A Resilient Logistics

Topics: Management, Supply chain management, Logistics Pages: 5 (1626 words) Published: September 18, 2013
Introduction: Business transportation is usually required transport products in the right time, to the right place and use right way which should be efficiently and effectively. However, there always have some unexpected disruptions in supply chain management. For example, there are natural disasters such as earthquake and flood, some disruptions by human such as terrorist attacks and also normal trade-off problems such as labour disputes and traffic congestion. Therefore, willing to get an efficient supply chain, a resilient logistics would be created and developed. According to Sheffi and Rice Jr (2005, p41) indicates that a resilient enterprise could create redundancy or increasing flexibility which could increase company competitiveness. A resilient logistics usually could do a fast response when accidents happen and help to decreasing lose. Through realizing what is risk management to understand a resilient logistics can overcome these unexpected disruptions. Method & result: Risk management used to be explained of some decision-making management could threaten company’s routine or even influence whole company’s destiny. Christopher and Peck (2004, p4) indicated that supply chain risks should be categorized into three parts: internal to the firm (process, control), external to the firm but internal to the supply chain network (demand, supply) and external to the network (environmental). Meanwhile, the three parts are affected each other to threat company routine operation. There are some methods to increasing resilient of a company in supply chain management. At beginning, a company should clearly understand its supply chain characteristics in different components, supply and demand. Knowing oneself is the fundamental for increasing resilience. Therefore, solution to solving problems could be established easily when accidents happen. Supply chain characteristics could be classified into four components: Firstly, product characteristics which include quality requirements, storage requirements, and life cycle stage and so on. Secondly, process/technology characteristics such as number of different production steps, special resources or facilities requirements. Thirdly, demand which comprise volume, demand variability. Finally, supply such as number of available suppliers, capacity of response for extra orders. Preparing extra orders from suppliers can avoid and decrease risk of stockouts or other accidents and meanwhile, more orders can increase supply chain flexibility when there is disruption. There is an example of Nokia; thunderstorms caused a small fire in the Phillips Semiconductor plant. The Nokia management rapidly realized that the disrupted supplies could affect 5% of their annual production. Immediate changes in chain configuration, in control structure and strong leadership allowed a quick mitigation of negative effects. In opposition, Ericsson ignored the impact of the disruption, and faced a serious parts shortage provoking hugest losses (Bayraksan et al 2007, p189). In this example, it clearly expresses that control structure; chain configuration could be readjusted in order to make the supply chain more resilient due to supply chain inherent characteristics. Postponement is another way to reduce risk and uncertainty cost relating to highly changeable demands by delaying the creation of time, place, form and possession utilities. Designing products and processes for maximum postponement of as many operations and decisions as possible in the supply chain. Postponement is about delaying processing or distributing activities until precise customer order information becomes available (Yang & Yang 2010, p1902). Products designed and produced is a process and in the long process many disruptions could be happen such as change design or customer demand. Therefore, postponement management give these disruptions more time and opportunities to recover or change until customer’s order have received. For...

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