A cargo spill can cause more than a mess — it can delay shipments, raise safety concerns and disrupt the supply chain. In this Supply Chain Byte, Lisa Anderson breaks down how to plan for the unexpected, coordinate with partners and adjust plans through SIOP to minimize disruption.

Around seventy-five containers fell off a vessel in Pier G at the Port of Long Beach. The vessel, Mississippi, came from China. As some of the straps were released, containers started to fall into the water and the nearby barge. A cross-functional response team from the U.S. Coast Guard, Long Beach Fire, Police, Port Authority, and Army Corps is working on the cleanup. After a week, around 50% has been cleaned up, yet the cause is unknown.

What Are the Supply Chain Impacts?
Pier 8 suspended operations as the spill is cleaned up.  These types of incidents can cause backlog, re-routing, demurrage, and lost goods. In this situation, it was isolated to 75 containers, yet it highlights the exposure in the supply chain. You are only as strong as your weakest link in your supply chain. With today’s global supply chains, there are countless disruptions that could occur such as weather events, geopolitical risks, strikes, and accidents. The forward-looking companies are thinking ahead.

What Should Companies Do?
There are many items you can do to mitigate and proactively address risks. For example, you should have multiple options for ports and carriers. Ensure you have flexible carrier agreements and the appropriate level of cargo insurance. Companies are pursuing regional supply chains to reduce exposure to risks in the end-to-end supply chain. In addition, they are ensuring supply chain visibility of the end-to-end supply chain so that they can be resilient and agile with changing conditions and disruptions. Contingency plans and what if scenarios are a must.

Focusing on SIOP (sales inventory operations planning) and inventory strategy are important steps companies can take to address risk and proactively optimize their supply chain. Disruptions have become the new normal, and so smart companies will take the forward-looking approach and think about inventory strategy, pre-positioning of inventory and capacity, how to scale capacity rapidly (with flexible teams and advanced technologies), proactively evaluating what-if scenarios, and reviewing their supply chain network with the SIOP process. To learn more about how to roll out SIOP, download our complimentary eBook. 

What Are the Supply Chain Impacts?
Advanced Planning Strategies to Optimize Manufacturing Success