The natural disasters to have hit internationally in 2017 could have far-reaching ramifications for global supply chains, which are not always immediately apparent, advises emergency logistics expert Evolution Time Critical. The breadth and reach of turbulent factors cannot be accurately forecasted for a number of weeks after initial disturbance, which poses a number of complex challenges that impact recovery time. However, past recovery from natural disaster has led to automotive industry resilience and the ability to minimise potential supply chain and business disruption.
“From a supply chain perspective, the immediate impact of natural disasters isn’t just about damaged infrastructure such as impassable roads, port and airport delays, or closed facilities; a major factor when considering the long-term impact is the lack of visibility as to where and when the aftereffects will be felt,” explains Evolution Time Critical managing director, Brad Brennan. “As a current example, according to figures supplied by Resilinc, 33% of US chemical production was immediately disrupted by Hurricane Harvey and this impacts globally; not immediately as it does regionally, but further down the line at Tier 3 or 4 supplier level and beyond. The issue is that, with so many suppliers and supply chain links involved, it is impossible to quickly and accurately assess which companies will be involved, how shipments will be affected and to whom, and how this will impact vehicle manufacturers – it takes time to consolidate all information and analyse every route throughout complex chains.
“For example, a similar scenario unfolded in 2011 after the devastating Tsunami in Japan,” he continues. “Disturbance to chemical production led to a failure in supply of a rare pigment made by only one company and the subsequent withdrawal of a pearlescent paint that was used by a number of major vehicle manufacturers. However, this impact was not felt for a number of weeks after the initial incident, when paint production eventually became hampered. In this instance, we helped OEMs draw up suitable contingency plans to expedite delivery of alternative supplies where appropriate.
“Evolution Time Critical has the experience and expertise to work closely with vehicle manufacturers and OEMs to analyse complex supply chains, identify potentially volatile areas of concern and map out contingency plans,” says Brennan. “Precise, timely analysis in the aftermath of natural disasters can provide the vital headstart required to successfully safeguard global supply chain links.”
The experience gained in the aftermath of environmental catastrophes in recent years has provided the automotive supply chain with the ability to recover swiftly from any prolonged disturbances in the wake of recent disasters. Suppliers operating with multiple sites are in the position to recover with the least potential discord, aided by the agility provided by a responsive logistics partner.
However, this is no guarantee of unaffected production: “It is important to consider the time and resources that are required to prepare alternative facilities for continued production, and the potential need to fill in widening gaps throughout the supply chain during this time,” explains Brennan. “To help minimise disturbances in the past, emergency logistics has been able to provide a flexible contingency that counters a range of challenges posed by physical damage and logistical delays. Re-routing existing shipments, re-sourcing from alternative sites and reserve stocks, or even moving heavy tooling and live production, can all be suitable alternatives depending on the nuances of individual cases.”