The Tsunami

While the human costs of the tsunami have been difficult to comprehend, the majority of experts agree that the Spend Management and trade disruptions have been isolated to specific regions. The hardest hit areas in Thailand, Indonesia and Sri Lanka had only a few export industries, and outbound supply disruptions have only impacted a handful of categories including textiles and tea. According to the Los Angeles Times, “small businesses are especially hard hit, but the tsunami missed key financial and industrial centers, and insurances losses are not that great." The Independent, a British publication, had this to say about the economic impact: “the fishing and tourism industries of many of the worst-hit countries have been devastated but the economies should [still] recover rapidly”. Other reporters echoed similar perspectives. According to the Associated Press, “the region's manufacturing base was not devastated because many factories are located on higher ground farther inland. Major transportation hubs such as airports and ports have also been largely unaffected.” Other reporters have begun to investigate the supply chain implications of the disaster. The Bangkok Post published an informative piece on the supply chain limitations of getting aid and humanitarian relief to the regions. According to the author, “some of the concepts associated with commercial supply chains are directly applicable to humanitarian relief chains. Future work must now develop methods that specifically address the challenges presented by major disasters and humanitarian relief … such issues pertain to relief supply chain structures, establishing stockpiles of the right inventories, pre-planning of distribution networks able to co-operate internationally and disaster toolkits.” A major part of the rebuilding effort will focus on getting the economies of the region back on track. Writing corporate checks for the relief effort alone is not enough – procurement executives can improve everyone’s economic standing by more aggressively considering countries such as Indonesia, Thailand, and Sri Lanka as sources of supply and off-shore manufacturing going forward. -Jason Busch

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