Supply Chain Vulnerability Focus
“One estimate suggests that a stoppage of the production line at Nissan’s plant in Sunderland is a cost of £6,000 per minute, or £8.6m per day in lost earnings”
So with local, national and global supply chains and logistics all affected, what can we do to increase our ability to reorganise and deliver logistics services in the face of external factors outside of our control?
OPERATIONAL CHANGES
Certainly, across the physical supply chain, we can consider some of the following operational changes to increase resilience: • Near shoring – shortening our logistics networks by using more local suppliers;
• Spread capacity – establish a wider ‘plant floor’ across a number of distribution and production centres so that if one is affected by disaster another can be brought online;
caused shipping delays and diversions. As sophisticated as it is, the automotive supply chain is also not totally resilient; for example one estimate suggests that a stoppage of the production line at Nissan’s plant in Sunderland is a potentially eye- watering cost of £6,000 per minute, or £8.6m per day in lost earnings. In the Far East, where severe weather is an annual event, its impact is quite damaging on the high technology materials supply chains, disrupting the supply of key components such as micro-processors and hard disk drives to the computer and mobile technology industry. Closer to home, we had container
traffic diverted from North Sea ports to the relatively calmer Southampton and London Gateway ports. Airfreight, too, took a hit during recent storms.
• Dual sourcing – have alternative suppliers of products and services, should disruption occur in one part of the supply chain. But you may say, that just builds unnecessary channel cost impacting on the structure and competitiveness of the business. However, investing in supply chain contingency planning is like buying insurance — you commit time, manpower, and resources to something you hope you’ll never need, but increasingly you do. And the assurance that gives to customers, especially those with critical supply needs, is a distinct competitive advantage. Costs are balanced against loss avoidance caused by weather disruption.
SCALE OF SERVICE
Risk management needs to be an integral part of supply chain resilience, and spreading the risk of the impact of such disruption can be achieved by outsourcing and collaboration with a skilled and committed partner. NextGen Logistics, a Briggs Equipment initiative, has been designed specifically for warehousing and logistics businesses to help deliver added value, cost reduction and unique flexibility through a collaborative approach. At Briggs Equipment we also have the scale in our engineering services to help
www.shdlogistics.com
Figure 1: causes of supply chain disruption in the UK
companies overcome the challenges of disruptions such as adverse weather and meet their needs in areas of supply chain resilience that they may not have even realised they needed. So whether it is the challenge of supplying temporary equipment at a new facility, rapid service turnaround of damaged equipment or shifting operations intermodal from road to rail freight, Briggs Equipment can achieve a rapid solution to help reorganise a supply chain to deliver its core function. The scale and diversity of Briggs Equipment is highlighted by our partnership approach at the UK ports and terminals, the MoD and also with large supply chain integrators such as Hitachi. Large 3PL fleet integrators often work in collaboration with outsourced fleet engineering service suppliers such as Briggs Equipment. With large fleets spread over vast geographic areas and thousands of possible servicing events, considerable engineering expertise is needed to meet tight operational efficiencies whilst maximising asset availability. n
www.briggsequipment.co.uk
(1) The logistics report 2013 from the FTA:
http://tinyurl.com/oft5zgy
(2) Accenture: Building resilient supply chains:
http://tinyurl.com/pse9ewz
(3) Zurich report: The case for adaptation: helping UK businesses and government prepare for extreme weather:
http://tinyurl.com/qxve56q
March 2014 57
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