The best way to ensure our health is make sure we have a strong immunity system. Well the same is true of supply chains according to Jim Rice, deputy director for the MIT Center for Transportation and Logistics
“We are seeing a recency bias in which people say we need to prepare for the next pandemic,” says Rice, in an article on MIT News. “But the next big disruption is probably going to be something else. My guess would be a cyberattack, but nobody knows. It does not matter if you lost your factory because of a labor strike or a hurricane. You still need a plan to recreate your core capabilities. Resilience is not mitigation — it is creating the capability to recreate lost capacity.”
The article discusses the issues of labor shortages, transportation issues, multiple sourcing and local production.
Rice advises companies to create business continuity plans to address what he calls the seven core capacities that are typically lost during supply chain disruptions.
- acquiring materials
- moving materials
- converting materials or internal operations
- ensuring the availability of resources
- maintaining sufficient financial assets to fund operations
- providing distribution channels to the customer
- communicating with partners and customers.
Read the full article here.