


Planning the most efficient and cost-effective supply chain means assuming a best-case scenario. But what happens when disaster strikes?

The Global Supply Chain: So Very Fragile by Bill Powell

[…] Because of the interconnected nature of supply chains, the economic impact of these disasters will be felt well beyond Asia — and for many months to come. Computer hard-drive maker Seagate (STX), which operates two factories in Thailand, predicts disruptions to its customers (Seagate supplies hard drives to makers of PCs and servers) through 2012, and CEO Stephen J. Luczo says the industry won’t “be back to normal” until 2013. iSuppli, a market research firm, says the computer industry is in need of 175 million hard drives but suppliers can deliver only 125 million units — a shortfall of 29%. Apple (AAPL), Hewlett-Packard, (HPQ) and most recently Intel (INTC) are among the companies that have told investors that the flooding will have an impact on future earnings.

The effects of Mother Nature’s wrath still are being felt in the U.S. Auto assembly workers in Ohio saw their hours cut in November because Honda (HMC) couldn’t get parts from Thailand. (In late November, Honda returned those plants to normal production levels.) On the other hand, a factory in Decherd, Tenn., that normally makes engines for Nissan cars sold only in the U.S. suddenly had to ramp up production after the Japan earthquake; Nissan had the American plant ship engines to Asia for use in cars sold both in Japan and in Southeast Asia. […]

Has your company suffered from a disrupted supply chain? Is it just an inevitable crisis, waiting to happen? Or are there steps you can take to safe guard your business?

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One Response to International Disaster Could Mean Local Disruptions

  1. […] International Disaster Could Mean Local Disruptions Planning the most efficient and cost-effective supply chain means assuming a best-case scenario. But what happens when disaster strikes? The Global Supply Chain: So Very Fragile by Bill Powell […] Because of the interconnected nature of supply chains, the economic impact of these disasters will be felt well beyond Asia — and for many months […] […]

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