Last Friday was no ordinary day for Chip Starnes, the 42 year old factory owner of Specialty Medical Supplies in China. He recently announced movement of some of the production of their diabetes testing equipment from Beijing to Mumbai India. Of the 110 employees at the facility, about 80 protested by blocking the doors and refusing to let Chip Starnes out of the facility. He has been trapped in his office several days now. The employees think the factory was closing but Mr. Starnes said it was not. Mis-information? Poor communications? Work-stoppage.
This is a good example of supply chain disruption. Parked cars are blocking the entrance to the facility, front gates are chained close, the CEO a prisoner in his own factory. Chip Starnes was presented with documents to sign in Chinese indicating he would pay severance and other demands he did not understand, possibly bankrupting the company.
If you depend on supply from China and other foreign suppliers, how reliable are your sources? For example how are the shopfloor employee relations? Is it possible to predict these types of HR risks and plan around them? What are your contingencies?
It's important to ask the right questions and hear good answers. Having tools in place to rapidly evaluate, assess and react to these disruptions are the keys to survival. Hear how leading organizations are reinforcing their supply chains and mitigating risk through technology with Oracle's latest release of Oracle Supply Chain Management.
Source: WSJ pg.B1, June 25, 2013