Guest Blogger: Global Economy Affected by Natural Disasters

Dear Ms. Chapman,
It is a pleasure to have you as our guest blogger. This is a powerful example of disruptive change. I was touched by your story and inspired to think about this topic.
“There are two sides to supply chain risk management; risk assessment and mitigation, and responding to unanticipated supply chain disruptions.” Despite the best laid out pans disaster is never expected. However, a well laid out plan will help a community, an organization get back into a normal routine faster. Any company, community, school, any place where there are one or more people should have a risk management plan. We can consider risk management plans like we do our Wills. We consider a Will as a tool to use when we die, not IF we die. Therefore companies should weigh the costs and implement a plan because now that supply chains are longer, due to globalization, the damage and expense of a catastrophe is far more reaching than ever before.
A local aquarium that acquires fish from the Pacific experienced quite a disruption during the Tsunami, they never did recover.
May I say that you take a terrific picture!
Essential Characteristics of a Supply Chain Risk Management Strategy
http://www.kinaxis.com/whitepapers/Supply-Chain-Risk-Management-Strategy.cfm

How can future managers establish effective risk management to prepare and find the best investment options and alternative ways to maintain operations without interruptions?
Thank you Ms. Chapman for the article from the perspective of someone that was over in Japan when the tragedy occurred. It also reminds us that although we are back to everyday life, many there are not.
If in the situation as Japan, I have no idea how one could prepare for something of that magnitude. However, if a company relied on other locations for supplies, they must have a plan B in case disaster does strike. In order to prepare, it is imperative that a company have a business strategy. According to Gamble and Thompson, “management must have deliberate plans for addressing such issues as: changing economic and market conditions, distribution channels, development of alliances and joint ventures” (Gamble and Thomspon, 2011). By being aware of alternative suppliers, different distribution channels, and up to date on market conditions, one can adjust quicker if a misfortune fell.
Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

Thank you, Ms, Chapman for this article. Being on the outside of the disaster that struck Japan, it is “eye opening” to hear of an account from someone who was in the country at the time. It is hard to image what was going through the minds of the people in the country.
It is impossible to predict a disaster, such as, the one in Japan. Having a plan for a disaster doesn’t always mean that everything will be managed, because it is impossible to tell what will be affected in the industry, since there are many factors to consider. This is why it is important to work closely with business alliances to develop the best plans (Gamble and Thompson, 2011). This way, they can at least attempt to try and make the necessary precautions.
Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

Ms. Chapman,
Thank you so much for being our guest blogger this week. Your post has a very strong message to convey in more ways than one. I think most of us, oftentimes, take for granted how blessed we are. Disasters occur all too often, whether it is a natural or economic disaster, or a plot of terrorism. It is saddening to think about it, but companies do have to plan for means of continuing normal business through such times.
Most of the disasters are unpredictable, therefore harder to prepare for. However, a business can begin preparing by using scenarios to develop policies and procedures for the events if they occur. Strategic alliances could also be the building blocks for good risk management. Companies should not, as the old saying goes, “put all their eggs in one basket.” Gamble and Thompson state, “Strategic alliances are collaborative arrangements where two or more companies join forces to achieve mutually beneficial strategic outcomes” (p. 117). Companies need to know how they can utilize their resources around them and build collaborative and strategic partnerships with others to do so.
Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

Ms. Chapman,
We all thank you and appreciate you being here with us this week as a guest blogger. Reading your pist above brings a whole new perspective to me not only about the earthquake that took place in Japan but any other natural disaster that has occurred or will occur. Thompson and Gamble (2011) state “strategic alliances allow companies to correct particular resource gaps or deficiencies by partnering with other enterprises having the missing know how and capabilities” (p. 117). It would be ideal for situations like natural disasters if other producers could simply just increase their output to meet the immediate demands, but we do not live in a perfect world. Often times organizations are already running at maximum capacity. That being said, if organizations have strategic alliances specifically for when things like this happen it probably would help; however, I do understand that is less than ideal. The truth is that we do have a global economy so when natural disasters strike shortages are likely to take place in some form. The best that we can do is for everyone to pull together and offer support and help in fast and efficient manner.

Thank you for taking the time to be our guest blogger. I really enjoyed reading your post.
In an effort to establish effective risk management, companies that wish to expand need to think and act globally. According to Gamble and Thompson, Jr. (2011) “A think global, act global strategic theme prompts company managers to integrate and coordinate the company’s strategic moves worldwide and to expand into most if not all nations where there is significant buyer demand. It puts considerable strategic emphasis on building a global brand name and aggressively pursuing opportunities to transfer ideas, new products, and capabilities from one country to another.” If a company decides to expand globally, that company should consider more than one location. By doing this, they will still be able to maintain operations in other parts of the world if a disaster strikes in one of their locations. They can focus on rebuilding their site that was struck by disaster, while at the same time, maintains operations in other parts of the world.
Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

Thank you for your post. In the article “Learning to Live with Complexity,” Sargut and McGrath state that minimizing risk is crucial for anyone managing a system. They suggest the best way to do this is to “limit or even eliminate the need for accurate predictions.” In other words, the best investments are geared towards minimizing the importance of predictions. The more managers are involved in guessing the direction of a product line for example, or hoping that a design will be well received, the greater risk there is of being wrong. They state an example of Boeing’s very successful 777 aircraft series, where the company engaged eight major airlines in the development process and evolved the model designs according to customer input. Boeing is a great example of a company effectively reducing and managing risk.
Sargut, G., & McGrath, R. (2011). Learning To Live with Complexity. Harvard Business Review, 89(9), 68-76. Retrieved from EBSCOhost.

I found this blog to be both insightful and beneficial in addressing the overall impact distribution on an organization supply chain can have. I am currently working in the robotics industry and supply chain distribution is often an issue. Due to the uniqueness of our products we normally have one vendor for certain parts used in the assembly of our robots. This has had major implication on our ability to properly project production completion dates. For instances we recently were made aware that our one and only vendor would be discounting a part that is vital to the functionality of our units. Therefore is imperative for organizations to properly identified risk in the supply chain and develop continuance plans that will mitigate such risk.
References:
Effective risk oversight begins with triage. (2009, May 15). Retrieved from http://www.businessweek.com/managing/content/may2009/ca20090515_262397.htm

The topic of crisis management instantly brought me back to my days as a soldier conducting missions. Before each mission we would always have an extremely detailed operations plan and numerous rehearsals and then a 5 point contingency plan detailing the specific actions for a certain circumstance and how to execute the plan from that point on. The reality was that these contingency plans were extremely brief and in an actual contingency the after action review statements were always ” I wish we spent more time on the contingency plan”. This became paramount for a paradigm shift in the time allotted for contingency planning.This applies to business also, as stated by Sheri Veil “When an organization becomes overconfident
in its processes, it expects success and opens itself to crisis that could be avoided if the organization was more attentive to potential failure rather than present success”. Many organizations haven’t dealt with crisis and when it happens many do not recover. It is a leadership challenge to focus on the “what if’s” instead of the “how to’s” because most leaders are naturally interested in the “here and now”. Thank you for your blog topic.

During my time in the military, I remember being sick and tired of the weekly and never ending disaster drills we were subjected to. I guess, disaster preparation can seem annoying and monotonous, yet it will pay in dividends when a real disaster occurs.
Leaders and managers have the very difficult job of developing the vision to anticipate calamities and prepare accordingly. Learning from past experiences I believe is a very useful approach. Leaders who study and learn from others’ mistakes are ahead of the game. Once the possible complications are foreseen, constant and repetitive training is required to ensure the Pavlovian effect of conditioning.
Similarly, the financial preparations to upbeat operational stoppage takes much homework and fund storage. Customers will expect their products regardless of what is going on around the world. If your competitors are better equipped to overcome obstacles or disasters, they will inherit your market and leave the unprepared in the dust.

Ms. Chapman ,
Thank you for being our guest blogger this week and providing a firsthand testimony of the tragedy that hit Japan. I currently work as an engineer in the recreational boat industry for Brunswick Corporation, and at the manufacturing level we have experienced issues with supply chain distribution. Unlike several of our competitors who relied on engine and electronic components from Japan, we were not as severely impacted by the disaster. On the other hand the economic debacle of 2008 is still causing problems with acquiring certain specialty components. Many of the domestic supplies of marine products soon went out of business at the beginning of the recession, which caused a void for certain accessories and hardware that is normally found on boats. After this incident we are using more multiple suppliers for certain key products, however this is an after effect solution to the problem.
The key to supply chain distribution and most all elements of business is planning through building strategies based on different possible scenarios of events. This technique is often referred to as Scenario Planning. Scenario planning is a disciplined methodology for imagining possible futures and or events in which organizational decisions are applied then how the outcome of those decisions may be played out (Schoemaker, 1995). By using Scenario Planning an organization can have a plan in places for the majority of predictable and unpredictable events. Unfortunately only very few companies practice in-depth Scenario planning as a tool to build strategies for suitability. Too often they become complacent on analyzing past data and current situations not the what-ifs that may occur. According to Gamble and Thompson, “management must have deliberate plans for addressing such issues as: changing economic and market conditions, distribution channels, development of alliances and joint ventures” (Gamble and Thomspon, 2011). Scenario Planning is a great way that management can create and prepare for such issues.
Chermack, T. J., & Payne, T. D. (2006). Process Level Scenario Planning. AllBusiness.com. Retrieved October 21, 2011, from http://www.allbusiness.com/company-activities-management/management/13439585-1.html
Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management. New York, NY: McGraw-Hill / Irwin.
Mercury marine not affected by supply shortages from Japan. (2011, April 5). Trade Only Today. Retrieved October 20, 2011, from http://www.tradeonlytoday.com/home/510808-mercury-not-affected-by-supply-shortages-from-japan
Morahan, C. (2011, April 13). OPINION: How Japan will affect our supplies. Trade Only Today. Retrieved October 20, 2011, from http://www.tradeonlytoday.com/home/511023-opinion-how-japan-will-affect-our-supplies
Schoemaker, P. J. H. (1995, Winter). Scenario Planning: A Tool fo Strategic Thinking. Sloan Management Review, 36(2), 25-40. Retrieved October 21, 2011, from http://www.favaneves.org/arquivos/scenarioplanning.pdf

Risk is something that is inherent in today’s business climate.  The amount of risk that is taken, and mitigation of that risk, in business is an important factor in development of the company’s overall business strategy.  Following the terrible hail storm which Knoxville suffered  this past April we found how unprepared my family was for prolonged power outages and just how susceptible to natural disasters this area of the country, which rarely sees anything of that magnitude, really was.  I’m not insinuating the little hail storm here was anywhere near that of the earthquake and following devastation that was seen in Japan – I’m simply making a point.  In the preparedness and survivalist community there are people who make it their life’s work to be prepared for any and all contingencies.  However, one of the first things they will tell you is that you can not be prepared for everything.  This holds true in business as well.  You can plan and stockpile those things that might help you survive, but in the end it will be something you didn’t plan for that will cause the biggest problems.  Forming a strategy for business should take into account as many of the things you can plan for as it can, as well as attempting to plan for those things you can’t foresee.
Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

You speak with so many points, so much essence, although I become aware that you have expressly hit the nail on the head. Well done! I will straightly grab your rss feed to stay abreast of every updates. Real work and much success in your business efforts!

During my time in the military, I remember being sick and tired of the weekly and never ending disaster drills we were subjected to. I guess, disaster preparation can seem annoying and monotonous, yet it will pay in dividends when a real disaster occurs.
Leaders and managers have the very difficult job of developing the vision to anticipate calamities and prepare accordingly. Applying past experiences I believe is the best approach. Leaders who study and learn from others’ mistakes are ahead of the game. Once the possible complications are foreseen, constant and repetitive training is required to ensure the Pavlovian effect of conditioning.
Similarly, the financial preparations to upbeat operational stoppage takes much homework and fund storage. Customers will expect their products regardless of what is going on around the world. If your competitors are better equipped to overcome obstacles, they will inherit your market and leave the unprepared in the dust. Corporations that foresee market fluctuations and plan accordingly often times consider conquering new frontiers to diversify their risks. “A company spreads business risk by operating in a number of different foreign countries rather than depending entirely on operations in its domestic market” (Gamble & Thomson, p.137).
Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

KEEP 194 WORDS INITIAL 12/6/11(original post 10/19/11)Dear Ms. Chapman,
It is a pleasure to have you blogging with us. This is a powerful example of disruptive change. I was touched by your story and inspired to think about this topic.
“There are two sides to supply chain risk management; risk assessment and mitigation, and responding to unanticipated supply chain disruptions.” Despite the best laid out pans disaster is never expected. However, a well laid out plan will help a community, an organization get back into a normal routine faster. Any company, community, school, any place where there are one or more people should have a risk management plan. We can consider risk management plans like we do our Wills. We consider a Will as a tool to use when we die, not IF we die. Therefore companies should weigh the costs and implement a plan because now that supply chains are longer, due to globalization, the damage and expense of a catastrophe is far more reaching than ever before.
A local aquarium that acquires fish from the Pacific experienced quite a disruption during the Tsunami, they never did recover.
Essential Characteristics of a Supply Chain Risk Management Strategy
http://www.kinaxis.com/whitepapers/Supply-Chain-Risk-Management-Strategy.cfm