Uncertainties in the Manufacturing Industry

The manufacturing industry is one of the industries covered in the Resilinc annual report and there are various uncertainties associated with the industry. One of the uncertainties is environmental disruptions and can be in the form of natural disasters. Climate effects have brought substantial impacts on supply chain infrastructure, a factor that affects the operation of manufacturing industries. The report indicated that extreme weather disruptions were ranked just below the top five disruptions and their effects have been ballooning since 2017.

Although manufacturing industries cannot alter weather patterns, they can minimize the damage environmental disruptions have in their supply chain. This is can be achieved through contingency planning to ensure all aspects of the supply chain are not affected. Moreover, they can minimize the amount of emissions to reduce their effect on the environment. Manufacturing industries are known to release greenhouse gases in the atmosphere that are associated with climate change and triggers disruptions such as floods. Minimizing their carbon footprint will be vital in ensuring that significant environmental disruptions are not witnessed.

Apart from environmental disruptions, manufacturing industries experience the risks of acquisition and merger events. It reported that 2018 witnessed 445 mergers and acquisitions which was an increase from 324 cases in the previous year (Behrens, 2019). Changes in management and ownership affect the supply chain as new decision-makers can decide to put on sale strategic assets or abandon key business lines. Introducing new talent alters the current decision-making processes and can trigger conflicts between suppliers and other stakeholders.

Manufacturing companies can eradicate disruptions brought out by mergers and acquisitions through planning for any potential disruptions. Organizations can come up with a comprehensive understanding concerning new approaches that can be utilized to accommodate new plans. Adequate planning can avoid high fluid situations, eradicating any misunderstandings that can arise among the stakeholders.

The oil industry is one of the manufacturing industries that was hit by hurricane Katrina in 2005 (Larino, 2019). The US government reported that forty-six oil platforms were destroyed and one hundred pipelines damaged. The damages were further intensified by Hurricane Rita which took place a month later. As per the Resilinc report, planning was adopted to reduce the effects of such natural disasters. For instance, the industry and regulators developed robust design standards and started utilizing improved meteorological data towards improving hurricane safety. The American Petroleum institute directed the wave crest used for the past one hundred years to be raised to a height of ninety-one feet. Moreover, the federal government came up with a plan dubbed the Idle Iron program to eliminate offshore structures that were older.

Uncertainties have been witnessed in the merger between LVMH and Tiffany. LVMH had claimed that Tiffany failed to meet the obligations of the contract as indicated in the agreement (Danziger, 2020). It also reported that Tiffany managed its business poorly. On the other hand, Tiffany claimed LVMH was dragging any schemes towards the closing of the transaction. Such wrangles threatened the merger but a strategy of accommodating the feelings of customers, employees, and other stakeholders to eradicate any misunderstanding was introduced.

References

Behrens, A. (2019). Resilinc EventWatch: Top risks to supply chains in 2018 were extreme weather, M & A activity, Brexit and Explosions. https://spendmatters.com/2019/03/20/resilinc-eventwatch-top-risks-to-supply-chains-in-2018-were-extreme-weather-ma-activity-brexit-and-explosions/.

Danziger, P. (2020). What’s ahead for Tiffany once LVMH takes over? Forbes. Retrieved from https://www.forbes.com/sites/pamdanziger/2020/11/15/whats-ahead-for-tiffany-once- lvmh-takes-over/?sh=5d9140a13c90.

Larino, J. (2019). Offshore oil and gas industry adapts, but risks remain 10 years after Katrina. Retrieved from https://www.nola.com/news/article_c0d0ad61-b859-51c6-b4e2- 5b78752bca44.html.