Flood risks and impacts:

A case study of
Thailands floods in 2011
and research questions
for supply chain decision making
Authors:
1. Masahiko
Haraguchi
2. Upmanu Lall
 Flood risks and impacts: A case study of Thailands floods in 2011
and research questions for supply chain decision making

CASE HISTORY
The flood in Thailand were occurred in fall 2011.
The floods began in the summer of 2010 and gradually
subsided by the end of the year.
There were 1.8 million households affected, 813 casualties,
and 17,578 square kilometers of inundated farm lands
The protracted floods affected the primary industrial
sectors in Thailand, i.e., the automotive and electronics
industries, with a devastating impact on the whole economy.
Objectives: this paper investigates the impact of floods on
the global economy through supply chains, and proposes
measures for the related supply chain risk.
 Close-loop or open hierarchical
structures in
green supply chain management under
IMPORTANT CONCEPT uncertainty

Direct damage: physical damage by natural hazards to

facilities or equipment
Indirect damage: not physically damaged and caused
by ripple effects.
Time to Recovery (TTR): time required to restore 100%
output at that node following a disruption.
Financial Impact (FI): to see resiliency and robustness
of supply chain.
4 perspectives proposed by Fujimoto: dependence,
visibility, substitutability, portability.
 Close-loop or open hierarchical
structures in
CASE STUDY green supply chain management under
uncertainty
Contributing factors: Both natural & human-made; topology
of the region; land-use of the region; water management in
the region
Cost to the whole economy of Thailand: loss of GDP, impact
on industrial parks
GDP decline 8.6% due to manufacturing sector, automobile
sector were down 11.4% and the time required to recover
Supply chain characteristics and the degree of a firms reliance on
suppliers, translates into damages across supply networks.
The impact of supply chain disruption will resonate to over-seas
markets through global supply chains.
Cause of the damage: the dearth of electronics components
& the location of facilities and factories
 Close-loop or open hierarchical structures
in
CASE STUDY green supply chain management under
uncertainty
Direct and indirect damage to HDD makers
The world economy is closely interconnected through a
global supply chain network and the indirect damage of
disasters now easily affects the consumer market at the
global scale in the electronics sector.
 Close-loop or open hierarchical
structures in
CASE STUDY green supply chain management under
uncertainty
Differences in electronics industry:
Impact of floods was distinct among companies in the
same industry.
The causes for these differences must be investigated
in the future study
Difference between automobile and electronics sectors:
The production recovery of HDD makers was slower
than that for automobiles.
Major producers of HDD and electronic component
parts fully operated their facilities in countries other
than Thailand for alter-native production.
 Close-loop or open hierarchical structures
in
green supply chain management under
uncertainty

CASE STUDY
Recovery and new responses: Many companies could
not transfer to different facilities due to a lack of
financial capacity.
Responses in automobile and electronics industries:
some of the companies have already started redesign-
ing the supply chain network.
Responses in insurance industry: companies can apply
for insurance that covers flood risks provided by CIP
through private insurance companies.
Responses in the government and international society:
RESEARCH QUESTIONS
Supply chain resiliency:
Critical node and link: The loss is greater if a factory that produces a
unique component or plays a critical role in a supply chain is directly
impacted by a disaster.
Alternative bridge tie: in order to make indices of substitutability, we
must consider the balance between substitutability and competitiveness.
Strong ties: if the ties between the two companies are strong as well as
pliable, both companies may be able to avoid some damage.
Direction of arrows: companies must manage supply chains by looking
not only at their supply side, but also at the other side.
Supporting policies: there are few studies or reports that examines the
interdependencies between lifeline and transport systems and supply
chains in the context of resilience to disasters.
CONCLUSION
Automotive and electronic products supply chains had
somewhat different mechanisms of risk transmission and
response that translated into different times to recovery, loss
and market performance at the individual company level.
Most of the affected companies want to operate in the same
locations and indeed, they answered that Thailand is still an
attractive place for their investment.
Future research should quantitatively examine the resiliency
and robustness of supply chains to disruptions caused by
extreme events, and to formulate a way to reduce
vulnerability to risks while maintaining competi-tive edge.