How to mitigate Supply Chain Risk: GM halts production at 4 plants due to earthquakes in Japan
Jan-Willem Adrian
Executive Director Supply Chain & Logistics at NEOM - Global Supply Chain Innovator | Expert in Strategic Growth and Technological Integration | Committed to Excellence & Sustainability | Digital transformation
"General Motors temporarily closes four North American plants in response to supply chain disruptions caused by earthquakes in Japan."
These type of events seem to happen more and more. With supply chains spanning increasingly more and more partners, suppliers and locations, so too do the critical interdependencies and complexities between them. A breakdown or disruption in any part of the supply chain connecting these entities can potentially lead to catastrophic consequences on the overall chain. Effective supply-chain risk management is therefore essential to a successful business.
So what can we do about minimizing the risk?
Companies need to create real-time supply chain visibility both upstream and downstream. Even though companies spread their risks by having multiple suppliers for the same parts, it could well be that down the chain they are relying on one single tier 2 or tier 3 supplier. Therefore, including not only the tier 1 suppliers, but also the tier 2 and even tier 3 suppliers would allow companies to quickly identify bottlenecks and dangers in their supply chain.
Having this visibility in real-time would allow companies to be alerted when events happen that have impacted or will impact the supply chain. This means that we can be more pro-active instead of reactive. With only relevant alerts pushed to the users, they can focus only on the events where they will have to make a decision or take an action.
In addition, once there is an alert of a (potential) disruption in the chain, companies need to be able to immediately simulate different scenarios for mitigating the risks/ the impact of the event. Having the right tools already in place that calculate the end-to-end impact, allow for collaboratively analyses of the root cause and impact, and simulate different scenarios to minimize the disruption, can help companies to have a competitive advantage over the competition.
Having the right technology in place will make your overall supply-chain risk-management program more resilient and you will be prepared for the day when a disruptive event occurs.
Source: GM halts production for two weeks