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Mitigating Supply Chain Risks

China Foto Press

Mitigating Supply Chain Risks
Companies can take simple steps to reduce interruptions to supply chains during natural disasters
Dennis Bessant

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umerous natural disasters during the past decade—from earthquakes to hurricanes and typhoons—have shown that people around the world routinely underestimate, or simply ignore, the degree to which calamities can disrupt businesses and the supply chains on which they depend. China is certainly no exception. Already this year, the mainland has suffered some of the most devastating natural catastrophes it has seen in decades. A fierce winter cold snap in January and February spread heavy snow, sleet, and ice across the region, collapsing roofs, knocking out power, bursting pipes, and halting nearly every activity that requires transport during China’s busiest travel season. Several rounds of heavy spring rain submerged thriving farmlands, triggered landslides, and
26 September–October 2008 chinabusinessreview.com

flooded streets and homes, forcing the evacuation of millions. A massive earthquake shook Sichuan’s entire infrastructure, causing thousands of deaths and injuries and costing billions of dollars in monetary losses—mostly uninsured. And this summer’s typhoon season has battered the country’s coastline with several violent storms. It is a grim scene, but businesses—including suppliers—do not have to be entirely at the mercy of Mother Nature’s wrath. National codes and occupation standards exist to minimize the devastation caused by natural disasters, but merely following the guidelines is not enough to safeguard assets or protect a supply chain. Central regulations are typically issued by the PRC Ministry of Housing and Urban-Rural Development (formerly the Ministry of Construction) and the Administration of Quality Supervision, Inspection, and

F O C U S : S U P P LY C H A I N

Quarantine, as well as agencies such as the China Certain parts of China—such as areas near the Yangzi...