Real World Risk Events and Their Impacts

2 Real World Risk Events and Their Impacts 

The September 11, 2001 terrorist attacks in the United States, brought home the vulnerabilities of global supply chains. All the U.S. borders (land, sea and air) were closed and it affected the delivery of parts to auto companies. Assembly lines of Toyota and GM were shut down due to lack of parts. 

General motors labor strike Mar 1996 Mostly the United States 

Toyota brake plant fire Feb 1997 Mostly Japan 

Toyota practiced 100% JIT supply system with a sole source brake supplier. A major fire in February 1997 destroyed the brake plant and disrupted the production in 20 Toyota assembly plants worldwide costing 1.8 billion in lost sales. A 17-day strike in March 1996 at the Delphi brake plant in Dayton, Ohio shut down 26 GM s North American assembly plants and it cost nearly 1 billion to the company s first quarter earnings (Fitzgerald, 1996). The earthquake that struck Taiwan on September 21, 1999 knocked out the production of memory chips, circuit boards, and other components. It impacted 50% of the world s supplies to major computer manufacturers and their earnings dropped by 5%. Investors reacted more negatively to Pull-type supply chains (Dell, Gateway) as opposed to Push-t5qje supply chains (IBM and Compaq). 

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