In March 2000, a lightning bolt struck a Philips Electronics semiconductor plant in Albuquerque, N.M., triggering a small fire in a chip-processing machine that took the plant offline for months
Although the plant was Ericsson's sole supplier of chips for use in its cell phones, the companyresponded slowly to the problem and then found itself unable to secure an alternate source for the chips.
Without the chips, the Swedish company was unable to keep up with the demand for its products, andended up losing more than $2 billion in connection with the incident. In October 2001, less than twoyears after the fire, Ericsson cut its cellphone business exposure by entering into a joint venture with Sony.
Considering Ericsson's tale of woe, it hardly comes as a surprise that supply-chain risks rank high onthe list of corporate concerns in today's global marketplace.