UPDATED:: Quake in Japan illustrated fragility of “Global Supply Chain” & flaws in conventional “wisdom”

Business continuity planning life cycle

Business continuity planning life cycle (Photo credit: Wikipedia)

The case for a Company to maintain a current and comprehensive Business Continuity Plan does not come much better than this example from HP!

Modern global supply chains, experts say, mirror complex biological systems like the human body in many ways. They can be remarkably resilient and self-healing, yet at times quite vulnerable to some specific, seemingly small weakness — as if a tiny tear in a crucial artery were to cause someone to suffer heart failure.

via Quake in Japan Broke a Link in Global Supply Chain – NYTimes.com

Of course EVERYONE hopes that they never have to contend with what the Japanese nation have had to live through. But, at a time in the history of our planet, when the impact of events on the other side of the planet have truly global repercussions, “HOPE” isn’t much of a strategy! 

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The supply chain disappointment – Insurance Insight

As supply chain risks rise up the agenda for businesses, there is clearly an opportunity for insurers to step in with up-to-the-minute solutions that respond to new challenges. Dequae believes while the risks have changed, “the insurance solutions have not really adapted to the changes in the supply chains”. She points, in particular, to the need for innovation when it comes to “more coverage and capacity”, as well as broader conditions and “coverage at acceptable prices”.

via The supply chain disappointment – Insurance Insight.

I have become used to some of my more “critical” comments not making it past moderators who are overly-sensitive to the potential for political repercussions.  So here it is:

supply_chain_diagramAnyone who has given the subject matter some thought knows, broadly, what the problems are. Some even know of available solutions. But NONE have acted to seize the competitive advantage that “embedding” solutions as part of their proposition! Read more of this post

Survey confirms concerns with supply chain insurance | FERMA

Future supply chainThis is a topic that has occupied much of my thinking (and writing) in recent years and I am still not convinced that the scale and nature of the risks are fully understood. NOW must be the time for another smart insurer (FM Global have already acted) to respond to their customers’ stated needs!

Global logistics (and reverse logistics) have changed dramatically in the last decade and further changes with considerable insurance implications are predicted for the next 5 years. THE opportunity exists NOW, to address a major and growing problem for fragile global business networks in these uncertain times and in the, hopefully, less volatile times ahead.


By embedding Ontonix "Complexity & Resilience risk technology" within Supply Chain solutions, that:

– extends the risk horizon into the Corporate ecosystem by analysing the structure in information within system (network) data

– enables rapid and regular measurement of the "health" of the system

– identifies areas of risk at source

enables the business owners to become “Risk Leaders”: measure; map; mitigate; manage; monitor, system complexity and resilience to:

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Global Supply Chain fragility [Procurement Intelligence Unit]

English: Risk Management road sign

Image via Wikipedia

Back in 1776 Adam Smith wrote about the “specialisation of labour” and, like complexity, this brings enormous benefit to an organisation (or in this case of a nation) BUT the old adage about “too much of a good thing” holds true.

Improved productivity is the holy grail for most CxO’s but, without frequent scanning of the ecosystem (upon which the organisation is reliant), careful measurement and management, the point at which the benefits of specialisation turn negative can, suddenly and unexpectedly, be reached: at Ontonix we talk in terms of “critical complexity“.

Although labour specialisation can increase productivity, overemphasis on the division of labour/product/market would result in overspecialisation. Pashke (2004) explains that the overspecialisation of labour has the tendency to restrict communication between the various areas of (work) expertise and the general public. This then would ensue in communication gaps appearing within and outside the organisation: specialised knowledge becomes exclusive.

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Ontonix: KPI’s and the "Supply Chain"

Project 365 #237: 250809 Fingers Crossed!

Image by comedy_nose via Flickr

Supply Chain vulnerability has not been more graphically illustrated than it has been by a succession of nature disasters and Geo-political upheaval experienced in recent times. We are all paying a price…some considerably higher than others! The question is: “What will we learn from devastating floods, earthquakes and tsunamis?”

Whilst, in our busy lives, we cannot afford to pause for long to consider the devastation and loss suffered by so many, we cannot ignore the lessons that these events teach us as individuals, families, communities and nations.

From a business perspective we cannot overlook the simple truth that, although we have become very good at identifying and managing risk, without preparation, our whole way of life and much of what we take for granted can be destroyed in minutes by “rare events” AND natural disasters.

In modern business there are so many activities that require to be closely monitored that the task, in itself, can create even greater uncertainty unless simplified. That is what we, at Ontonix, attempt to create for our clients…

Specific KPI can be defined for Marketing, IT, Sales, production, etc. The problem, in any event, appears to be a subjective one, namely that of choosing the right parameters and, most importantly, understanding the business well. In KPI definition the so-called intangibles are avoided since they cannot be measured.

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