Somehow, that title seems a little off. How do global logistics professionals plan for things that are not certain? The earthquakes and tsunami in Japan have taught us many lessons. Now government upheavals and civil unrest in the middle east continue to disrupt many commercial pathways. You need certainty to anchor the start of the planning for any logistical supply chain, right? Let us call it “contingency planning” and start learning everything we possibly can.
Barry Hochfelder from Supply Chain and Demand writes: Unfortunately, planning for uncertainty is easier said than done. In fact, it's not done enough, says Jeff Karrenbauer, president of INSIGHT, Inc. in Manassas, Va. “Firms have a tendency to put off contingency planning until the next crisis hits," he says. "Well, guess what? They need wait no longer. The future is now."
Does anyone plan? "Some do, most don't," says Johan Selle, director of the business resiliency practice for iJet, a provider of enterprise risk management technology and integrated crisis response services based in Annapolis, Md. "Cisco, for example, has some really robust procedures. They very swiftly made the right decisions. Procter & Gamble, when they shut down in Egypt, were ready to move elsewhere.
Does anyone plan? "Some do, most don't," says Johan Selle, director of the business resiliency practice for iJet, a provider of enterprise risk management technology and integrated crisis response services based in Annapolis, Md. "Cisco, for example, has some really robust procedures. They very swiftly made the right decisions. Procter & Gamble, when they shut down in Egypt, were ready to move elsewhere.
According to a report from Drewry Supply Chain Advisors, European container imports from Asia are particularly reliant on the Suez Canal, with as many as 14.2 million teu (twenty-foot equivalent units, a 20-foot-long intermodal container) being carried through the Suez.
What would happen if the passage through the Suez was cut off?
"That's even more nuanced than the press covered," says Gene Tanski, CEO of Demand Foresight, in Golden, Colo. "It doesn't preclude availability. They could go around Africa. It would be a six- or seven-day trip. They'd take a one-time hit and it would have driven up the shipping rate. If they'd gone around Africa, the trip would be riskier and prices would have gone up."
The Suez Canal remains open, but, says iJet's Selle, there's a definite ripple effect. "One of the things I saw in Egypt was the interconnectivity of things," he says. "For example, they instituted curfews. Fair enough. But people weren't getting to the worksite as early as they normally do. Instead of 7 a.m., it's 8 or 9. And to be off the streets by a 3 p.m. curfew, they have to leave work at 2. The curfew threw a curve ball.
"The government changed in Tunisia and Egypt," Selle says. He points out that companies typically move into a market with the thought of setting up an infrastructure with good contacts within the government. Suddenly those contacts may not be available anymore, changing your support network.
"What we try to do," Selle continues, "is work with our clients, get relevant information like port closures, protests, upheaval, airport closings. We analyze the situation for our clients and get them information so they can make well-informed risk decisions."
BravoSolution's Martyn advises a strategic approach. "From a purchasing and procurement view, you want to investigate even your suppliers' suppliers. You have to understand multiple levels of your supply chain."
Insight's Karrenbauer advises, “companies must conduct various scenarios and develop contingency plans for each one, creating a strategic supply chain that serves as a cornerstone for a comprehensive business continuity plan.”
You can do this!
K. B. Elliott is a freelance writer for LogisticsJobSite.com. Working various logistical positions in the Detroit area for over 30 years gives him a unique perspective on the process. More of his blogs are at LogisticsJobSiteblog.com, and be sure to check out the postings for jobs in nearly any industry at Nexxt.
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