Project Aims to Improve Supply Chain Continuity

Researchers at MIT say they've found the reason why some companies are better than others at dealing with sudden supply chain disruptions caused by natural disasters, acts of terrorism or other unforeseen catastrophes.

According to an article in the August 2004 issue of DC Velocity magazine, the three-year research project at MIT's Center for Transportation and Logistics aims to identify what divides the more resilient companies from their counterparts. Often, it is nothing more than a corporate commitment to contingency planning, Yossi Sheffi, an MIT professor who's leading the project, told the magazine. "Many times, the issue is cultural - making sure that damage control is built in to the very fabric of the organization," he says.

The article cites the case of cell phone manufacturer Nokia as an example of this corporate commitment. A few years ago, a fire at a large computer chip supplier threatened to halt Nokia's phone product. The company reacted quickly and found an alternate supplier. Competitor Ericsson reacted more slowly and today is no longer in the cell phone business, the article says.

The MIT project credits Nokia's culture of openness as the reason for its quick recovery. The corporate culture was open enough to allow the company to quickly communicate the bad news throughout the company. The company was also organizationally well-prepared for supply chain interruptions, says Sheffi.

To read the full article in DC Velocity, click here: http://www.dcvelocity.com/articles/august2004/news.cfm

For more information on the MIT research project, click here: http://web.mit.edu/newsoffice/2004/supply.html.