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Tech Companies Face Supply Chain Risk as Typhoon Soudelor Strikes Taiwan, Soon China

August 8, 2015 Posted by Eventwatch, Supply Chain Event Monitoring, Supply Chain Visibility 0 thoughts on “Tech Companies Face Supply Chain Risk as Typhoon Soudelor Strikes Taiwan, Soon China”

Author: Natalia Kosk

Typhoon_Soudelor_-_GDACSTyphoon Soudelor hit Taiwan on Saturday at 5 a.m. local time, according to The Weather Channel LLC.1 The storm moved across Taiwan, before moving on to mainland China.2

More than 35,000 military officials were deployed to help relocate those in vulnerable areas to Typhoon Soudelor.3 Thousands have also been evacuated from their homes. Numerous businesses, especially those in the tech industry, utilized risk prevention measures to ensure their supply chains faced as little impact as possible. At this time, damage is still being assessed but four million Taipower customers suffered power outages, a record number of outages previously held by Typhoon Herb, which left 2.79 million powerless in 1996.4

Typhoon Soudelor’s heavy rains of more than 50 inches and major winds caused the highest potential for flooding, mudslides and other damage, already causing a landslide in at least one area of Taiwan, according to BBC.

Home to hundreds of businesses and heralded for its booming tech industry, Taiwan ranks as one of the biggest producers of PC, LCD, semiconductor, and chip technology. In fact, three of the largest semiconductor suppliers in the world are based in Taiwan, with the Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) ranking in the No. 3 spot in 2015, according to a report from IC Insights.5

Numerous other tech companies in the Information and Communications Technology (ICT) space also reside in Taiwan. With ICT such a large revenue generator of Taiwan,6 supply chain risk is perhaps most relevant for suppliers and manufacturers in this space as a result of Typhoon Soudelor.

To proactively prepare against disruptions to a company’s supply chain, such as factory fires, floods, other natural disasters or labor issues, businesses can analyze supply chain risks before they occur through global supply chain event monitoring.

By utilizing solutions that monitor events posing potential supply chain risks before they happen, tech companies, for example, may not only better ward off scenarios such as that created by Typhoon Soudelor's ongoing damage, but also ensure an effective, real-time response plan.

Risks affecting tech companies may include:

  • Multi-tier supply chain service disruptions—Not only do tech companies’ direct suppliers based in Taiwan face risks if impacted by Typhoon Soudelor, but so do any of their supply chain’s sub-tier suppliers, sub-contractors, and manufacturers located in the region. Without proper supply chain visibility and supply chain mapping, determining which companies’ sites and parts that will be impacted could require wasted hours or days of research. To address risks before they occur, tech companies should consider utilizing virtual war room functionality to ensure complete supply chain visibility and better analyze each supplier’s potential disruptions based on location.
  • Potential for major supply chain bottlenecks—In the case of a disruptive event such as what we are beginning to see in the aftermath of Typhoon Soudelor, according to Bindiya Vakil, CEO of Resilinc, “Disruptive events can often create major supply chain bottlenecks which can cause widespread profit leakages for customers as inventory dries up and capacity shortages result in higher raw material prices. In these highly disruption allocation situations [such as what we might see with Typhoon Soudelor], no one in the supply chain can get adequate supply of the necessary raw materials or parts.” Especially in the high tech industry and with Taiwan’s high concentration of semiconductor fabs, competing with other companies for scarce resources is a likely outcome. Using a 24/7 global event monitoring service could be the edge a company needs to react quickly and decisively, leveraging real-time event detection and impact analysis. When hooked up to virtual war room functionality, this supports rapid mobilization of focused and coordinated crises response and recovery strategies and playbooks.
  • Reputational risk—How a business mitigates risk and accounts for the actions taken by all parties within their multi-tier supply chain is critical to their brand and corporate profile. Hurricanes and typhoons are a large element of understanding that risk and how to account for it, as such natural disasters continue to rank in the top three types of supply chain disruptions. A sign that more businesses continue to understand the relevance of this is through the growth of Corporate Social Responsibility (CSR) reporting. A few of the measures businesses can take to ensure complete accountability of their supply chain can include using the right tools to address suppliers located in high-risk areas or collect information about suppliers to ensure they provide the necessary service a business needs.

Proactively planning for risks can help companies’ better position themselves as leaders in ensuring complete supply chain visibility. The right solutions can help companies with multi-tier supply chains understand how supply chain risks impact not only their sites but product and revenue levels as well.

Resilinc EventWatch is actively monitoring the situation and providing live updates to EventWatch subscribers, as more reports come in about the impact to Taiwan and makes landfall in China. Click below to learn more about the premiere supply chain event monitoring service.

Learn More About Resilinc EventWatch

 

Resources

  1. The Weather Channel LLC . Typhoon Soudelor Makes Landfall in Taiwan; 145-MPH Gust In Japan's Ryukyu Islands; More Than 4 Feet of Rain in Taiwan"
  2. BBC. "Deadly Typhoon Soudelor Batters Taiwan"
  3. CNN. "Powerful Typhoon Soudelor Slams Into Taiwa "Typhoon Soudelor Impacts: At Least 6 Killed In Taiwan; Evacuations Ordered in China; Record-Breaking Power Outages Recorded"
  4. The Weather Channel LLC. "Typhoon Soudelor Recap: 145-MPH Gust In Japan's Ryukyu Islands; More Than 50 Inches of Rain in Taiwan"
  5. IC Insights. "Six Top 20 1Q15 Semiconductor Suppliers Show >20% Growth"
  6. Forbes. "Taiwan's Technology Industry Marks Global Success"

Hurricane Patricia Marks the First Supply Chain Event Definitively Connected to El Niño

June 12, 2018 Posted by Uncategorized 0 thoughts on “Hurricane Patricia Marks the First Supply Chain Event Definitively Connected to El Niño”

Hurricane Patricia Marks the First Supply Chain Event Definitively Connected to El Niño

Resilinc Impact Assessment and Analysis White Paper Provides CPOs and Supply Chain Leaders with Strategies to Mitigate Future El Niño–Related Supply Chain Risks Proactively

Milpitas, CA – October 26, 2015. Hurricane Patricia – the strongest hurricane ever recorded in the western hemisphere – made landfall on the Pacific coast of Mexico on Friday, October 23rd around 6:15 p.m. local time. The supply chain impact, while still being assessed, clearly can be characterized as minor, especially when compared to relatively recent historic extreme weather events such as Hurricane’s Katrina and Sandy and other “acts of god’ such as the Japan Earthquake and Tsunami and the Thailand floods of 2011. It is nevertheless significant as it represents the first weather event with the potential to impact supply chains that can be definitively linked to the El Niño weather pattern.

Several events running up to Patricia have been postulated to be linked to El Niño. These include Typhoon Soudelor (August), Hurricane Etau in Japan (September), Typhoon Dujuan in Taiwan and Eastern China (September), and even the air quality crisis in Singapore and Malaysia (September) caused by Indonesia forest fires associated with El Niño induced drought conditions. However, based on the consensus of scientists and climatologists (including those at NASA and Stanford University), the connection between Hurricane Patricia and El Niño is not in the realm of conjecture, but rather reality.

Resilinc, the leading cloud technology provider of supply chain risk management intelligence and analytics, has been warning its clients and the broader supply chain management professional community for months to take proactive mitigation actions in preparation for the impending El Niño. In a recent impact analysis white paper entitled El Niño: A Test of CPO Leadership and Your Supply Chain Resiliency Culture, Resilinc argues that El Niño is unique in that it is perhaps the only supply chain disruption phenomenon in which the general timing and geographic location of the potential impact is known well in advance, providing a unique opportunity to plan and prepare. It concludes that if executive leadership is blindsided by El Niño, they have no one else to blame but themselves.

The good news says Wayne Caccamo, Chief Marketing Officer at Resilinc, is that it’s not too late to get started. “We are only in the first inning of a nine inning ball game,” said Caccamo. “There is no more time to waste, but it is not too late to identify your areas of geographic exposure to El Nino driven extreme drought and precipitation conditions. The next step is to map suppliers, sites and parts at risk, and then proactively quantify and prioritize mitigation opportunities based on revenue-at-risk.”

Although fears of a major catastrophe did not materialize, as there were no immediate reports of any deaths or damages to major infrastructure, the potential for supply chain impact from Hurricane Patricia for companies with significant supplier exposure in the western coast of Mexico (specifically the states of Nayarit, Colima and Jalisco), was daunting. hurricane-patricia-factory-sitesThe Pacific coast of Mexico is home to numerous automotive, high tech, life sciences, and other industrial manufacturing facilities, as well as port and freight operations. Key companies in the region include Flextronics, America Movil, Mexichem, Grupo Mexico, Pacific Coast Energy and Minerals LLC, and Ciudad Industrial Morelia. But, in the end supply chain impact appears limited to minor work operation disruptions from localized wind damage, floods, and mudslides impeding workforce transportation and the flow of goods in-and-out of southwestern Mexico.

According to experts, the favorable outcome can be attributed to two factors: preparation and luck. As reported in the Sunday New York Times (“Mexico Exhales after Surviving a Giant Storm,” by Azam Ahmed and Paulina Villegas, October 15, 2015), the Mexican authorities learned some hard lessons from inadequate responses to earlier responses. Mexico now has a national emergency response system that coordinates with authorities at the local level. Federal and local officials were effective in proactively moving people out of harm’s way, and after the storm responded quickly to clear roadways and begin to restore power and communication lines. Despite the effective planning, the impact still had the potential to be devastating if not for a lucky break. The path of the storm passed between two major cities, Puerto Vallarta and Manzanillo, but hit neither directly. It then quickly dissipated 12 hours after touching ground when it veered into a mountainous region.

“The key take-away from the Hurricane Patria experience,” said Caccamo, “is that luck, or hope if you prefer, is not a strategy. Enterprises should follow the lead of the Mexican government and invest in proactive risk mitigation plans and post-event emergency response preparedness. Hurricane Patricia represents perhaps your final wake-up call.” He continued, “For those who prepare, global supply chain disruption events are viewed not as threats but as opportunities to gain competitive advantage.”

About Resilinc

Resilinc is the leading cloud provider of supply chain resilience and risk management intelligence and analytics. Industry leaders like Amgen, GM, and EMC rely on Resilinc to mitigate risks end-to-end, while achieving long-term competitive advantage, and building brand and shareholder value. Resilinc’s flagship SCRM solution platform and services deliver the fastest time-to-value and the lowest resource Impact. It accomplishes this by providing the world’s largest repository of supplier and part intelligence leveraging the power of our “LinkedIn” supplier community; the most robust set of dashboard visualization and patent-pending analytic functionality for proactive planning and risk quantification; and the only solution that personalizes your impact analysis by automatically connecting incidents with your supply chain map so you don’t have to.

Media Contact:

Marc Gendron
MarComm PR
559-824-8360
marcg@marcommpr.com

Resilinc Publishes 2015 EventWatch® Supply Chain Disruption Annual Report

June 12, 2018 Posted by Uncategorized 0 thoughts on “Resilinc Publishes 2015 EventWatch® Supply Chain Disruption Annual Report”

Resilinc Publishes 2015 EventWatch® Supply Chain Disruption Annual Report

Report Names the EventWatch Top 5™ Supply Chain Events of 2015

Milpitas, CA – February 2, 2016. Resilinc released online today its 2015 supply chain events annual report which summarizes and analyzes nearly 750 unique supply chain notifications and alerts generated by its EventWatch® 24X7 global event monitoring, alert, and analysis service.

Supply chain risk management practitioners subscribe to the EventWatch service to receive early warnings and analysis of supply chain incidents that can negatively impact revenue, market share, customer satisfaction, and shareholder value. EventWatch is the only service of its kind that personalizes the EventWatch client’s potential impact at the supplier site and part levels to quantify the potential revenue at risk.

The annual report analyzed incidents by risk type, industry, geography, severity, and seasonality and compared 2015 data in these categories with 2013 and 2014.

“2015 saw a high level of disruptive supply chain event activity as several significant events occurred throughout the year, from the major explosions at the Port of Tianjin last summer to numerous chart-topping typhoons in the critical Asia-Pacific region,” said Neil Shenoi, Resilinc EventWatch Program Analyst. “The arrival of El Niño in the latter half of 2015 spiked erratic and disruptive weather events which impacted global supply chains.”

The report also reveals The EventWatch Top 5™ supply chain events of 2015. The top 5 event ranking is driven by estimated aggregate revenue impact. This was calculated leveraging Resilinc’s database of over 80,000 suppliers and approximately 1.5 million parts which are tracked in its cloud supplier intelligence repository.

The top 5 events were (1) Typhoon Soudelor and (2) Typhoon Dujuan which both hit Taiwan, China and the Philippines, (3) Tianjin explosions at the Port of Tianjin, China, (4) Typhoon Mujigae which affected China, Vietnam and the Philippines, and (5) Typhoon Goni which affected parts of Taiwan, China, Japan, Korea, and the Philippines. Information in the annual report provides estimates of revenue impact, average site time-to-recovery (TTR) and the number of sites affected.

Key report highlights:

  • For a third year in a row, factory fires/explosions were the most commonly reported supply chain event and represented 17% of EventWatch bulletins in 2015.
  • For a third year in a row, the automotive industry was the most frequently impacted industry tracked by the EventWatch service, but by a relatively narrow margin compared with reported incidents that impacted the high tech and life sciences industries.
  • In 2015, the majority of supply chain events reported by EventWatch occurred in Asia, followed closely by North America. In 2014, the lion’s share of supply chain events emanated from North America.

“What makes the EventWatch Annual Report different from “Top 10 Supply Chain Event” lists and other year-end reports and commentary is that it is driven by data and focuses on impacts to specific brands, suppliers, sites, and parts, based on a calculation of value-at-risk,” said Wayne Caccamo, Resilinc chief marketing officer. “This contrasts with other publications that provide a more qualitative assessments, based typically on estimates of damage to public or shared infrastructure; this tends to bias the focus toward downstream/logistics-related disruptions.”

About the EventWatch Annual Report

The EventWatch Annual Report aggregates, analyzes, and summarizes supply chain event information generated by the EventWatch® 24x7 global event monitoring, alert, and analysis service. EventWatch is the leading service of its kind and used by global corporations to improve their event responsiveness and crises preparedness. The EventWatch Annual Report is used by supply chain risk practitioners, analysts and executive stakeholders to understand global supply chain risk trends through a variety of lenses. It answers questions like: Which event types are most common or becoming more common? How does my industry compare to other industries in terms of the number of events experienced? Which regions are impacted the most? And, what months see the most incidents?

About Resilinc

Resilinc is the leading cloud provider of supply chain resilience and risk management intelligence and analytics. Industry leaders like Amgen, GM and EMC rely on Resilinc to mitigate risks end-to-end, while achieving long-term competitive advantage, and building brand and shareholder value. The Resilinc SCRM solution platform and services deliver the fastest time-to-value and the lowest resource Impact. It accomplishes this by providing the world’s largest repository of supplier and part intelligence leveraging the power of our “LinkedIn” supplier community; the most robust set of dashboard visualization and patent-pending analytic functionality for pro-active planning and risk quantification; and the only solution that personalizes your impact analysis by automatically connecting incidents with your supply chain map so you don’t have to.

Media Contact:

Marc Gendron
MarComm PR
559-824-8360
marcg@marcommpr.com

Resilinc Publishes 2015 EventWatch® Supply Chain Disruption Annual Report

February 3, 2016 Posted by Press Release 0 thoughts on “Resilinc Publishes 2015 EventWatch® Supply Chain Disruption Annual Report”

Resilinc Publishes 2015 EventWatch® Supply Chain Disruption Annual Report

Report Names the EventWatch Top 5™ Supply Chain Events of 2015

Milpitas, CA – February 2, 2016. Resilinc released online today its 2015 supply chain events annual report which summarizes and analyzes nearly 750 unique supply chain notifications and alerts generated by its EventWatch® 24X7 global event monitoring, alert, and analysis service.

Supply chain risk management practitioners subscribe to the EventWatch service to receive early warnings and analysis of supply chain incidents that can negatively impact revenue, market share, customer satisfaction, and shareholder value. EventWatch is the only service of its kind that personalizes the EventWatch client’s potential impact at the supplier site and part levels to quantify the potential revenue at risk.

The annual report analyzed incidents by risk type, industry, geography, severity, and seasonality and compared 2015 data in these categories with 2013 and 2014.

“2015 saw a high level of disruptive supply chain event activity as several significant events occurred throughout the year, from the major explosions at the Port of Tianjin last summer to numerous chart-topping typhoons in the critical Asia-Pacific region,” said Neil Shenoi, Resilinc EventWatch Program Analyst. “The arrival of El Niño in the latter half of 2015 spiked erratic and disruptive weather events which impacted global supply chains.”

The report also reveals The EventWatch Top 5™ supply chain events of 2015. The top 5 event ranking is driven by estimated aggregate revenue impact. This was calculated leveraging Resilinc’s database of over 80,000 suppliers and approximately 1.5 million parts which are tracked in its cloud supplier intelligence repository.

The top 5 events were (1) Typhoon Soudelor and (2) Typhoon Dujuan which both hit Taiwan, China and the Philippines, (3) Tianjin explosions at the Port of Tianjin, China, (4) Typhoon Mujigae which affected China, Vietnam and the Philippines, and (5) Typhoon Goni which affected parts of Taiwan, China, Japan, Korea, and the Philippines. Information in the annual report provides estimates of revenue impact, average site time-to-recovery (TTR) and the number of sites affected.

Key report highlights:

  • For a third year in a row, factory fires/explosions were the most commonly reported supply chain event and represented 17% of EventWatch bulletins in 2015.
  • For a third year in a row, the automotive industry was the most frequently impacted industry tracked by the EventWatch service, but by a relatively narrow margin compared with reported incidents that impacted the high tech and life sciences industries.
  • In 2015, the majority of supply chain events reported by EventWatch occurred in Asia, followed closely by North America. In 2014, the lion’s share of supply chain events emanated from North America.

“What makes the EventWatch Annual Report different from “Top 10 Supply Chain Event” lists and other year-end reports and commentary is that it is driven by data and focuses on impacts to specific brands, suppliers, sites, and parts, based on a calculation of value-at-risk,” said Wayne Caccamo, Resilinc chief marketing officer. “This contrasts with other publications that provide a more qualitative assessments, based typically on estimates of damage to public or shared infrastructure; this tends to bias the focus toward downstream/logistics-related disruptions.”

About the EventWatch Annual Report

The EventWatch Annual Report aggregates, analyzes, and summarizes supply chain event information generated by the EventWatch® 24x7 global event monitoring, alert, and analysis service. EventWatch is the leading service of its kind and used by global corporations to improve their event responsiveness and crises preparedness. The EventWatch Annual Report is used by supply chain risk practitioners, analysts and executive stakeholders to understand global supply chain risk trends through a variety of lenses. It answers questions like: Which event types are most common or becoming more common? How does my industry compare to other industries in terms of the number of events experienced? Which regions are impacted the most? And, what months see the most incidents?

About Resilinc

Resilinc is the leading cloud provider of supply chain resilience and risk management intelligence and analytics. Industry leaders like Amgen, GM and EMC rely on Resilinc to mitigate risks end-to-end, while achieving long-term competitive advantage, and building brand and shareholder value. The Resilinc SCRM solution platform and services deliver the fastest time-to-value and the lowest resource Impact. It accomplishes this by providing the world’s largest repository of supplier and part intelligence leveraging the power of our “LinkedIn” supplier community; the most robust set of dashboard visualization and patent-pending analytic functionality for pro-active planning and risk quantification; and the only solution that personalizes your impact analysis by automatically connecting incidents with your supply chain map so you don’t have to.

Media Contact:

Marc Gendron
MarComm PR
559-824-8360
marcg@marcommpr.com

Resilinc Publishes 2015 EventWatch® Supply Chain Disruption Annual Report

February 3, 2016 Posted by Supply Chain Event Monitoring, Supply Chain Resiliency, Supply Chain Risk Management 0 thoughts on “Resilinc Publishes 2015 EventWatch® Supply Chain Disruption Annual Report”

Author: Neil Shenoi

AR_BLOG_PIC.jpgResilinc has published its 2015 supply chain events annual report which summarizes and analyzes nearly 750 unique supply chain alerts and notifications generated by the EventWatch® 24x7 global event monitoring, alert, and analysis service in 2015. 2015 saw a high-level of disruptive supply chain event activity as several significant events occurred throughout the year, from the major chemical explosions at the Port of Tianjin to numerous chart-topping typhoons in the critical Asia-Pacific region and the arrival of El Nino in the latter half of the year. Evident in the report, numerous geo-political, macro-economic, social/technology and environmental trends continue to impact global supply chain continuity.

The annual report analyzes global supply chain incidents and trends according to risk type, industry, geography, severity, and seasonality, comparing 2015 data in these categories with 2013 and 2014. The report also includes the EventWatch Top 5™  Supply Chain Events for 2015, a key takeaway for supply chain practitioners. In this post, we provide an overview of the report; however, for a closer look at our data graphs, trend charts and analyses, check out the full EventWatch Annual Report.

Top 5 Supply Chain Events of 2015

A key takeaway from the annual report is the EventWatch Top 5™ supply chain events of 2015. The top 5 events ranking is driven by the estimated aggregate revenue impact from the highest-impact events reported by EventWatch throughout the year. The estimated revenue impact is calculated by leveraging Resilinc’s database of over 80,000 suppliers and approximately 1.5 million parts which are tracked by Resilinc’s cloud supplier intelligence repository.

The top 5 supply chain disruption events are listed below. Included in the annual report are estimates of the top 5 events’ revenue impact, average site time-to-recovery (TTR), and number of sites affected:

  1. Typhoon Soudelor – Taiwan, China, Philippines
  2. Typhoon Dujuan - Taiwan, China, and the Philippines
  3. Chemical explosions at the Port of Tianjin, China
  4. Typhoon Mujigae - China, Vietnam, Philippines
  5. Typhoon Goni - Taiwan, China, Japan, Korea, Philippines.

Key Report Highlights

  • Event Type: For a third year in a row, factory fires/explosions were the most commonly reported supply chain disruption event and represented 17% of total EventWatch bulletins in 2015.
  • Industry: From 2013 to 2015, the automotive industry was the most frequently impacted industry, but a narrow margin over the reported incidents that impacted the high tech and life sciences industries.
  • Geography: In 2015, the majority of supply chain events reported by EventWatch emanated from Asia, followed closely by North America. However, in 2014, North America produced the lion’s share of supply chain events reported by EventWatch.
  • Seasonality: In 2015, the three most impactful months to global supply chains were December, August, and September/March (tied). December was characterized by an unusual increase in factory fires/explosions, the impact of El Nino (which peaks during winter time), and increased merger and acquisition activity toward the end of the calendar year. August had a rare spike in activity due to the devastating Tianjin explosions and their subsequent disruptions.
  • Event Severity: Medium potential for disruption events were most common in 2015 and comprised 52% of all EventWatch bulletins, consistent with current supply chain impact research that suggests smaller, more frequent disruptions can be more costly in aggregate than those caused by high-impact, infrequent events. In 2015, medium and low-impact events represented around 90% of Eventwatch bulletins.

While these are only highlights of the report, please check out the full report for trends charts and analyses, data graphs, and a deeper discussion of supply chain risk in 2015.

About the EventWatch Annual Report

For those unfamiliar, the EventWatch Annual Report aggregates, analyzes, and summarizes supply chain event information generated by the EventWatch service. The EventWatch Annual Report helps supply chain risk practitioners, analysts, and executive stakeholders understand global supply chain risk trends through various lenses, answering questions like: Which event types are most common or becoming more common? How does my industry compare to other industries in terms of the number of events experienced? Which regions are impacted the most? What months see the most supply chain disruptions?

Compared to other “Top 10 Supply Chain Event” lists, the Eventwatch Annual Report is uniquely driven by data and focuses on upstream impacts to specific brands, suppliers, sites, and parts, based on calculated value-at-risk. Resilinc’s rapidly expanding supplier repository contains risk information associated with over 80,000 suppliers and 1.5 million parts, and already on-boarded suppliers represent up to 90% of a company’s upstream supply chain. This is in contrast with other publications that provide more qualitative assessments based typically on estimates of damage to public or shared infrastructure, which invariably steers the focus toward downstream/logistics-related disruptions.

Hurricane Patricia Marks the First Supply Chain Event Definitively Connected to El Niño

October 27, 2015 Posted by Press Release 0 thoughts on “Hurricane Patricia Marks the First Supply Chain Event Definitively Connected to El Niño”

Hurricane Patricia Marks the First Supply Chain Event Definitively Connected to El Niño

Resilinc Impact Assessment and Analysis White Paper Provides CPOs and Supply Chain Leaders with Strategies to Mitigate Future El Niño–Related Supply Chain Risks Proactively

Milpitas, CA – October 26, 2015. Hurricane Patricia – the strongest hurricane ever recorded in the western hemisphere – made landfall on the Pacific coast of Mexico on Friday, October 23rd around 6:15 p.m. local time. The supply chain impact, while still being assessed, clearly can be characterized as minor, especially when compared to relatively recent historic extreme weather events such as Hurricane’s Katrina and Sandy and other “acts of god’ such as the Japan Earthquake and Tsunami and the Thailand floods of 2011. It is nevertheless significant as it represents the first weather event with the potential to impact supply chains that can be definitively linked to the El Niño weather pattern.

Several events running up to Patricia have been postulated to be linked to El Niño. These include Typhoon Soudelor (August), Hurricane Etau in Japan (September), Typhoon Dujuan in Taiwan and Eastern China (September), and even the air quality crisis in Singapore and Malaysia (September) caused by Indonesia forest fires associated with El Niño induced drought conditions. However, based on the consensus of scientists and climatologists (including those at NASA and Stanford University), the connection between Hurricane Patricia and El Niño is not in the realm of conjecture, but rather reality.

Resilinc, the leading cloud technology provider of supply chain risk management intelligence and analytics, has been warning its clients and the broader supply chain management professional community for months to take proactive mitigation actions in preparation for the impending El Niño. In a recent impact analysis white paper entitled El Niño: A Test of CPO Leadership and Your Supply Chain Resiliency Culture, Resilinc argues that El Niño is unique in that it is perhaps the only supply chain disruption phenomenon in which the general timing and geographic location of the potential impact is known well in advance, providing a unique opportunity to plan and prepare. It concludes that if executive leadership is blindsided by El Niño, they have no one else to blame but themselves.

The good news says Wayne Caccamo, Chief Marketing Officer at Resilinc, is that it’s not too late to get started. “We are only in the first inning of a nine inning ball game,” said Caccamo. “There is no more time to waste, but it is not too late to identify your areas of geographic exposure to El Nino driven extreme drought and precipitation conditions. The next step is to map suppliers, sites and parts at risk, and then proactively quantify and prioritize mitigation opportunities based on revenue-at-risk.”

Although fears of a major catastrophe did not materialize, as there were no immediate reports of any deaths or damages to major infrastructure, the potential for supply chain impact from Hurricane Patricia for companies with significant supplier exposure in the western coast of Mexico (specifically the states of Nayarit, Colima and Jalisco), was daunting. hurricane-patricia-factory-sitesThe Pacific coast of Mexico is home to numerous automotive, high tech, life sciences, and other industrial manufacturing facilities, as well as port and freight operations. Key companies in the region include Flextronics, America Movil, Mexichem, Grupo Mexico, Pacific Coast Energy and Minerals LLC, and Ciudad Industrial Morelia. But, in the end supply chain impact appears limited to minor work operation disruptions from localized wind damage, floods, and mudslides impeding workforce transportation and the flow of goods in-and-out of southwestern Mexico.

According to experts, the favorable outcome can be attributed to two factors: preparation and luck. As reported in the Sunday New York Times (“Mexico Exhales after Surviving a Giant Storm,” by Azam Ahmed and Paulina Villegas, October 15, 2015), the Mexican authorities learned some hard lessons from inadequate responses to earlier responses. Mexico now has a national emergency response system that coordinates with authorities at the local level. Federal and local officials were effective in proactively moving people out of harm’s way, and after the storm responded quickly to clear roadways and begin to restore power and communication lines. Despite the effective planning, the impact still had the potential to be devastating if not for a lucky break. The path of the storm passed between two major cities, Puerto Vallarta and Manzanillo, but hit neither directly. It then quickly dissipated 12 hours after touching ground when it veered into a mountainous region.

“The key take-away from the Hurricane Patria experience,” said Caccamo, “is that luck, or hope if you prefer, is not a strategy. Enterprises should follow the lead of the Mexican government and invest in proactive risk mitigation plans and post-event emergency response preparedness. Hurricane Patricia represents perhaps your final wake-up call.” He continued, “For those who prepare, global supply chain disruption events are viewed not as threats but as opportunities to gain competitive advantage.”

About Resilinc

Resilinc is the leading cloud provider of supply chain resilience and risk management intelligence and analytics. Industry leaders like Amgen, GM, and EMC rely on Resilinc to mitigate risks end-to-end, while achieving long-term competitive advantage, and building brand and shareholder value. Resilinc’s flagship SCRM solution platform and services deliver the fastest time-to-value and the lowest resource Impact. It accomplishes this by providing the world’s largest repository of supplier and part intelligence leveraging the power of our “LinkedIn” supplier community; the most robust set of dashboard visualization and patent-pending analytic functionality for proactive planning and risk quantification; and the only solution that personalizes your impact analysis by automatically connecting incidents with your supply chain map so you don’t have to.

Media Contact:

Marc Gendron
MarComm PR
559-824-8360
marcg@marcommpr.com

Hurricane Patricia: The First Supply Chain Event Definitively Connected to El Niño

October 26, 2015 Posted by Supply Chain Event Monitoring, Supply Chain Risk Management 0 thoughts on “Hurricane Patricia: The First Supply Chain Event Definitively Connected to El Niño”

Author: Wayne Caccamo

hurricane-patricia-factory-sitesHurricane Patricia – the strongest hurricane ever recorded in the western hemisphere – made landfall on the Pacific coast of Mexico on Friday, October 23rd, around 6:15 p.m. local time. The supply chain event impact, while still being assessed, clearly can be characterized as minor, especially when compared to relatively recent historic extreme weather events such as Hurricane’s Katrina and Sandy and other “acts of god’ such as the Japan Earthquake and Tsunami and the Thailand floods of 2011. It is nevertheless significant as it represents the first weather event with the potential to impact supply chains that can be definitively linked to the El Niño weather pattern.

Several events running up to Patricia have been postulated to be linked to El Niño. These include Typhoon Soudelor (August), Hurricane Etau in Japan (September), Typhoon Dujuan in Taiwan and Eastern China (September), and even the air quality crisis in Singapore and Malaysia (September) caused by Indonesia forest fires associated with El Niño induced drought conditions. However, based on the consensus of scientists and climatologists (including those at NASA and Stanford University), the connection between Hurricane Patricia and El Niño is not in the realm of conjecture, but rather reality.

We have been warning our clients and the broader supply chain management professional community for months to take proactive mitigation actions in preparation for the impending El Niño. In a recent impact analysis white paper entitled El Niño: A Test of CPO Leadership and Your Supply Chain Resiliency Culture, we argued that El Niño is unique in that it is perhaps the only supply chain disruption phenomenon in which the general timing and geographic location of the potential impact is known well in advance, providing a unique opportunity to plan and prepare. It concludes that if executive leadership is blindsided by El Niño, they have no one else to blame but themselves.

The good news is that it’s not too late to get started. We are only in the first inning of a nine inning ball game. There is no more time to waste, but it is not too late to identify your areas of geographic exposure to El Nino driven extreme drought and precipitation conditions. The next step is to map suppliers, sites and parts at risk, and then proactively quantify and prioritize mitigation opportunities based on revenue-at-risk.

Although fears of a major catastrophe did not materialize, as there were no immediate reports of any deaths or damages to major infrastructure, the potential for supply chain impact from Hurricane Patricia for companies with significant supplier exposure in the western coast of Mexico (specifically the states of Nayarit, Colima, and Jalisco), was daunting. The Pacific coast of Mexico is home to numerous automotive, high tech, life sciences, and other industrial manufacturing facilities, as well as port and freight operations. Key companies in the region include Flextronics, America Movil, Mexichem, Grupo Mexico, Pacific Coast Energy and Minerals LLC, and Ciudad Industrial Morelia. But, in the end supply chain impact appears limited to minor work operation disruptions from localized wind damage, floods, and mudslides impeding workforce transportation and the flow of goods in-and-out of southwestern Mexico.

According to experts, the favorable outcome can be attributed to two factors: preparation and luck. As reported in the Sunday New York Times (“Mexico Exhales After Surviving A Giant Storm,” by Azam Ahmed and Paulina Villegas, October 15, 2015), the Mexican authorities learned some hard lessons from inadequate responses to earlier responses. Mexico now has a national emergency response system that coordinates with authorities at the local level. Federal and local officials were effective in proactively moving people out of harm’s way, and after the storm responded quickly to clear roadways and begin to restore power and communication lines. Despite the effective planning, the impact still had the potential for devastating if not for a lucky break. The path of the storm passed between two major cities, Puerto Vallarta and Manzanillo, but hit neither directly. It then quickly dissipated 12 hours after touching ground when it veered into a mountainous region.

The key take-away from the Hurricane Patria experience is that luck, or hope if you prefer, is not a strategy. Enterprises should follow the lead of the Mexican government and invest in proactive risk mitigation plans and post-event emergency response preparedness. Hurricane Patricia represents perhaps your final wake-up call. For those who prepare, global supply chain disruption events are viewed not as threats but as opportunities to gain competitive advantage.

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