Last week I read a heartfelt note from a CEO who has hundreds of associates working in Ukraine, a very sad and sobering situation. Our thoughts and prayers are with the thousands of people who will be directly impacted by this conflict.
In the logistics community, many are wondering how this will have an impact on already strained supply chains. This week at the Journal of Commerce’s TPM22 conference, which focuses on trans-Pacific and global container shipping, it’s become one of the main conversations.
Right now the situation with Russia and the Ukraine is extremely fluid. In the news we’re seeing companies such as Landstar, Volkswagen and many others report disruptions as they respond to the situation. We’re also watching fuel prices rise along with concerns about the overall impact this will have on inflation.
What we’re witnessing underscores a message you can no longer ignore: Your company needs to make contingency planning a priority. The current geopolitical risk represents an ongoing concern for supply chains. But the impact of increasingly frequent “Black Swan” events also highlights how quickly things can change and the significant impact these changes can have on supply chains.
With that thought in mind, here is an important question to answer: Have your mapped your company’s supply chain and identified the risks and threats that could result in costly disruptions? If not, or if you are wondering how to map your supply chain, we strongly encourage you to check out our interview MIT Professor David Simchi-Levi, who is one of the best at helping companies identify supply chain risk mitigation strategies.
In our interview with David, he shares some valuable insights about things you can do to protect your company’s supply chain and the benefits from mapping your supply chain. For example, when one company mapped their supply chain, they discovered that a ten cent ($.10) part could shut their production down. Because it was such a low cost part, the annual spend didn’t compare to more costly parts and it was overlooked. Since this part was extremely important though, the company needed to significantly boost its inventory levels.
We know you’re busy, and if you only have a few minutes today then listen to a snippet from the interview here where he explains supply chain resiliency and its impact on your company.
After listening to this, if you have questions about mapping your supply chain or how to create your supply chain contingency plan, give us a call and let’s get in touch. Our team has a wealth of experience and expertise that can support you and your team in protecting your supply chain.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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