Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Most recently, a number of researchers start to model supply disruptions or demand disruptions by adopting quantitative approach thus seeking more realistic way to mitigate,

Most recently, a number of researchers start to model supply disruptions or demand disruptions by adopting quantitative approach thus seeking more realistic way to mitigate, recover from and cope with disruptions successfully. Actually, recent high profile catastrophic events such as COVD-19, Japan tsunami 2011, the hurricane Katrina and Rita, the tsunami, terrorist attack 9/11, etc. have motivated researchers to include supply chain disruptions risk into procurement and supply chain. Other types of catastrophic events that can interrupt business operations are snowstorms, heavy rain, excessive wind, fire, industrial and road accidents, strikes, and changes in government regulations. Thus, the possibility of supply disruptions should be considered during decision making. Some authors suggest dual and/or multiple sourcing as one of the efficient strategies to mitigate supply chain disruption risk. Though multiple sourcing strategies are more reliable, it adds additional cost for negotiation, making contract and monitoring the quality etc. A very well-known and widely cited example that highlights supply disruption and effectiveness of dual sourcing strategy is the case of Nokia-Ericsson in 2000. The Philip's microchips plant was shut down due to a fire accident. It caused Ericsson loss for about $ 400 million, while Nokia managed to source from alternative suppliers thus minimized the disruption effect. One recent large scale disaster that disrupted supply chain globally and forced the decision maker to think about supply chain disruptions is the Japan earthquake and tsunami in 2011. The earthquake and tsunami in Japan affected the supply chain of different organizations both domestically and internationally. Japan provides 60 % of the world silicon used for production of semiconductor chip. Besides, Japan is the world's leading supplier of dynamic random access memory and flash memory. Flash memory is used in standard logic controllers (SLC), liquid crystal display (LCD), and LCD parts and materials. After the catastrophic disaster, the prices of the components soared by 20 %, showing the global supply chain dependency on Japan. These large scale disruptions carry devastating negative impacts on firm performance in domestic and international level. For example, automakers-such as Ford, Chrysler, Volkswagen, BMW, Toyota, and GM-depend on Japanese supply chain, had to temporarily shut down some operation after the earthquake and tsunami. Such experience faced by the companies enforces the decision makers to rethink about turbulent business environment. Right after the Japan disaster, companies that heavily relied on single sourcing were trying to find new sources to avoid running out of components that had been obtained from Japan. These examples show the importance of having multiple suppliers to cope with supply disruptions. Questions: 1. Explain a Supply chain disruption and its impact on business? 2. Give a real world example of supply chain disruption other than given in the case study?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Operations and Supply Chain Management

Authors: Cecil B. Bozarth, Robert B. Handfield

3rd edition

132747324, 978-0132747325

More Books

Students also viewed these General Management questions