The Effect of Natural Disasters within Supply Chain Management
Supply chains around the United States have been distressed by a series of unforeseen events such as volcanoes, hurricanes and developments which resulted in a deflation of economic supplies. Scientists have revealed that with increased complexity of supply chains, they are likely to be interrupted in myriad ways by natural disasters (Braithwaite and Martin, 2015). Moreover, limited visibility also poses a challenge for supply chain because it is very difficult to predict or project occurrence of natural disasters. Examples of recent natural disaster that have occurred in United States include an earthquake of magnitude 2.9 that shook Concord, New Hampshire, flooding that was experienced in Monroe, Louisiana that destroyed property. Consequently, an earthquake of magnitude 3.0 shook Livermore city of California and disrupted human activities.
Studies have confirmed that earthquakes cause major disruptions of supply chain disruptions in many sectors of the companies, especially companies that rely on transport and other communication infrastructure to facilitate supply of raw materials and distribution of finished products to services (Christopher and Tatham, 2011). It has been established that natural disasters impact negatively on business operations all over the world (Shah, 2009). For instance, Japan that boasts of industrial sophistication is often constrained by shortages of chemicals to drive major components of manufacturing process. These industries tend to find alternative materials to drive the operations in situations that supply chain distribution is interrupted. Such events prompt many companies to reevaluate their potential supply chains to ascertain whether there are certain hidden risks that may affect supply chain management. Notably, economists opine that it is important for companies and business enterprises to put in place measures aimed at preventing disruptions of supply chains so as to prevent loss of revenues (Waters and Chartered Institute of Logistics and Transport in the UK, 2007). This will ensure sustenance of supply chains in different sectors of economy.
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