A Supply Chain Disruption Hits Ontario

I know what you're thinking. Another post on supply risk. This Busch character -- along with Mark Hillman, Tim Minahan, David Bush, Jim Lawton, Michael Lamoureux and others pundits -- are obsessed by a topic that up until now has only impacted a minority of organizations in recent years. But ignoring supply risk is simply not an option (unless you want it to bite you). That's because the potential for broader supply chain disruptions are very real today across the globe. And they're increasing everyday thanks to the combination of economic, trade, political, military, and even weather risks that seem to be hitting the newswire on the hour.

In late February, David Rotar shared an example of a supply disruption in Ontario, Canada, involving Imperial (Esso) oil. According to David, the summary of the story is that, "a couple of refinery fires to constrain production", the "winter closing of the St. Lawrence Seaway", and a "a rail strike to further limit distribution" all combined to create gasoline shortages in his province. "The result has been a 25% spike in retail prices for gasoline and 'dozens' of gas stations being closed due to lack of [supply]."

In my experience, supply risk shortages are usually based on a combination of avoidable and unavoidable factors. The avoidable include stocking adequate inventory given other risk factors in a supply region, maintaining visibility and controls into extended supply chain operations, and having ready-to-deploy supply risk management contingency plans already in place should a disruption or other risk appear imminent. Without a combination of these, when an unavoidable event (e.g., a weather disruption or labor strike) occurs, a supply disruption can strike anytime, anywhere.

- Jason Busch