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Japan and Ecuador Earthquakes Highlight Supply Chain Risks
Another natural disaster brings forth another reminder of the importance of supply chain risk mitigation. This time, two earthquakes on opposite sides of the Pacific Ocean have impacted lives as well as supply chains.
- Toyota announced on Sunday it would suspend production in stages at its plants across Japan.
- Sony Corporation’s production would remain halted at its image sensor plant in Kumamoto as it assesses structural and equipment damage. Meanwhile its Nagasaki and Oita plants which also produce image sensors have resumed operations.
- Renesas Electronics Corp sustained damage to some equipment at its plant in Kumamoto which produces microcontroller chips for automobiles.
- On a regular basis, screen and monitor current and potential suppliers with respect to potential supply chain risks.
- Identify and require critical suppliers to produce a detailed plan of disruption awareness and to identify supply chain risk management capabilities that can be executed when disruptions occur in the supplier’s own supply base.
- Implement a system-wide visibility and supply chain intelligence process that provides real-time or close to real-time data relating to demand, inventory, and capacity levels at key nodes in the supply chain.
- Identify and train key employees and groups to improve real-time decision-making capabilities, and provide them with plans and processes for managing disruptions when they occur.