Of the unpredictable interruptions that impact a supply chain, weather events can be the most costly. A company with a plant, warehouse or suppliers in the path of hurricanes, tidal waves or forest fires is under immense pressure, reports Environmental Leader. Honda lost nearly $250 million after an assembly was inundated with water during flood events in Thailand in 2011.
While companies can only do so much to predict the weather, one organization is trying to quantify the risk faced by multinational corporations. The Notre Dame Global Adaptation Index is a new tool that executives can use to help assess the physical risk of climate change. The index helps organizations identify which countries are best prepared for climate interruptions. The tool is valuable to many companies with complex supply chains, including those in agriculture.
"To improve the resilience of our supply chains across the world, we need sound, scientific data and tools such as the Notre Dame Global Adaptation Index (ND-GAIN), which is critically important in researching a country's vulnerability to global climate risks," Dan Bena, PepsiCo senior director of Sustainable Development told Environmental Leader.
Predicting Supply Chain Interruptions With Data Collection
Even with the best tools and projections, the impact of weather events on a supply chain will always be conjecture at best. Dealing with Mother Nature is just a part business that organizations in the supply chain must deal with. However, improved data collection in the supply chain can help mitigate the delays caused by weather and other events.
With the ability to collect larger amounts of data in less time, supply chain managers are gaining a detailed and accurate look at how their companies operate. When a disaster strikes, organizations can predict what products and raw materials will be impacted, what options exist for secondary suppliers and if any items already in transit need to be replaced. It doesn't take a natural disaster to realize the benefits of these solutions either.
Automated data collection improves inventory control and worker efficiency on a daily basis. No matter how well things are running, the right analytical data provides information on how they could be improved. No tool provides a more quantitative look at supply chain operations than automated data collection systems that integrate with existing ERP systems.