Supply Chain Risk – Who Predicted Eyjafjallajokull?

Supply Chain Risk has probably been for me the biggest growth area in the profession over the last couple of years. My friends who are CPOs agree: it is the factor that has gone from one of their "tier 3" issues to something right up there at the top of their agendas alongside bottom line savings and the "war for talent."

In all the millions of hours of risk assessment processes, meetings, consulting assignments...I wonder how often this appeared on the "critical risk register":

"Volcano erupts, disrupts all air transport, causing critical shortages of components / goods for resale etc."*

Because that's what's going on in the UK and most other parts of Europe at the moment. The eruption under the Eyjafjallajokull glacier in Iceland that has thrown up a 4-mile high plume of ash and disrupted air traffic across northern Europe shows no signs of abating after three days of problems. The ash particles are particularly bad for plane engines because the eruption blew through a sheet of glacier ice, taking tiny particles of "glass" mixed with the normal ash up into the airspace. All air traffic was suspended in the UK yesterday; the problem area now covers most of North-Western Europe, including Scandinavia, France, Germany and the north of Italy.

Amazingly, this has displaced our imminent UK election from the front pages -- and it has brought home just how dependent we are on air travel. It's not just the supply chain issues, but sports people unable to get to competitions, friends unable to return from holiday, foreign students struggling to get back for the beginning of the university term. In many parts of the country, those accustomed to continuous landing and takeoff noise (prevalent in such a crowded country as England, where airports are often very close to cities), are wandering around, saying "I don't like it, it's just too d**m quiet...!"

Soon shortages of fruit and vegetables will be seen in the shops, and I'm sure there are other interesting supply chain contingency plans being brought out of the bottom drawer. But who would have thought this would be the cause of such widespread economic and personal disruption? It's not a strike, not terrorist action, not a fuel shortage, but the pure undiluted power that nature can still exert over us, despite our sophistication and apparent dominance over the earth.

*We should offer a prize for anyone who can provide evidence of a plan, written more than a week ago, that identifies as a risk "volcano erupting and disrupting continent wide air travel."

Peter Smith

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