Posts in Eventwatch

Snapshot: Recent Supply Chain Events in Life Sciences & Biotech Industries

October 23, 2015 Posted by Eventwatch, Supply Chain Event Monitoring 0 thoughts on “Snapshot: Recent Supply Chain Events in Life Sciences & Biotech Industries”

Author: Wayne Caccamo

We just prepared a report for Rx-360 leadership on potential supply chain disruption events over a recent three-and-one-half week period of time. The supply chain events were all detected and reported by our 24/7 EventWatch® global event monitoring and analysis service. I thought I would share some data we rolled up over this “snapshot” period of time. It sheds some light on the frequency and diversity of types of events that hit the life sciences and biotech global supply chains every day.

For those of you who are not familiar with Rx-360, it is a not-for-profit consortium led by volunteers from the Pharmaceutical and Biotech industry including both manufacturers and suppliers. The purpose is to enhance the security of the pharmaceutical supply chain and to assure the quality and authenticity of the products moving through the supply chain.

The EventWatch® team issued 53 potential life sciences and biotech industry-specific disruption event bulletins over a 24 day period starting on September 23 and ending on October 16. That’s a little over 2 (2.2) potential disruption events per day. All events included were determined to be relevant to life sciences and biotech from a supply chain business continuity perspective, although some clearly have a more direct impact.

Over that period, there were no events with a “severe” disruption potential. There was only one that was given a “high” disruption potential: Fire Reported at Braskem Plant in Sao Paulo Brazil (10/15/2015).  There were 32 “Moderate” and 20 “Low” potential impact events.

The 53 events could be categorized into 18 types. We actually track over 30 types and the 18 types could be broken out into more granular categories, but to simplify the discussion for the purposes of this blog post, the specific categories were as follows:

rx-360-supply-chain-disruption-snapshot

As you can see, Severe Weather Events and M&A/Splits were by far the most common events, followed by Labor Strikes and Factory Fires. The top 4 categories accounted for 62% of the events. The weather-related events can be expected to spike since this is “hurricane” season in many geographies. The plethora of mergers, acquisitions, and divestitures in the life sciences and biotech industry during this reporting period is noteworthy. We typically see factory fires and labor strikes (although to a lesser extent) to be a major source of disruptions across all industry supply chains. The rest of the event profile consists of a large number of event categories (14) with a small number of incidents (1 or 2).

The number and diversity of events makes it very difficult for companies to monitor on their own without a dedicated 24/7 team with access to all traditional and social media channels and the ability to track events reported in all major languages.

But, it’s not enough to just detect and monitor events. You need a process and analytic technology that connects the dots between events and the impact to your specific suppliers, sites, parts, and value-at-risk. This enables you to respond rapidly, mitigate further risk, minimize time-to-recovery, and even turn the threat into an opportunity to gain a competitive advantage.

Leading global brands and OEMs in the life sciences, including several Rx-360 member companies, high-tech, automotive, and other industries rely on the EventWatch® supply chain event monitoring service in combination with the Resilinc SCRM solution suite to maximize business continuity and gain a competitive edge.

Tianjin Warehouse Explosions Heighten Need for Supply Chain Visibility

August 15, 2015 Posted by Eventwatch, Supply Chain Event Monitoring, Supply Chain Risk Management, Supply Chain Visibility 0 thoughts on “Tianjin Warehouse Explosions Heighten Need for Supply Chain Visibility”

Author: Natalia Kosk

Explosions in Tianjin, China, this week called attention to the lack of sufficient chemical storage standards compliance present in the country. If not more strongly regulated, improper chemical storage and transport actions could cause major supply chain risks, sending a potential ripple effect felt across businesses in the Tianjin region and also throughout the global supply chain.

Chinese President Xi Jinping confirmed “severe problems in the work safety sector,” according to a report from the Xinhua news agency,1 following numerous chemical warehouse explosions in Tianjin, China, earlier this week which left more than 100 people dead and hundreds others injured. In addition, the State Council Work Safety Commission also cited a “lack of safety awareness among businesses, lax implementation of safety regulations, irregular practices among workers, and weak emergency responses to incidents,” according to the report.

The initial explosion, which occurred before 12 a.m. local time on Aug. 12 at a chemical warehouse facility owned by Ruihai International Logistics Co., led to other explosions in the area.

Events following the initial explosion in the Tianjin area this week included:

  • A second explosion, more powerful than the first (equal to about 21 tons of TNT), and heard seconds after the first explosion on Aug. 12, according to a CNBC report2
  • Two container terminal operations at Port of Tianjin were suspended following the explosions, per the Journal of Commerce3
  • According to numerous reports, the website of Ruihai Logistics becomes inaccessible Thursday afternoon
  • 50 people reported dead on Thursday and some 700 injured4
  • Port of Tianjin and numerous companies in area—including BHP Billiton Ltd., Renault, Hyundai Motor Co., GlaxoSmithKline PLC, and Deere & Co.5— heavily affected by explosions as of Friday
  • Warehouse fire reported on Friday evening to have been out but visible again on Saturday morning local time, in addition to more blasts heard in the affected area6
  • 85 dead confirmed on Saturday morning by local Chinese news agencies
  • Death toll rises to 100-plus on Saturday; air pollution poses no risk as of yet7

While authority officials continue to investigate the cause of the warehouse explosion, sodium cyanide is one chemical which may have been stored at the warehouse, according to Gao Huaiyou, vice head of the Tianjin bureau of work safety.8 Other chemicals, not yet confirmed, may have included calcium carbide, toluene diisocyanate,9 and potassium and ammonium nitrate. The risks that such chemicals expose to human health can be deadly, further increasing the level of severity and danger of the explosions, and enhancing the critical need to apply proper Supply Chain Risk Management (SCRM) practices.

Calcium carbide is a highly volatile chemical used in the production of PVC plastic. When exposed to water, it releases acetylene, which is highly flammable. According to Bloomberg, it is suspected that firefighters attempting to quell the initial fire from the first explosion may have exposed existing calcium carbide in the warehouse to water, potentially causing the second explosion. Toluene diisocyanate, another chemical which may have been stored at the warehouse, is commonly used in the production of flexible polyutherane foam. Ammonium nitrate is predominantly used in agriculture as a high-nitrogen fertilizer. Its compound is used as an explosive in mining and also sometimes in improvised explosive devices. Potassium occurs as a mineral niter also known as saltpeter, and is a natural solid source of nitrogen. Major uses of potassium nitrate are in fertilizers, tree stump removal, rocket propellants, and fireworks. It is also one of the major constituents of gunpowder.

The Tianjin explosions additionally brought to light Ruihai Logistics’ earlier problems with adherence to proper standards. “Inappropriate ‘danger’ labeling” was a cause of a failed safety inspection in 2013, according to a Reuters report.10 14,000 containers located at Rui Hai’s warehouse were inspected, of which “29 from the five firms had failed the packaging checks,” according to the report.

Executives of Rui Hai International Logistics are in custody and a nationwide order to inspect the storage and transport of dangerous chemicals is underway11 (requiring all local governments to report back by Sept. 15). While important during the aftermath of the Tianjin explosions, local governments must take stronger efforts to enforce rules and severe penalties around such supply chain risks as improper chemical storage or handling.

The explosions also enforce the importance for businesses to understand the regions their supply chains are in and what measures they can take to proactively address supply chain disruptions and increase supply chain visibility. Utilizing the right solutions to monitor events such as the Tianjin explosions can better prepare them to understand:

  • Whether their company, parts/materials or overall industry could potentially be affected
  • What their right Emergency Response Procedures are, if affected
  • What their potential risk mitigation options are, such as an alternate qualified facility, backup inventory or backup source

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

References

  1. Profound Lessons Must Be Learned from Tianjin Blasts: Chinese leaders, Aug. 15, 2015, Xinhua: http://news.xinhuanet.com/english/2015-08/15/c_134521192.htm
  2. Death Toll in China's Tianjin Explosion Rises to 50: Reports, Aug. 13, 2015, CNBC:http://www.cnbc.com/2015/08/12/explosion-in-tianjin-china.html
  3. Deadly Tianjin Blast Shuts Down Two Container Terminals, Aug. 13, 2015, JOC Group Inc., http://www.joc.com/port-news/deadly-tinajin-blast-shuts-down-two-container-terminals_20150813.html
  4. Chinese Port City Tianjin Searches for Clues After Devastating Blasts, Aug. 14, 2015, The Wall Street Journal: http://www.wsj.com/articles/explosions-kill-dozens-at-warehouse-in-tianjin-china-1439449553
  5. Chinese Port City Tianjin Searches for Clues After Devastating Blasts, Aug. 14, 2015, The Wall Street Journal: http://www.wsj.com/articles/explosions-kill-dozens-at-warehouse-in-tianjin-china-1439449553
  6. Tianjin Blasted Warehouse on Fire Again, Aug. 15, 2015, Xinhua: http://news.xinhuanet.com/english/2015-08/15/c_134520494.htm
  7. Tianjin, China, Explosion Area Evacuated as Death Toll Rises to At Least 104, Aug. 15, 2015, NBC News: http://www.nbcnews.com/news/world/tianjin-china-explosion-area-evacuated-over-sodium-cyanide-fears-n410371
  8. Profound Lessons Must Be Learned from Tianjin Blasts: Chinese Leaders, Aug. 15, 2015, Xinhua: http://news.xinhuanet.com/english/2015-08/15/c_134521192.htm
  9. Death Toll from Tianjin Explosions Climbs to Over 100, Aug. 15, 2015, CNN: http://www.cnn.com/2015/08/15/asia/china-tianjin-explosions/
  10. China Blast Warehouse Owner Violated Packaging Safety Tests in 2013, Aug. 13, 2015, CNBC: http://www.cnbc.com/2015/08/13/reuters-america-china-blast-warehouse-owner-violated-packaging-safety-tests-in-2013.html
  11. China Orders Safety Review of Toxic Cargos After Tianjin Blasts, Aug. 14, 2015, The Washington Post: http://washpost.bloomberg.com/Story?docId=1376-NT24726TTDS001-73IRH0DJ2OR3VRQUQ27613SP08

Additional Resources

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"

Supply Chain Resiliency Case Study: Was the Napa Earthquake a “Wake-Up” Event, or Did You Sleep In?

September 3, 2014 Posted by Eventwatch, Supply Chain Event Monitoring, Supply Chain Risk Mitigation 0 thoughts on “Supply Chain Resiliency Case Study: Was the Napa Earthquake a “Wake-Up” Event, or Did You Sleep In?”

Author: Charlotte Hicks

On Aug. 24 at 3:20 a.m. Pacific Time, a 6.0 magnitude earthquake shook Northern California, injuring many people, damaging buildings and knocking out power and water services around Napa.

Though the Bay Area region is prone to this kind of natural phenomenon, it’s been a while since locals felt something this significant. The last major earthquake in the Bay Area was the 6.9 Loma Prieta earthquake in 1989. Luckily, too, in comparison to other past tremors, the Napa earthquake was moderate.

But, still, it was an event that could have quickly turned in a wide-scale disruption. More importantly, it reveals how vulnerable supply chains are when Mother Nature is involved and how quickly you have to spring into action to get the situation under control. It is the perfect example of a supply chain resiliency case study.

For those of you who assess risk on a regular basis, you understand how critical it is to stop everything you’re doing when an event happens. In this case, literally taking the “wake-up” call, where you may have got out of bed immediately to analyze the situation and potential impact. That’s what happened as soon as our team felt the shake–our event monitoring team began scanning the newsfeeds, assessing the situation, alerting clients about what was happening and individually notifying our EventWatch subscribers of the potential impact to facilities in their supply chain. We did all this within 90 minutes of the earthquake’s occurrence.

We knew this would be vital information for many of our customers doing business in the region. Also, because the earthquake happened in the early morning hours on a Sunday, we knew risk mitigation executives would have to be ready to report to senior management and get the action plan moving by 8 a.m. Monday morning.

Since we were already at work gathering information and looking at the scope and scale of damage in the aftermath, Resilinc subscribers got a break. They got to sleep in because our 24x7 event monitoring services were doing the work for them. So while our subscribers may have woken up to a potentially disruptive situation, they did not have to spend their Sunday working on collecting the information or running the initial event analysis. They could take our alerts and start mapping out what-if scenarios, think about alternate sourcing plans and get their head around long-term risk-avoidance issues.

You Never Know When Disaster Will Strike. But, You Can Keep Your Supply Chain Moving When it Does

In 2011, the world witnessed how the earthquake in Japan and resulting tsunami had devastating effects to communities and global supply chains in electronics, automotive and life science industries. In contrast, the recent Napa earthquake was comparatively mild, but it occurred along a fault thought to be inactive. Some scientists are concerned that the release of stress by this fault could have increased the stress on the Hayward Fault, a major fault that runs east of the San Francisco Bay from San Jose to San Rafael. This area is densely populated with people and companies, and an earthquake in that area could have critical and direct impact on the automotive, electronics and life science supply chains (See map).What’s the damage? And what’s the impact on my company and supply chain partners? Those are usually the first questions supply chain and risk mitigation executives ask when a disruptive event hits. Resilinc provides that critical information when you need it.

Although Resilinc has assessed the North Bay earthquake as having a small impact on the supply chain, an event 60 miles south in San Jose could impact as many as 140 sites. Should an event occur here or anywhere, for that matter, Resilinc’s services reduce the analysis time for our customers by instantly providing notification of the sites potentially impacted as well as the part numbers. This gives our customers a head start on procuring material to keep their production online, and before supplies become scarce and prices increase.

The early morning North Bay earthquake was another reminder for the industry that things could change overnight. For some people, the news meant long hours trying to make sense of what was happening where and scrambling to stay up to date. Others, though, relied on our mapping and constant monitoring services, and got to spend their time mitigating the weekend rather than risk.

What’s your wake up going to be?

Find out more about Resilinc’s event monitoring capabilities.


Charlotte Hicks is a Product Manager for Resilinc, specializing in Life Science.

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