Freight News, Logistics

ASOS fire shows up global supply chain risks

[ June 23, 2014   //   ]

The fire at the Barnsley warehouse of online retailer, ASOS on the night of Friday 20 June highlights the risks to the modern supply chain, says the CEO of the Ti transport consultancy, John Manners-Bell.

The global retailer kept 70% of its stock at its distribution centre in Barnsley and it is believed that the fire could have affected more than £30m ($50m) of inventory. ASOS has suspended orders over its website, although these recommenced early on Monday morning (23 June 2014).

Manners-Bell, author of the recently published ‘Supply Chain Risk’ book, commented: “One of the problems of operating global distribution centres is the concentration of risk in one location. Centralisation of logistics operations makes sense on an operational basis in terms of keeping stock levels low and reducing redundancy. However if you start costing in external risks such as fires, floods and security issues, then suddenly it doesn’t look so smart.”

And as it is very difficult to quantify the financial cost of such events, many companies pretend that they don’t exist, he said. A

He added: “To get back up and running so quickly, ASOS obviously had exceptional contingency plans in place, no doubt helped by an earlier experience when its previous distribution centre in the UK was badly damaged by an oil depot blast. However this further disaster demonstrates the systemic fragility of many global supply chains and perhaps suggests that it would be sensible to spread risk over a number of locations, despite an increase in internal supply chain costs.”

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