BP oil spill creates risks for supplier management industry

Right now, BP is testing a new containment cap that could stop the flow of oil from its blown-out well for the first time. Even if the cap doesn’t capture all the oil, installing it is still necessary to prepare for an expected demanding hurricane season in the Gulf of Mexico. Forecasters from the National Oceanic and Atmospheric Administration believe this could be the worst hurricane season on record, with an estimated 23 named storms, seven becoming serious enough to be classified as major hurricanes.

Supply chain industry conjecture has centered on the damning assessment of a U.S. congressional panel that “BP made decisions that increased the risk of a blowout to save the company time or expense”. It has also speculated on Transocean’s and Halliburton’s role, among other suppliers, in contributing, or not, to the rig’s failure. BP’s critics have suggested that this case typifies a trend in the last number of years for technical expertise to move from inside corporations to “suppliers” or contractors due to downsizing and outsourcing. The BP situation has implications for the risk and supplier management industry that only time will divulge.

With the world’s eyes fixed on BP, the anguish caused by the spill to local and regional food and catering supply chains has been largely overlooked, until now. Disquiet is growing and these industries could well become the next stick with which to beat BP.

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