"The system is down" seen as greatest threat to supply chain

Media reports often cite catastrophic events like hurricanes and acts of terrorism as major threats to supply chain operations. But a recent survey by Dedham, Mass.-based ARC Advisory Group found nearly 30 percent of supply chain managers see IT system breakdowns as the most likely cause of a supply chain disruption.

That number reflects the extent to which modern supply chains depend on information—rather than inventory—to service customers, says Steve Banker, an analyst with ARC. "Often there is little inventory to serve as a buffer when interruptions occur," Banker explains. "Any disruption can have a rapid impact across a supply network."

i2 Technologies claims its new generation of software solutions offers a "playbook" for building supply chains that respond to potential disruptions ahead of time. "The supply chain risk management playbook must change as the business evolves," says Gaurang Pandya, i2's director of solutions marketing.

Pandya says the i2 Agile Business Process Platform offers a flexible architecture, with a library of components such as data models, business rules, workflows, and user interfaces that can be assembled to create processes that respond to supply chain needs.

Phoenix-based ON Semiconductor relies on the Agile Business Process Platform to simulate what would happen if the company suddenly found itself short of inventory or capacity. Running simulations weekly—evaluating potential risks and bottlenecks—gives ON the ability to make informed decisions on how to configure its supply chain to prevent actual disruptions. "Since 1999 i2 has been a strategic advisor, helping us realize tremendous value from our supply chain," says John Mallon, ON's director of supply chain strategy.