Fuel-Barge Explosion In Alabama Raises Supply Chain Questions
Supply Chain Questions Follow Crisis Events
By John P. Campi, Managing Partner, Genesis Management
Firefighters on Thursday 4/25/3013 extinguished a huge blaze that erupted hours earlier when two fuel barges exploded in Mobile, Ala., leaving three people with critical burns and forcing the evacuation of crew from a nearby cruise ship.
A friend of mine has a great saying “the last time a surprise was good, I was five years old and it was my birthday.”
So on the evening of April 24th, we got a surprise impact to one of the important supply chain links for many organizations. The port of Mobile was closed due to a massive explosion and fire on a barge in the river.
This is just one more example of the vulnerability of critical elements of today’s supply chains. Our dependency on these links has increased dramatically as we have expanded our supply networks over the past decade or so. Companies must focus on enhancing their understanding of the risk elements of supply networks and their ability to manage through a network disruption without the event becoming a major business interruption resulting in a negative impact in the market place.
Supply chain risks, especially in the supplier networks, is of increasing concern to management boards and investment institutions. It is no longer just a matter of understanding the financial stability of a tier one supplier, but of understanding the various elements of risk within the entire network and at all levels within the network. There exists a tremendous amount of confusion and many illusions within organizations today regarding supply chain risk.
The virtual lack of visibility into the supply network has created an atmosphere of uncertainty that is only realized when a catastrophic event takes place. Proof of this is evident in a national survey taken in 2012, conducted jointly by Genesis Management, LLC and Firestorm, but more importantly demonstrated by the impact of specific events such as the earthquake and tsunami in Japan a few years ago and other similar unanticipated events.
Potential solutions are only now being investigated and will take years to develop and bring to market. However, companies can do much today that will enable them to blunt the potential impact to these surprises within their supply networks. Genesis Management and Firestorm are actively engaged in building these solutions for our clients.
About John P. Campi: John P. Campi is the founder and Managing Partner for Genesis Management, LLC, an organization specializing in supply chain and cost management initiatives. Previously, he served as Executive Vice President and Chief Procurement Officer of Global Sourcing for Chrysler LLC where he was responsible for all worldwide purchasing and supplier quality activities.
Mr. Campi has extensive experience in the field of cost management and is recognized as a founder of the strategic cost-management discipline known as Activity-Based Cost Management. Before joining Chrysler, he served as the Senior Vice President of Sourcing and Vendor Management for The Home Depot where he led the drive for standardization and optimization of The Home Depot Global Supply Chain. Prior to joining The Home Depot, he served as Vice President and Chief Procurement Officer for Du Pont Global Sourcing and Logistics. Previous to joining DuPont…More