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SUPPLY CHAIN VULNERABILITY
Executive Report
On Behalf of:
Department for Transport,
Local Government and the Regions
Home Office
Department of Trade and Industry
January 2002
SUPPLY CHAIN VULNERABILITY
Introduction
Modern supply chains are very complex, with many parallel physical and information
flows occurring in order to ensure that products are delivered in the right quantities, to the
right place in a cost effective manner. In fact, supply networks may be a more accurate
term than supply chains. In this brochure the terms supply chains and supply networks
are used with the same meaning.
The shift towards leaner supply networks during recent years has resulted in these
networks becoming more vulnerable. In particular, there often tends to be very little
inventory in the system to “buffer” any interruptions in supply and, therefore, any
disruptions can have a rapid impact on the supply network.
These disruptions can arise from a number of sources, for example:
• natural disasters (e.g. the Kobe earthquake, which affected supply networks across the
globe, or, more recently, foot and mouth disease, which has affected the livestock
haulage industry, the tourist industry, etc);
• terrorist incidents (e.g. events in the USA on 11th September 2001)
• industrial or direct action (e.g. the fuel price protest of September 2000, which very
rapidly impacted on almost every supply network in the U.K.);
• accidents (e.g. a fire in a component supplier can have such a serious impact on
manufacture that they are forced to shut down operations, such as Toyota in 1997 –
due to problems at its supplier of brake-pressure proportioning valves);
• operational difficulties (e.g. production or supply problems at one supplier can impact
every organisation in the supply netw
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