Supply risk management is all about identifying all of the things that can go wrong in the supply chain and coming up with a plan to ensure that operations aren’t disrupted in the event that one of the things that can go wrong, does.  Great supply risk management is when you can recover when something goes wrong in the supply chain that you didn’t anticipate, despite your best efforts to identify all possible risks.

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I have a feeling that Apple is finding itself trying to recover from such a situation right now.

After launching the iPhone 5 just last week – and surely seeing increased demand patterns in its supply chain – Apple is dealing with a rather unusual cause of a supply disruption:  a 2,000-employee brawl at one of its major suppliers.  An article on xfinity Finance revealed that Foxconn, an iPhone supplier, was forced to suspend production today after the brawl, which lasted about four hours.  The article indicated that “several people were arrested [and] 40 people were taken to hospitals for treatment.”

Is a 2,000-employee supplier brawl one of the causes of a supply disruption that you have planned for?

If not, that might be OK as long as you’ve prepared for the possibility of a major supplier being shut down for any reason.  It just goes to show that even if a supplier is not unionized, not located on a earthquake fault line, not financially unstable, etc., that doesn’t mean that you shouldn’t be prepared for them to shut down for a day or more without notice.

 

Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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