Friday, April 30, 2010

How Do You Plan For a Volcano?

European supply chain disruptions highlight fragility of global distribution

The volcano in Iceland with the impossible name provided a stark reminder of just how vulnerable global commerce is to unpredictable events. In addition to stranding millions of travelers and causing the airlines billions of dollars in losses, the eruption created chaos in international air freight, leaving companies around the world unable to access needed parts or deliver finished goods.

The joke is that when Iceland’s economy died, its last wish was to scatter its ashes over Europe. With up to 20,000 flights cancelled each day, that ash was the only thing being distributed throughout much of the EEU for one hectic week.

The disruption forced even firms with strong contingency planning to scramble to keep their goods moving in our linked, interdependent business environment, and temporarily made ground shipping the only way to go when a shipment “absolutely, positively” had to get there – eventually.

You never know where the next emergency will come from. While there’s no way to prepare for every possible eventuality, sometimes it pays to shift your supply chain strategy from “just in time” to “just in case.”

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