Thai floods, supply chain and insurance impact

An article in the Wall Street Journal (Nov 3, 2011) describes the floods in Thailand impacting 25% of the world’s supply of hard drives. The Honda plant’s water damage impacted global supply of components, and a plant in Brazil had its production cut to provide components for the rest of the global supply chain.  Will the increased insurance costs due to inadequate flood infrastructure drive production out of Thailand ? Should supply chains diversify global production as a hedge for all components ? Is the lean supply chain to blame ? Will price increases for components solve the problem by attracting new supply sources ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , . Bookmark the permalink.

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