Recent events have caused many companies conducting business internationally to carefully consider and reconsider their supply chains. The extensive flooding in parts of Thailand has had a well-documented effect on the supply of hard disk drives, leading to a worldwide shortage of several devices.
Major computer component manufacturer Seagate has run into problems with building new disk drives because not only was the plant responsible for assembling them flooded, so too was another supplier who built the motors for each drive. Even when the Seagate assembly plant was reopened, the motor manufacturer’s was still underwater. This dual layer of failure has encouraged other businesses to look carefully at their own risk management procedures, going two or three layers down their component suppliers to identify the potential for a similar problem in their own companies.
For those organisations which successfully complete their risk awareness surveys, identification of potential points of failure is only the start of the remedial process. Backup component suppliers need to be sourced for failover in the event of a supply chain disaster, as does the capacity for a change to the business process system which underpins it.
And herein lies another potential pitfall. An in-house maintained system could lack the flexibility required for an emergency transition or workflow alteration leading to additional delays and costs on top of those incurred by the original failure. Again the option of business process outsourcing and hosted supply chain management systems tend to offer a significant benefit over their in-house counterparts.
The cloud-based supply chain management system allows for a ‘pay-as-you-go’ approach, with subscribers paying for exactly what they need, when they need it. Additional functions or capacity can be added or removed centrally as requirements change, allowing for a highly flexible approach to potentially crippling disasters. The promise of flexibility could mean the difference between organisational survival and destruction. Can your current system meet the challenge?