On March 11, 2011, a massive earthquake struck Japan, triggering a devastating tsunami that led to widespread flooding and destruction. But even as the threat of nuclear meltdown mounted, Jabil Director of Supply Chain Management, Jiro Usami, remained in Tokyo. Jabil supplier and commodity partners scrambled to quickly assess options as the situation in Japan rapidly degraded. Depending on the flexibility and intelligence of global corporate supply chains, the financial impact of the disaster varied dramatically. Considering the global nature of supply chains, growth centered in emerging geographies, and economic and market volatility, supply chain risks are greater than ever. Many companies simply do not have the expertise and the global footprint to weather a major supply chain disruption.
Zurich Financial Services Group conducted a supply chain disruption survey in 2011 to study the level of supply chain disruption due to various factors. The findings are compelling:
The 2011 earthquakes and tsunami experienced in Japan and New Zealand affected 20% of survey respondents from 18 different nations. Furthermore, 51% of respondents cited adverse weather as the main cause of supply chain disruption. Not surprising, supply chain incidents led to productivity loss for almost half of businesses. Thirty eight percent reported increased costs and 32% reported revenue loss.
But natural disasters are just one of the risks facing supply chains. Companies that grew rapidly by globalizing supply chains to take advantage of lower costs are now facing a multitude of unforeseen challenges. For example, companies that manufacture flat screen televisions, smart phones, and medical devices face uncertain availability of the rare earth minerals needed to meet production forecasts. Furthermore, geo-political instability further threatens the supply of key minerals. And rising labor costs in once low-cost regions are causing companies to reconsider their global supply chain strategy. Many companies simply don’t have the resources or the expertise to redesign their supply chain strategy.
Enter the intelligent supply chain partner. Imagine what your company could accomplish if the burden of supply chain management was trusted to an intelligent supply chain partner? Companies could then focus on better designing, building, delivering and servicing their products. If companies focus on creating great products instead of constantly reacting to the many supply chain variables that disrupt their business, they’re better poised to secure strategic competitive advantage.
Within hours of the Japanese earthquake, Jiro and the global Jabil team mitigated supply chain disruptions so that Jabil’s customers were unaffected by the tragedy that unfolded in Japan. Because of Jabil’s proactive entrepreneurial teams, some of the world’s most respected brands rely on Jabil’s expertly designed, optimized, efficient, flexible, resilient and sustainable intelligent supply chains.
Using world-class predictive supply chain design tools, Jabil supply chain experts develop ingenious solutions custom-tailored to suit each customer’s business needs. The tools simplify the decision process by providing fast (immediate) and meaningful insights into key supply chain metrics. Our financial performance, integrity and stability allow us to invest in the talent, technologies and techniques that benefit our customers most. That’s where Jabil adds value for its customers.
So, can your company successfully respond to catastrophic global supply chain disruptions? Consider how you could grow your company if you didn’t have to focus on supply chain details, leaving intelligent supply chain design to your strategic partner with global expertise, entrepreneurial teams and a track record of success. Your customers will thank you.