October 09, 2014

Ebola Outbreak Poses Supply Chain Risks with Some Commodities

Charlotte Hicks

ebola-virusThe current Ebola outbreak is becoming more than just a worldwide emergency health issue. It is becoming a supply chain concern. While our thoughts are with those impacted by the awful disease, the potential supply chain risk is also creeping into the minds of business leaders.  

Resilinc’s monitoring shows some signs of a ripple effect on supply chain sourcing, pricing and availability of key raw materials. These events, indicated by an increasing number of news reports, raise flags about the impact the disease has on mining activities (particularly with alumina, iron ore and gold), palm oil and palm kernel oil supplies, and potential crude oil disruptions.

Protecting Your Supply Chain

To avoid possible supply chain disruptions, companies can take a few steps now to secure their supply chains and mitigate risks associated with the contagion.

Here are Resilinc’s recommendations:

  • Improve communication with partners. Actively engage suppliers in information-sharing notifications and, when possible, stay flexible when making sourcing, procurement and logistics decisions.
  • Map and identify tier-one and sub-tier suppliers operating in and nearby countries affected by Ebola. Resilinc subscribers can use the “What if” tab in your dashboard for instant supply chain analytics. However, if you do not subscribe to Resilinc’s service, here’s some guidance:
    • Locate where your raw materials are sourced and how these materials move across multiple tiers of suppliers globally
    • Analyze where and how key suppliers are likely to be impacted
    • Determine which products are at risk for a disruption and calculate the potential negative effect on your revenue and profits
  • Analyze current inventory levels for critical components, commodities and raw minerals. Understand which raw materials could most likely affect your production and delivery targets. Resilinc’s supply chain analysis, for example, shows that one of the largest exports from Liberia, a country hard hit by the Ebola outbreak, is palm oil and palm kernel oil, a key building block in many raw materials. Luckily, 80 to 90 percent of these global supplies come from Malaysia and Indonesia, therefore the impact should be minimal. While global pricing is stable at this point, Resilinc is closely monitoring the situation. Below are materials that are downstream of palm oil and palm kernel oil.
    • Ascorbyl palmitate (antioxidant)
    • Calcium stearate (tablet mold release agent and lubricant)
    • Caprylic acid (treatment for some fungal and bacterial infections; surfactant, and cleaning agent)
    • Cetyl palmitate (emollient ingredient)
    • Isopropyl myristate (solvent for topical therapeutics)
    • Sodium dodecyl sulfate (also known as SDS; surfactant)
    • Magnesium stearate (tablet mold release agent and lubricant)
    • Myristic acid (solvent for therapeutics)
    • Palmitic acid (palmitoylation of proteins)
    • Polysorbate 20 (surfactant and emulsifier)
    • Polysorbate 80 (surfactant and emulsifier)
    • Sodium caprylate (treatment for some fungal infections; surfactant, and cleaning agent)
    • Sodium stearate (tablet mold release agent and lubricant)
    • Vitamin A palmitate (antioxidant)
    • Vitamin C ester (antioxidant)

In the midst of a crisis, knowledge brings peace of mind. Some manufacturers will spend hours and weeks monitoring and analyzing the potential impact Ebola could have on their supply chain. With Resilinc’s pro-active supply chain mapping and monitoring, attaining that peace is just a click away.

Sign up for Resilinc’s EventWatch, our supply chain monitoring solution, and start organizing a faster, more efficient response to situations beyond your control.

Topics: supply chain resiliency, supply chain risk mitigation, supply chain disruptions