Since the onset of COVID-19, shortages of products have been common.
Many shortages were the result of the pandemic, including unexpected increases in demand, and facilities shutdown due to sick workers. With the re-opening of the economy, shortages have continued. Demand spikes, coupled with organizations being unable to re-staff enough workers, has led to product shortages in areas such as lumber.
However, not all disruptions in the supply chain are directly tied to the pandemic. Recently, the Colonial Pipeline was shut down due to hackers. This pipeline is one of the largest in the world, stretching from Houston, Texas into the northeastern United States. Its 5-day shutdown led to gasoline shortages along its length.
Another disruption to supply chains is being caused by a crack in the I-40 bridge in Memphis, Tennessee. The crack has forced the closure of the bridge for months, and temporarily shut down barge traffic on the Mississippi River. Traffic from this bridge has been diverted to the I-55 bridge, backing up traffic. Memphis hosts FedEx’s largest hub, and is a key artery for many supply chains.
Disruptions such as these illustrate weaknesses in the US infrastructure that can disrupt supply chains.
- Colonial Pipeline hack ‘painful’ for US: Gas analyst (May 10, 2021, Fox Business)
- Cracked Memphis Bridge Causing Major Traffic (May 14, 2021, NBC News)
This post is based on the Land Line article, I-40 bridge at Memphis likely closed for several months, by Tyson Fisher, May 19, 2021; the WCTI12.com article, Colonial Pipeline shutdown has NC lawmakers taking close look at energy infrastructure, by Kate Hussey and Annette Weston, May 19, 2021; and the YouTube videos in the Spotlight. Image source: JUPITERIMAGES/ Thinkstock / Alamy
1. Can supply chain disruptions such as hacking and cracks in bridges be eliminated?
Guidance: Not every disruption can be eliminated or anticipated. It may be possible to reduce the likelihood of an event, or its impact.
2. How can the likelihood of an event be reduced?
Guidance: The key is to increase the reliability of the supply chain. In the Colonial Pipeline case, an emphasis on cybersecurity to prevent attacks would improve the supply chain. One of the problems is that until it occurs, a business has to weigh the cost of the cyber security against the likelihood of a cyberattack.
3. How can the impact of a supply chain disruption be reduced?
Guidance: The way to reduce the impact is to have a supply chain system that has redundancy. Part of the problem with the Colonial Pipeline was that it was the major supplier of fuel for the southeast and northeast. Once it went down, there was not enough capacity in other delivery systems. As a result, a gasoline shortage occurred.
Additional capacity from another pipeline, or having additional gasoline storage, could reduce the impact of the shutdown. However, these approaches also add cost to the supply chain.
4. What is the connection between these supply chain disruptions and public policy?
Guidance: In the case of the Memphis Bridge, government agencies are responsible for the upkeep. In spite of inspections, the crack was not detected in a timely fashion.
Many parts of the US infrastructure are at similar risk of failure. Additional governmental investment in infrastructure can help insure that problems like the Memphis Bridge do not occur.
In the case of the Colonial Pipeline, government assistance with cybersecurity can help organization avoid being hacked. Particular attention should be paid to organizations that are part of the infrastructure such as utilities.