Protean Supply Chains: Ten Dynamics of Supply and Demand Alignment

CHAPTER 7Control Towers

Global supply chains are very vulnerable to breaks. When an undersea earthquake off the coast of Japan triggered a tsunami on March 11, 2011, the surging waters damaged shoreline communities and set off a partial meltdown of a nuclear reactor. As a result of that disaster, many factories in that country were shut down, impacting companies in other parts of the world. The New York Times (March 19, 2011) reported that a General Motors plants in Louisiana had to shut down temporally for lack of parts from Japanese suppliers. Another automobile maker in the United States, Ford Motor Co., reportedly also had problems getting red and black pigments for its vehicles from Japanese suppliers impacted by that disaster. In fact, a 2011 survey of 559 companies in 62 countries by the Zurich Financial Services Group and the U.K. Business Continuity Institute found that 20% of survey respondents were affected by the March 2011 earthquake and tsunami in Japan.

In the same year of 2011, summer monsoon rains produced huge fall floods in Thailand that also had a negative impact on global supply chains. The New York Times (November 6, 2011) reported that more than 1000 factories in Thailand were swamped, impacting the production of computer components and affecting supply chains for computer makers.

Weather-related events play havoc with today's far-flung supply chains that span the globe. The same Zurich Financial and Continuity Institute survey cited earlier found that 51% ...