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A Norwegian perspective on supply chain disruptions in sparse transportation networksHow Norwegian freight carriers handle transportation disruptions,[object Object],Jan Husdal (and Svein Bråthen),[object Object],ISCRIM 2010,[object Object],07 September 2010,[object Object]
  Jan Husdal,[object Object],Has been a Research Geographer with the transport economics research group at MøreforskingMolde, Norway, since 2005. ,[object Object],Has been working with issues related to risk assessment, vulnerability analysis and crisis management since 1989, working for several regional government agencies, advising local authorities in their civil contingencies planning.,[object Object],Holds a BSc in Civil Engineering and an MSc in GIS from the University of Leicester, UK,  focusing on least cost paths and network analysis.,[object Object],Current work is centered on,[object Object],cost-benefit analysis of infrastructure projects,[object Object],transportation network reliability and vulnerability,[object Object],supply chain risk management,[object Object]
Møreforsking Molde,[object Object],Logistics,[object Object],Transport Economics,[object Object],Industrial Economics,[object Object],Molde University College,[object Object],Specialized University in Logistics,[object Object],Møreforsking Molde,[object Object]
Background,[object Object],In 2005, the Norwegian Ministry of Transport made vulnerability reduction an explicit target in their transportation research strategy.,[object Object],This presentation is based on a case study analysis done for theNorwegian Public Roads Administration in 2008,[object Object],Initially: Interviews of 15 road transportation-dependent businesses ,[object Object],Finally: Interviews of 3 transportation-dependent businesses 14 road freight carriers,[object Object]
Introduction,[object Object],Supply Chain Management often neglects the mundane side of physical distribution and transportation, and forgets that these activities form the backbone of SCM (Peck, 2006).,[object Object],A supply chain disruption often starts with a transportation disruption...that may lead to impacts across the whole supply chain.,[object Object]
The importantroleofsparsetransportationnetworks in supplychains,[object Object],Bergen – Trondheim = 660km,[object Object],May be closed in winter,[object Object],Closed in winter,[object Object],Ferry,[object Object],Molde,[object Object],[object Object]
  Vulnerable communities– nosuitable alternatives to or from locations,[object Object]
Framework for survey,[object Object],Perspective: Transportationinfrastructure and/or transportationmeans/mode as a contributingfactor in supplychaindisruptions.,[object Object]
Risk managementframework,[object Object],Adapted from:,[object Object],Jütner et al. (2003) ,[object Object],and ,[object Object],Asbjørnslett (2008),[object Object],What risk managementstrategies - contingency or mitigation  - areemployed by businesses (freightowners) and transport operators (freight carriers)?,[object Object]
Reducingtheimpactofsupplychaindisruptions,[object Object],The impact of supply chain disruptions depends on thea) structure how well located?b) organization how well prepared?of the supply chain (adapted from: Craighead et al., 2007),[object Object],These two sides are complementary – a deficiency in a) can be compensated  by b) or vice versa. ,[object Object],In constrained supply chains, the structure (a) is fixed, and the organization (b) is (perhaps) the only possible point of improvement: badly located, but well prepared.,[object Object]
Summaryofresults,[object Object],Freight owners do not appear to be overly concerned about transportation disruptions, because both mitigative and contingent measures are handled by the freight carrier.,[object Object],Freight carriers are acutely aware of their important role in the overall supply chain.,[object Object],Freightownersseek vertical integration of one or several selected freight carriers into their supply chain, and are willing to pay a “risk premium” for securing on-time delivery.,[object Object],Freight carriers establish asset-specific and flexible solutions to meet the contingent needs of different freight owners.,[object Object]
Carriers’ contingency and mitigationmeasures (I),[object Object],Contingency contracts with companies offering maintenance, repair, rescue or towing services along the most frequently used road links.,[object Object],Cooperation agreements with other carriers to secure replacement drivers or replacement vehicles for transferring goods from the broken vehicle to the replacement vehicle.,[object Object],Structural and/or technical modifications of vehicles and equipment to improve operations, particular under winter conditions.,[object Object]
Carriers’ contingency and mitigationmeasures (I),[object Object],Regular dissemination of information to drivers where to find which roadside assistance.,[object Object],Neutral and non-descript packaging to avoid theft of valuable goods.,[object Object],Sufficient slack in lead time of scheduled routes in order to account for possible delays.,[object Object],Depending on the external circumstances, no guaranteed lead time or arrival time.,[object Object]
Conclusions,[object Object],Transportation networks (roads) are an integral part of supply chains and transportation disruptions can turn into supply chain disruptions. Preparing for transportation disruptions ought to be an integral part of supply chain risk management.,[object Object],In practice, risk sharing: the freight carrier bears risks associated with equipment, vehicles or infrastructure-related events, while the freight owner (sender or receiver) handles risks associated with overall delivery failure related to the sender or receiverof the goods transported.,[object Object]
Futureresearch?,[object Object],How do different manufacturing processes (make to stock, make to order, engineer to order) reflect on the risks and consequences? ,[object Object],Which risk sources can cause transportation disruptions in ingoing or outgoing flows in supply and demand and flows internal to the company, and what are the consequences related to supplier, customer and the company itself? ,[object Object],What risks lead to which consequences and how are they handled and/or mitigated? ,[object Object],3,[object Object],2,[object Object],2,[object Object],2,[object Object],1,[object Object],1,[object Object],1,[object Object],3,[object Object]

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