There was an interesting study released by EventWatch highlighting the top 5 supply chain disrupting events of 2016. EventWatch monitors supply chain resiliency and found these five single events to cost the most in delays, disruptions, and risk. Here’s their list:

  1. 6.4 magnitude earthquake in Taiwan
  2. Series of earthquakes in Japan through April
  3. Super Typhoon Haima
  4. Typhoon Napartak
  5. Typhoon Medi

Earthquakes provide some of the most difficult Black Swan events for businesses and their supply chain continuity. Many manufacturers of high-tech products have tolerances on their production equipment that are calibrated to within a micron.

When a tremor or small earthquake hits, those machines have to be recalibrated (small recalibrations can take minutes, larger ones can take hours). After a major earthquake, it isn’t uncommon for aftershocks to last months or a year or more. After the major 2011 earthquake and tsunami in Japan, more than 5,000 aftershocks occurred for 12 months of a magnitude 2 or greater. Therefore, the need to constantly recalibrate machines and keep them in cycle is difficult – and assembly lines can suffer significant delays and set-backs, even if the tremors themselves don’t do any damage.

Typhoons are slightly different. There’s a fairly defined season for them and regions prone to strong storms have prepared for them (especially for large multi-national corporations that have been in the region for a while). Although disruptive, recovery is often swift and supply chain continuity can remain intact.

Source: Armada Corporate Intelligence