Unless you equip your supply chain with resilience you could be labeled as the Grinch who stole someone’s Christmas.The thought of children with no presents and empty stockings may seem extreme, but severe disruptions in supply chain – for whatever reason – could result in just such a situation.
The prospect of a disappointing Christmas arose recently when a large shipping company, Hanjin Shipping Co., suddenly went bankrupt. Around 90 huge container ships were stranded at sea, during the peak pre-Christmas shipping period. These ships were carrying half a million containers of electronics, clothing and furniture worth about $14 billion. Few ports would let them in, as the owners already owed them money, creating logistical problems around the world.
Although Hanjin is scrambling to rectify the problem and some of the ships have docked and unloaded, the situation is worrying for retailers in the run-up to Christmas.
This type of disruptive event can be managed after the fact, but the damage is already largely done. This is why it is important to identify possible disruptive events before they happen; mitigation management is just as important as event management. A platform that does both can ensure that all risks, external, environmental and operational, are always identified and managed or mitigated.
In the case of Hanjin, there had been rumors about its financial instability for some time before the bankruptcy. The issue is that it’s difficult for supply chain managers to act on rumors. It’s even more difficult to ascertain truth from fact in discussions with the vendor. Instead, if a receiving Hanjin shipper or customer received an actionable alert about Hanjin’s financial problems, you could have taken steps to mitigate the potential future risk, such as finding an alternate shipping company, or guaranteeing that critical or time-sensitive inventory such as Christmas stock always leveraged a transportation company with a low risk profile.
The holiday season is usually a merry time for manufacturers, retails and consumers, albeit it for differing reasons. Ensuring your supply chain has visibility to risks, regardless of their origination, and the ability to manage or mitigate those risks will ensure your company will have a merry holiday season as well.