Preparing Your Supply Chain For Major Disruption Events - The Case for Doing a Supply Chain Assessment and Continuity Plan
How to Assess Your Supply Chain Risk, Prepare for Disruption Events, and Steps to Bulletproof & De-Risk Your Supply Chain
March 2020
Overview
The Rise of Interconnected Supply Chain Risk
With globalization and interconnectedness of supply chains comes an increase of companies’ exposure to disruption events, both natural and man-made. These events include natural disasters, political unrest, pandemics, vendor/supplier issues, trade wars, port closures, etc.
Recent pandemic disruption events remind us how interconnected our supply chains are, and to remind us that companies need a compelling supply chain disruption and business continuity planning strategy to mitigate their supply chain risk.
The following anecdotes show how exposed companies are to supply chain disruption events:
Up to 60-70% of inventory for retailers such as Best Buy, Michaels and Wayfair comes from China which has the potential to cause major supply chain shortages and disruptions according to nbcnews.com.
China produces and exports a large amount of pharmaceuticals to the U.S., including 97 percent of all antibiotics and 80 percent of the active ingredients used to make many U.S. drugs according to the Council on Foreign Relations.
P&G Says 17,600 Products Could Be Affected By Coronavirus In China, Highlighting Supply Chain Risk according to Forbes.com.
Retailers like Walmart and Target may run out of replenishment products within 60-to-90 days (by April 2020) if disruptions continue beyond the next few weeks according to Wells Fargo.