(52a) How Catastrophic Events Have Served to Build Resilience and Shapes our Organizations, our Process Safety, and our Supply Chains.

Summary of presentation: There was one learning event that occurred 2011, a learning event that has been studied by many supplies chain and business school since. An event unanticipated and unavoidable – but wreaked havoc around the world. A wake-up call for supply chain professionals. The earthquake and consequent tsunami that rocked the small region of the Japanese near the city of Sendai, killing 25,000 people. This catastrophic incident is best known for the shortage of “Tuxedo Black” auto paint that impacted global operations of giants like Ford, Chrysler, Toyota, and General Motors, who were solely sourced by a small operation in this devasted region. An estimated 450,000 vehicles were halted in production. This region also manufactured electronic components, and automotive polymers which cascaded the impact in the automotive industry. “Any color but black” was the tagline of car salesman around the globe, and the auto industry learned a valuable lesson of how a very small third tier supplier misfortune could bring devastating financial impacts for some of the largest companies in the world.

These past few years we have experience war, waves of pandemic, Texas freeze, floods, fires, labor shortages, and what seems like so much more.

Through these challenging catastrophic events, organizations have learned, and refined, and adapted their business processes and supply chains to be much more resilient.

Although every organization is unique, some of the common responses have been:

• Building redundancy in supply base
• Building redundancy in regions sourced
• Better inventory visibility in supply chain
• Information technology and enhance visibility of inventory across the supply chain

Other responses have included:

• Multi-disciplinary crisis team – connecting suppliers to customer needs
• Increased transparency throughout the supply chain
• Advent of the facility “first responder teams” – that access damage immediately and implement recovery plans following the crisis event
• Force majeure situation, and contract clause that address specific protocol in crisis

Conclusions: Following the devastation of the 2011 Japanese earthquake and tsunami, very few organizations outside the auto industry altered their processes and supply chain strategies. Since 2020 every organization have been impacted by waves of unforeseen crisis, and the frequency of global crisis is increasing. No organization is excluded from outside events that have and will continue to impact business continuity. The important lesson for companies to realize, a resilient supply chain is an incredibly powerful risk mitigator for handling adverse process safety events – A critical safeguard in weathering the constant threat of global crisis.