Managing Risks of Supply-Chain Disruptions: Dual ... - CiteSeerX

disruptions. And firms can also design a more flexible supply chain (with no duplication ofresources) that will permit to adapt the supply-chain according to the changes.Many recent articles provide with lists of recommendations. Sheffi (2001) for example explainshow adding some redundancies in the supply-chain can help to deal with “the aftermath of terroristattacks. Martha and Subbakrishna in their article “Targeting a Just-in-Case Supply Chain for theInevitable Next Disaster” also propose a series of measures and do so by looking at past disasters.Suggested recommendations are summarized in the following of this section.• Firms must enhance visibility in the supply-chain to be able to take the appropriate response- “Comprehensive Tracking and Monitoring”. An effective response strategy requiresdetecting quickly the location and the nature of the disruption. In that respect, firms needmonitoring systems, and then an effective measure would be to prioritize the disruptionsand define the first actions to take.- ‘Total Supply Network Visibility”. Having information on the rest of the supply-chain canhelp firms to take appropriate response. For instance, if firms have a clear view on thenature and location of the stocks and flows of goods, as well as on the capacities of itssuppliers and transportation providers it can easily re-route goods and re-deploy resources• Firms can add redundancies (this will be also referred to as “flexibility with duplication ofassets” in the continuation). As MIT research group on “Supply Chain Response to GlobalTerrorism” (2003) puts it, this duplication of resources will “ensure the availability of a backupsolution in case of disruption, or at least spread the risk”.- First firms can diversify supply sources. Such a strategy permitted Chiquita Brands to facesuccessfully Hurricane Mitch in 98 by increasing the productivity at its untouchedlocations of banana production. By contrast Dole which had only one supplier struggled tofind an alternative supplier of banana and suffered form a one-year disruption. Alternatesourcing is not sufficient; visibility on the supplier is also needed. The firm needs to assessthe “capabilities and vulnerabilities” of its suppliers.- Firms can plan alternate transportation strategies. This comprises alternate delivery routesto bounce back from new regulations at certain checkpoints and alternate delivery modeswhen conventional transportation channel is weakened. After 9/11 there were huge delays22