Supply Chain Risk Management Blog

Major business interruption events challenge the robustness of global supply chains

2010 – a year of surprises? Or was it all pretty predictable?

2010 started uncomfortably for certain organisations with freezing Eurostar trains stuck in the Channel Tunnel and the threat of Pandemic flu still just lurking just over the horizon. April brought disruption for many more companies with the volcanic ash cloud casting an impenetrable shadow over the movement of goods and people in Europe. Car production lines came to a standstill when critical components were failing to arrive ‘just-in-time’.

Such headline grabbing events are always followed with the inevitable probing questions:
• Should these organisations have been better prepared for such eventualities?
• Where were their contingency plans?

The defence is invariably that “these acts of God were unforeseeable”. Is that acceptable in the current age of “if it can go wrong, it will”? After all, we live in a world that does not tolerate disruption – there’s no room for slippage in our modern, just- in-time existences.

This provided a topic for discussion on Radio 4’s ‘The Bottom Line’ a couple of weeks ago. Their general conclusion seemed to be plan for the ‘FORSEEABLE’ (aka freezing trains), but don’t waste your time planning for the UNFORSEEABLE (aka Ash clouds). If you don’t respond well to the Forseeable then you look silly – the Unforseeable you can get away with.

Well, there is a parallel argument that goes something along the lines of ‘plan for the effect rather than the cause‘. There is no point in trying to plan for every single unforseeable scenario (cause), but there is a great deal of value in planning for the impact of the unknown threat ( the effect). Analysing the impact focuses risk mitigating actions on the most exposed areas.

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