On October $17,2016,$ because of an incorrect maintenance operation on a pipeline at BASF facility in Ludwigshafen

$($Germany$),$ there was an explosion and subsequent fires at North Harbor, a terminal for the supply of raw materials such as

naphtha, methanol and compressed liquefied gases. More than $2\mathrm{.}6$ million tons of goods are handled there each year and

an average of seven ships a day moor at its docks. Two steam crackers, the starting point for producing basic chemicals,

needed to be stopped because they could no longer be supplied, and $22$ were only partially working. The two steam

crackers could have been restarted $2$ days later, but only in May $2017$ was the concept for reconstruction released

whereby the reconstruction should be completed by September $2017.$ Restricted production output, daily revenue

decreases of $1015\%$ as compared to the previous year during the disruption period, impact on the basic chemicals

division $($about $21\%$ of sales$),$ delivery delays, limited access to key raw materials, exhausted product inventories, and a

forecasted impact on $6\%$ of BASF$$s annual earnings were some of the consequences of this incident $($Dolgui et al$.2018).$

Logistics was temporarily shifted from ships and pipelines to trucks and trains. BASF was in close contact with its

customers to keep them informed about the current availability of products to minimize the impact on customer deliveries.

Because of BASF integrated $$Verbundsystem$($networking system$),$ comprised of various plants and delivery systems for

feedstocks, the incident had an impact along the global supply chain $($SC$).$ This high and long$-$term impact is the so$-$called

ripple effect $($Ivanov et al$\mathrm{.}2014$a$,$ b$).$ BASF built a resilient SC$,$ which is why the economic consequences of the incident

were considerably smaller than expected. BASF took process safety and risk prevention measures that included globally

valid guidelines and requirements for buildings etc. and practical security trainings for employees and support staff. Along

with process safety and risk prevention measures, BASF has global emergency response management. This management

consists of the integration of worldwide group companies, joint ventures, partners, suppliers and customers. Emergency

phones and an integrated network of control centres $($e$.$g$.$ internal$/$external fire departments and rescue service$)$ also

enable this global emergency response management to work even more closely together. BASF was prepared for the

incident in October $2016,$ but there are still long$-$term impacts being experienced.

Source: Ivanov, D$.$ Tsipoulanidis, A and Sch$$nberger$,$ J$.(2019)$ Global Supply Chain and Operations Management:

A decision$-$oriented introduction into the creation of value, Springer Nature, Cham, $2$nd Ed$.,$

QUESTION $1$

$1\mathrm{.}1$ As extracted from the case study, BASF built a resilient supply chain, which is why the economic

consequences of the incident were considerably smaller than expected. Considering this statement, critically

discuss what resilient supply chains entail in the context of BASF and their significance in contributing to its

bottom$-$line. Your response should make use of relevant examples.