The Butterfly Effect on Global Business as we sometimes hear in the poetic notion, the butterfly wings’ flapping and fluttering in Brazil can result in hurricane force winds hitting Mexico. This “butterfly effect” (part of the chaos theory portfolio) is certainly relevant in this situation. In this case, it was strong winds and a sandstorm, but you get the picture.
And it’s not just the cargo in the estimated 20,000 metal boxes that is affected. It’s the hundreds of cargo vessels that are stranded mid-trip either side of the vessel. And if you drill down a level on what is being carried on one these vessels, and how long the wait or a re-route of the shipment will take, additional challenges emerge.
Let’s say we have a time sensitive shipment of electronics from Asia that are scheduled to arrive in Europe to coincide with a launch of a new product line. A reroute around Africa’s Cape of Good Hope can add 6,000 miles and 10 to 15 days to their voyages. The alternative of flying a new shipment would have significant cost implications.
Obviously, there is no magic answer to the problem. It was an unforeseen, and highly unpredictable event.
In this case the key is what companies can do to minimize the impact to their planned manufacturing and sales campaigns.
Here are a few examples:
Visibility through all tiers of your business networkIn a global and complex supply chain, the need for visibility is critical. As all times, and especially in a crisis you need to be able to see:
Agility to sense, predict and respond to changeOnce you have identified a risk, you must assess the best course of action and act in short order. Examples include:
Resiliency to minimize and mitigate riskIt is also critical to design your supply chain to withstand disruptions and respond to business opportunities. This requires having processes and plans in place to:
Without a doubt, unexpected disruptions will continue to occur. The cause of disruption will vary depending on the event, such as pandemics, geopolitical or trade conflicts, natural disasters, limited natural resources availability, and now, blocked canals.
Now more than ever, supply chains need to be resilient and agile to survive in the current global environment, while demonstrating the predictive intelligence and visibility to thrive in the new normal.
This article was originally published on Forbes.com and is authored by Richard Howells.