Thursday, March 31, 2011

Thursday 3/31/11

Tonight we had our normal class but Swinder asked Dr. Clay Whybark from the University of North Carolina to come and speak to us. The speech topic was "Managing Humanitarian Global Supply Chains." It was a really interesting speech and he definitely liked to get the audience involved in the speech. He talked to us about how humanitarian disasters create unique supply chain challenges and effective supply chain managers will anticipate and respond to these changes.

One of the main examples we talked about was how the disaster in Japan exceeded our idea of what could happen in a natural disaster. It is a human and supply chain tragedy and it is affecting the entire world, including the United States. People in California are starting to panic because the radiation in the milk was higher than it is supposed to be. Milk is flying off the shelves because people anticipate it to get a lot worse. Every country is starting to panic and re-evaluate their nuclear energy plants to avoid disaster.

There have also been huge donations since the tragedy. One interesting idea was the fact that more international students gave blood at the blood drive at K-State than in the past and many think it's because of the Japan tragedy. Many companies, including Honda, have had to shut down and rework their supply chains because of what happened.

The intensity and frequency of disasters is increasing. There's a diversity of people getting involved, including non-government organizations (Red Cross, Salvation Army, etc.) who must get permission before going into a country, government organizations, private corporations, and regular people. Private corporations have started to think of things before the events occur. They know they'll have to provide capacity during an international disaster so they want to be well prepared. One of the problems is with individuals contributing. Many people are sending different things, like old blankets, furniture, etc. when really they just need money. The money can be used in the local markets and help things get back on track. Organizations don't necessarily want to use their capacity to deliver items that the people don't necessarily need.

There's also some tension between different groups. When individuals get more press, organizations like the Red Cross tend to get upset because they want more press time and get people to donate to their organization. We also discussed the unintended consequences of our actions and how you have to reverse logistics to think about the supply chain. Safety and security is also an important factor. Terrorism, bribery, and war are big issues as well as container inspections, which delay the supply chain time. Pirates have also become a huge problem. They choose targets with few people on the ships that are in the middle of the ocean and the protective vessels are slow to respond. We have to think of solutions to these problems.

There are also some resource limitations, especially with oil, that are affecting the world. It is $106/barrel now. Some ships are starting to sail at half speed in order to save fuel, but that affects the supply chain because it takes longer. More human talent is needed for supply chain management especially in the engineering field.

There have been some responses to these problems. These include sailboats, trains, trucks, etc. which are tactical approaches. The US needs to focus on adding value during transit. Only the illegal drug industry is really doing that now, and we used to do it but now we aren't. Why? We also need to take strategic approaches which include looking for low cost labor, increasing your presence in other countries, and exploring new options.

The speech was great and I was so happy to see all of my classmates again! After 10 days together, it felt like a lifetime since I had seen them!

Til next time,

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