Resilient Supply Chain
Resilient Supply Chain
Introduction
In the recent years many disasters and catastrophic events such as hurricane Mitch, tsunamis, SARS, terrorist attacks and earthquakes have shown that we live in world with increasing uncertainty. These events can cause major disruptions in the supply chain. Although similar events have occurred, since the terrorist attacks of September 11 of 2001 the firms began to reassess the benefits of commonly accepted strategies for sourcing, transportation, demand, planning and managements in a stable environment (Martha and Subbakrisha 2003).
In a competitive environment many firms have developed global supply chains which are complex to manage and vulnerable to disruptions. The literature has documented many cases of what can possible go wrong in this supply chains due to unexpected events and what can we learn. For example, Ericsson lost 400 millions euros and the dominant position in the mobile phone market because the managers misestimated the consequences of a fire suffer by their semiconductor supplier’s plant in Albuquerque (Chopra & Sodhi (2004, Rice and Caniato (2003). Norman and Jansson (2004) follow up this case and show how Ericsson implemented proactive supply risk management.
Supply chain disruptions can potential compromise facilities, equipment and human resources and the value of stock market shares. Consequently, some studies have quantified the repercussions both in the short and the long run of disruptions in the supply chain. For example, Rice and Caniato (2003) present the results from a company survey that estimates a $50 million to $100 million cost impact for each day its supply network was disrupted. Hendricks and Singhal (2005) analyze the stock market reaction when firms publicly announce they are experiencing disruption during 1989–2000. On a sample of 827 the authors find that one year before through two years after the disruption announcement date, the mean abnormal return of their sample firms
Introduction
In the recent years many disasters and catastrophic events such as hurricane Mitch, tsunamis, SARS, terrorist attacks and earthquakes have shown that we live in world with increasing uncertainty. These events can cause major disruptions in the supply chain. Although similar events have occurred, since the terrorist attacks of September 11 of 2001 the firms began to reassess the benefits of commonly accepted strategies for sourcing, transportation, demand, planning and managements in a stable environment (Martha and Subbakrisha 2003).
In a competitive environment many firms have developed global supply chains which are complex to manage and vulnerable to disruptions. The literature has documented many cases of what can possible go wrong in this supply chains due to unexpected events and what can we learn. For example, Ericsson lost 400 millions euros and the dominant position in the mobile phone market because the managers misestimated the consequences of a fire suffer by their semiconductor supplier’s plant in Albuquerque (Chopra & Sodhi (2004, Rice and Caniato (2003). Norman and Jansson (2004) follow up this case and show how Ericsson implemented proactive supply risk management.
Supply chain disruptions can potential compromise facilities, equipment and human resources and the value of stock market shares. Consequently, some studies have quantified the repercussions both in the short and the long run of disruptions in the supply chain. For example, Rice and Caniato (2003) present the results from a company survey that estimates a $50 million to $100 million cost impact for each day its supply network was disrupted. Hendricks and Singhal (2005) analyze the stock market reaction when firms publicly announce they are experiencing disruption during 1989–2000. On a sample of 827 the authors find that one year before through two years after the disruption announcement date, the mean abnormal return of their sample firms
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