"Companies must be careful in avoiding an over reaction and over compensating with a second supply, as this will add more disruption to the chain."
TIM LAWRENCE, SUPPLY CHAIN CONSULTING, PA CONSULTING GROUP
PA’s Tim Lawrence, supply chain expert, contributed to the Financial Times ‘The Connected Business’ April podcast. The podcast looks at how the global supply chain has been impacted by the disaster in Japan and the actions companies need to take to manage the risk across their supply chains.
Tim comments on the challenges of sourcing components following the disaster. According to Tim, the need to manage disruption across ever more complicated supply chains is of growing concern to manufacturers.
Tim says: “The biggest disruption in the short term is in the automotive and electronics sectors. The reason for this is that Japan has a high share of key components for these types of products, for example LCDs, silicone wafers, car navigation systems or polarisers for batteries. They have more than 50 per cent of the global capacity.” Tim goes on to point out that the delay will be weeks rather than months.
Tim also gives his view on how companies can mitigate risks to their supply chain. Tim says: “They must be careful in avoiding an over reaction and over compensating with a second supply, as this will add more disruption to the chain. They need to get to grips with the changing dynamic of the current situation.”
Tim goes on to comment on whether large companies will take precedence with their customers, and if there will be a bigger impact on some of the smaller companies.
You can listen to the podcast in full here. Tim is interviewed as part of the 'Data-driven HR' podcast. Tim's interview starts 50 seconds into the podcast.