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13 Operational Strategies for your Supply Chain By
Sep 17, 2005, 13:20 | Email this article Printer friendly page |
Bernie Hart, global product head of supply chain consulting firm JP Morgan Chase, offers 13 invaluable tips to prepare for the unexpected:
1. Assess risk. In making your initial decisions concerning where to buy product, where to manufacture product, where to have distribution centers, and what ports to use, consider the following items: political, physical, and geographical risks; availability and proximity of primary and alternative logistics networks for all modes (air, ocean, rail, and truck); historic weather/natural disasters; labor union action; infrastructure (power grids and backups, water supply, etc.); economic and market risks; fuel prices; currency exchange rates; and inflation.
2. Establish a team that will be responsible for decision-making during a crisis and make sure that your entire supply chain knows of its existence.
3. Develop and use alternative suppliers and logistics networks. This provides the ability to control costs and service levels in normal times and flexibility during times of high demand or disaster recovery. Have the ability to diversify transportation.
4. Demand disaster plans from your suppliers and logistics providers, then review and update these plans on a regular basis. Test the options presented by your suppliers and logistics providers. By conducting such an audit, you will see their level of preparedness.
5. Detailed processes, procedures, and authorizations should be readily available for dispatch to new brokers who are being used in an emergency as a result of diverted cargo arrivals.
6. Constantly monitor each country/region for threats and trends which will affect your supply chain: weather, port and transportation strikes, fuel prices, labor rates, pending legislation (e.g., trade sanctions, quotas, anti-dumping duties, free trade programs), or political elections that may