Supply chain management is the active process products go through from extraction of raw materials to finished product purchase. It entails planning, forecasting, purchasing, assembly, hauling, warehousing, logistics as well as sales and customer service (Sodhi & Tang, 2012). It is thus the duty of supply chain management executives to gain sustainable competitive advantage by ensuring products are made and delivered faster and cheaply. However, problems may occur in the process, such as natural disasters, labor disputes, terrorism, or bankruptcy of a supplier. This calls for strategies to ensure that disruptions are dealt with and no loss is incurred.
To avoid a repeat of the situation that happened to Procter & Gamble after Hurricane Katrina, the supply chain management executives should elevate their level of disruption preparedness. P&G should do a delicate balancing act to keep inventory at appropriate levels by building inventory to ensure continual supply (Handfield & McCormack, 2008). This is however costly due to the warehousing costs involved but it can be worthwhile if disruption predictions are made with reasonable confidence. Moreover, P&G may opt for redundant suppliers because disruptions cannot happen to all the suppliers at the same time. Besides, P&G will become more prepared without a build-up of fast-depreciating inventory, lower disruption risk while preserving the economies of scale at its suppliers.
Moreover, P&G can ensure supply chain visibility and knowledge as well as system-wide awareness and capabilities to disruption issues. In preparing for a disruption, managers should list and prioritize events leading to disruption to mitigate the probability of disruption followed by listing the disruptions caused for recovery purposes (Sodhi & Tang, 2012). The supply management team should assess the risk and create a response team. Supplier options should also be reviewed and the plan tested regularly. Moreover, a track of events should be kept as well as backing up files.