Managing Supply Chain Disruptions Essay

962 Words 4 Pages
In March 2000, the Phillips Semiconductor plant (Albuquerque, NM) was shut down for six weeks after it was struck by lightning. The plant was responsible for producing electronic components for both Ericcson and Nokia. The six week shutdown led to a shortage of components and according to The Wall Street Journal, “company officials say they [Ericsson] lost at least $400 million in potential revenue” and “when the company revealed the damage from the fire for the first time publicly, its shares tumbled 14% in just hours” (Latour 2001). How is the severity of a supply chain disruption defined? An unplanned event slows down the flow (inbound/outbound) of products. The Phillip Semiconductor plant’s inability to ship conductors reduced …show more content…
According to Tang, these robust strategies must contain two properties. The first property he discusses is for the company to ensure its supply chain can deal with any type of disruption that may occur within the business. The second property is for the company to ensure their strategies make their supply chain more rigid and less susceptible to any type of slowdown in the face of a major disruption (2006). Robust strategies are important to identify when using supply chains. Another important tool for a business is the use of available technology (e.g., internet, communication systems, etc) which allows distributors and manufacturers the ability to perform real-time information swapping and computing. Real-time enterprise is one way to ensure information breakdown is eliminated. Real-time enterprise makes certain that response times are reduced, by communicating with partners or customers. This allows businesses to share information throughout an enterprise, instead of keeping it within a section of the business. Other valuable benefits of Real-time enterprise are the increased communications and reporting that a firm and its supplier are able to put in place. Finally, if properly implemented, real-time enterprise helps reduce cost because the organization is able to maximize its automation and strive for a leaner inventory, which helps negate costly storage.
Managing Supply Chains, Third Party

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