Most managers know that they should protect their supply chains from serious and costly

disruptions. Based on this article, how to reduce or minimize the risk of supply chain
disruptions?

To effectively manage supply chain disruptions, businesses must take proactive

measures to ensure that they partner with suppliers who follow industry best practises for
preserving supply chains and dealing with common disruptions. By doing so, businesses can
anticipate and prepare for natural disasters and other potential disruptions, as well as develop
effective backup strategies to deal with any resulting supply chain delays or downtime. This
has the potential to reduce the negative impact of disruptions on a company's performance
and reputation while also increasing the company's overall resilience in the face of
unforeseen circumstances.

Businesses can take a variety of proactive measures to reduce and minimise the risk of
supply chain disruptions caused by natural disasters such as floods. Establishing partnerships
with suppliers who use best practises for protecting supply chains and have experience
dealing with common disruptions is one such measure. Such collaborations can assist
businesses in predicting and preparing for natural disasters, as well as developing backup
plans to address supply chain delays and outages. Furthermore, businesses can consider
entering into contracts with substitute suppliers that prioritise certain companies over others
in the event that the primary supplier is disrupted. Such contracts can help reduce the time it
takes to recover from a disruption and the financial impact that comes with it.

Companies must develop and implement effective contingency plans that address
potential disruptions to ensure supply chain continuity. Such plans may include identifying
alternate modes of transportation, developing backup inventory storage locations, and
establishing communication protocols to allow suppliers and customers to collaborate
effectively during times of disruption. When catastrophe hits, transportation by air tends to be
the only viable mode of transportation. According to the article, most roads and rail tracks
become impassable after being blocked for several days. Airports, on the other hand, are
remarkably resilient and typically operational. When stranded cargo contains perishable or
time-sensitive goods, air transport becomes even more critical. Products that need
refrigeration or have a short lifespan can be shipped by air to ensure they arrive swiftly and in
excellent condition. Additionally, companies can reroute their cargo and ensure a continuous
flow of goods by utilising airports in unaffected areas. This enables them to avoid disrupted
areas and maintain supply chain operations despite the difficulties encountered on the ground.
During times of disruption, air transport can help bridge the gap until the primary mode of
transport, such as railways, is restored. Nevertheless, adequate air freight capacity and
coordination with relevant stakeholders such as logistics providers, customs authorities
and airlines are critical for implementation success.

Moreover, when floods in India damaged railway tracks and halted consignments to
Nepal, Nepali importers were obligated to pay demurrage and detention charges to shipping
companies if they failed to load or unload goods within the time allowed by the contract. As a
result, it is critical for businesses to ensure that their contracts with suppliers include clear
and enforceable terms and conditions that address potential disruptions and their financial
implications. Another point is, cooperation with competitors can be vital in reducing and
minimising the risk of supply chain disruptions in such a situation. Competitors can set up
channels for sharing critical information about disruptions like damaged infrastructure or
alternate routes. Companies may collectively assess the impact and develop more effective
strategies to address the situation by collaborating and exchanging information. Besides,
competitors can pool their resources to address the disruption's challenges. Sharing
transportation capacity, storage facilities, or even expertise in navigating alternative supply
chain routes can be examples of this. Companies can overcome constraints and speed up the
movement of goods by pooling resources. Thereby, in times of major disruptions, such as the
one described in the article, collaborating with competitors can result in mutual benefits and
collectively mitigate the adverse effects of the disruption on the supply chain.
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