By Rich Weissman
Line up 10 supply chain folks this morning and ask them their feeling on the recent Hanjin bankruptcy and the impact on their suppliers, and sadly I think you will get a blank look from half of them. The other half will be in a panic and rightly so. The collapse of the South Korean shipping giant has immediate and long-term ramifications on your supply chain. The problem is where those issues will manifest. Unless you have end-to-end supply chain visibility you may be up the proverbial creek without a paddle (metaphor acknowledged).
The big boxes know exactly what is trapped in the containers on those ghost ships and how it will impact their retail customers, especially with the important holiday shopping rush on our doorstep. The smaller industrial customers have less insight. Certainly their direct purchases shipped via Hanjin can be identified, but the ones to their tier 2, tier 3 or tier x suppliers are a bit murkier. I have a feeling that many a shortage meeting will have a familiar refrain that the parts their supplier needs are stranded on an Hanjin ship with no idea of when, or if, it will be unloaded. Look for the word “Hanjin” to take on a whole new meaning, and not a positive one.
Fortune Magazine had a recent article about the impact of the Hanjin bankruptcy. With thanks to them I will share some of the more glaring statistics:
For those who don’t pay much attention to logistics in their supply chain risk profile, here is a question:
Where is your freight this morning?
Also see the My Purchasing Center article, Will Hanjin's Bankruptcy Cause Freight Rates to Rise?
Endicott College Assistant Professor Rich Weissman teaches management courses for the School of Business and the Van Loan Graduate School. He is also the director of corporate education, which includes the Center for Leadership, Endicott’s management development institute. He is vice chair of the planning committee and also serves on the technology committee and the Institution Review Board. A practitioner turned educator, Weissman has more than 25 years of experience in all facets of procurement and supply chain management. He has held positions with large business units of Fortune 500 companies, medium-sized contract manufacturing companies, small venture-backed Internet startup firms, and third-party procurement, consulting and strategic sourcing firms.
Rich holds an M.S. in Management from Lesley University and a B.A. in Economics from Rutgers University. He is past president of the Purchasing Management Association of Boston and a recipient of the Harry J. Graham Memorial Award, the highest honor bestowed by the association.
Management of corporate maintenance, repair and operations (MRO) requires the tracking of thousands of SKUs and the generation of many transactions that are of low dollar value in nature. In most organizations, MRO spending amounts to less than Read More
No company is immune to software audits. Poor leverage with top software vendors, suppliers’ focus on audit income as a source of additional revenue, complex software contracts and licensing models, Read More
Millennials have an unwarranted reputation in the workforce as short-term employees always looking for a better opportunity, including in the supply chain management (SCM) work force. Read More
Staples Advantage is the one supplier that offers all the business solutions you need, all with the expertise of a specialty vendor. Read More
It started in 1972 with an idea, a new concept in distribution. Today, Digi-Key Corporation is one of the fastest-growing electronic component distributors in the World. The stimulus for this growth is Digi-Key's customer-centered business philosophy… Read More
Procurement and supply management leaders have a seat at the table, and management’s expectations are high. But what do CEOs really want, and is purchasing delivering on these expectations? This webcast looks at how procurement and supply management … Read More
At world-class companies, purchasing’s influence touches just about every area of spending. But, how exactly do procurement teams get to the point where other departments approach them for help with sourcing such indirect categories as human resource… Read More