Supply chain disruptions from Harvey to increase transportation and logistics costs

Panos Kouvelis, director of the Boeing Center for Supply Chain Innovation and Emerson Distinguished Professor of Operations and Manufacturing Management at Olin Business School


When disasters occur, we are all emotionally affected. But much of the work of rebuilding, in cities large and small, will fall squarely on the shoulders of an often unrecognized party: the supply chain manager.

In today’s tightly connected supply chain, a localized disaster — regardless of where it takes place — can have global implications. The Japanese earthquake and tsunami of 2011 knotted up American and Western European automotive plant production. Later that year, flooding in Thailand caused a 40 percent loss in hard disk drives, disrupting PC manufacturers.

Hurricanes Harvey and Irma provide another stunning reminder of how far such disasters can reach. It is no exaggeration to say that, in the weeks and months to come, the whole world will feel their after-effects.

For supply chain managers confronting a disruption, the first-level reaction is to consider which customers, products, facilities, employees and suppliers are at the greatest risk. What is the overall revenue exposure, and how long it will take to recover?

Read the full piece in the Houston Business Journal.

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