{"id":1284,"date":"2011-10-06T12:43:41","date_gmt":"2011-10-06T16:43:41","guid":{"rendered":"https:\/\/demand-planning.com\/?p=1284"},"modified":"2011-10-06T12:43:41","modified_gmt":"2011-10-06T16:43:41","slug":"managing-risk-and-forecasting-for-unplanned-events","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2011\/10\/06\/managing-risk-and-forecasting-for-unplanned-events\/","title":{"rendered":"Managing Risk and Forecasting for Unplanned Events."},"content":{"rendered":"
\"John<\/a>

John Brown - Coca Cola<\/p><\/div>\n

How often have you heard these words during a meeting in your office? \u201cSay what?\u00a0 Forecast for an unplanned event?\u00a0 Isn\u2019t that like buying flood insurance in Phoenix<\/a>?<\/p>\n

Regardless of whether or not we choose to plan for them, catastrophes happen. However planning ahead can mean the difference between success and failure<\/a> when these situations arise. \u00a0Let\u2019s look at the recent earthquake in Japan.\u00a0 Should we forecast for earthquakes?\u00a0 In Japan earthquakes are a daily occurrence so the answer should be yes.\u00a0 Is it necessary to forecast for a 9.0 earthquake?\u00a0 Maybe not, but it happened.\u00a0 Follow the earthquake with a tsunami? This is definitely a possibility seeing how Japan has so many coastal regions.\u00a0 Now we need to forecast a third contingent event, i.e. the damage to the Fukushima nuclear reactors and then identify and plan for the global impacts, especially in the electronics and automotive industries? OK, now this is getting ridiculous.<\/p>\n

All of the above events happened and they will happen again. The event will probably not be an earthquake and most likely will not happen in Japan. But somewhere, sometime, you can be sure that we will experience another significant disruption to our supply chains<\/a>.\u00a0 Take for example, what just happened at the Shell oil refinery on the island of Pulau Bukom near Singapore. This is the company\u2019s largest refinery, which just experienced a major fire and as a result has to be shut down as of 03-Oct.\u00a0 What will the impact be?\u00a0 Only time will tell.<\/p>\n

So what message is here?\u00a0 Simply put:\u00a0 We must know and understand our value chains.\u00a0 Where the dependencies and what are are the weak points.\u00a0 What would we do if we lost manufacturing at site \u201cX\u201d, lost supply from supplier \u201cY\u201d, or were suddenly unable to use shipping route \u201cZ.\u201d?\u00a0 What if a pandemic broke out in the country where we have our greatest revenue base?\u00a0 Each company and each value chain has unique characteristics.<\/p>\n

We cannot afford to think only in terms of getting products made and delivered either.\u00a0 We must think about the effects that risk events will have on the demand for our products<\/a>.\u00a0 As many have seen, when the economy tanks (also considered to be a risk event), the demand for durable goods declines and\u00a0 purchasing discretionary items becomes delayed because consumers hunker down for the economic winter, and hope it doesn\u2019t last too long.<\/p>\n

I look forward to sharing my experience as the keynote speaker and meeting all of you at the upcoming Supply Chain Planning and Forecasting: Best Practices Conference in San Francisco<\/a>. As far as Risk Management is concerned, don\u2019t expect a simple answer because unfortunately there isn\u2019t one.\u00a0 You will, however, learn how to build a framework that can make you more prepared for the unknown \u2013 and plan for it.<\/p>\n

John J. Brown, PE
\nDirector, Risk Management, Supply Chain Development
\nThe Coca-Cola Company<\/p>\n

Hear John’s Keynote Presentation at:<\/strong><\/span><\/p>\n

\"IBF's<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

How often have you heard these words during a meeting in your office? \u201cSay what?\u00a0 Forecast for an unplanned event?\u00a0 Isn\u2019t that like buying flood insurance in Phoenix? Regardless of whether or not we choose to plan for them, catastrophes happen. However planning ahead can mean the difference between success and failure when these situations […]<\/p>\n","protected":false},"author":1007,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[60,61,112,62,41,64,65,66,67,146,39,68,69,70,35,43,36,48,228,79,37,73,38],"class_list":{"0":"post-1284","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-forecasting-and-planning","7":"tag-best-practices","8":"tag-business-forecasting","9":"tag-coca-cola","10":"tag-collaborative-forecasting","11":"tag-data-cleansing","12":"tag-demand-forecast","13":"tag-demand-forecasting","14":"tag-demand-management","15":"tag-demand-planning-and-forecasting-conference","16":"tag-dpfc","17":"tag-economic-forecasting","18":"tag-executive-sop","19":"tag-forecast-accuracy","20":"tag-forecast-error","21":"tag-forecasting","22":"tag-forecasting-models","23":"tag-ibf","24":"tag-institute-of-business-forecasting-and-planning","25":"tag-risk","26":"tag-risk-management","27":"tag-sop","28":"tag-sales-operations-planning","29":"tag-supply-chain"},"_links":{"self":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/1284"}],"collection":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/users\/1007"}],"replies":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/comments?post=1284"}],"version-history":[{"count":0,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/1284\/revisions"}],"wp:attachment":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media?parent=1284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/categories?post=1284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/tags?post=1284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}