When Disasters Shake Global Supply Chain

Case Study Ipad 2 launching

Presented by: Eng. Mohammed Itani, MBA, DESM, CPES, CSCP, PMP

Title: Management Consultant & Private Equity Advisor

Impact of Globalization on SC Management

Globalization

New labor pools

Definition: “The interdependence of economies globally that results from the growing volume and variety of international transactions in goods, services, and capital, and also from the spread of new technology.”

New resources and suppliers

New markets

Impact of Globalization on SC Management

10 keys to global SCM success

Logistics automation

End-to-end visibility

Supplier portals and advance noticeTotal ID and regulatory complianceTransportation flexibilityVariability management

Integrated workflows

Integrated planning and executionFinancial SCM10

7

8

9

6

5

4

3

2

1 Delivered cost

Aligning SC Strategy with Corporate Strategy

Strategic planning Organizational design

Supply chain processes

Systems and technology

People

Goal

Chain

Supply

Supply chain metri

cs

Supply chain risk management strategies

Risks Risk Management Strategies

Transportation failures Redundant vehicles, modes, operators, etc.

Supplier failures Multiple suppliers

Climate change, weather Contingency planning (alternate sites, etc.), insurance

Licensing and regulation issues

Up-front and continuing research, good legal advice, compliance

Supply quality Careful supplier selection and monitoring; beware the low bid for crucial components

Loss of customers Service, product innovation, customer communication, constant prospecting

Theft and vandalism Insurance, security precautions, knowledge of likely risks, patent protection, etc.

Supply chain risk management prevention

Assess…• Transportation failures• Supplier failures• Climate, weather• Licensing, regulations• Supply quality, liability• Lost customers• Theft, vandalism, etc.

Balance risk management and cost.

Assess risks. Prepare for disruption.

Share risks among supply chain partners.

Balance…• Invest in supply chain

flexibility.• Have contingency plans.• Be insured.• Invest in security.

Prepare…• Do contingency

planning.• Go beyond extra supply.• Know best practices.• Plan for supplier loss.• Test and train.• Maintain information

flow.• Consider RFID, GPS, etc.

Share…• Work with partners.• Ensure reliable

roles.• Coordinate

response to crisis or problems.

Ipad 2Launching Affected By Japan Quake

The iPad 2 went on sale in the US on the day the tsumami struck Japan

the iPad 2's battery and memory are made in Japan.

iPad 2 internal compass provided by AKM Semiconductor and touchscreen components likely sourced from Asahi Glass Company

Issues in Apple's overseas supply chain

Ipad 2Launching Affected By Japan Quake - Impact

Apple faced difficulties meeting demand for its newly released iPad 2:(cause of the shortfall, might have been related to underestimated forecasting)

• Electrical shutdowns, disrupted transportation system and employees absenteeism.

• The shock and aftershocks factors made delivery of components a challenge.

• Suppliers faced difficulties getting raw materials shipped in and components shipped out

• Apple had also called off the iPad 2’s scheduled launch in Japan

Open Questions

Thank you