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June 24, 2013

The Supply Chain After the Disaster

When disaster planning for the supply chain, people rarely talk about what happens when parts and devices are damaged but not ruined. However, in the aftermath of the Japanese earthquake and tsunami, the Thailand floods, and the hurricanes and tornadoes in the US, it's high time for this conversation to start happening in a big way.

Reverse logistics and repair are crucial parts of disaster recovery efforts. Fortune 500 electronics manufacturers will have to rebuild production equipment. Individual consumers will want their under-warranty cars, laptops, and phone replaced. Third-party vendors will be salvaging and reselling scrapped parts.

Let's take Hurricane Sandy, just because it's still fresh in many people's minds. In February, the National Insurance Crime Bureau raised its estimate for the number of vehicles damaged by the storm to 250,500. That number is still based on preliminary figures and could change as more insurance claims are processed. Many of those cars have been cleaned up and may be back on the market under the "good but previously damaged" label. Many others have turned up without such a label.

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