Speaker 1: Years after the devastating tsunami of 2011, Japan is still recovering from the natural disaster. In addition to the tragic loss of life, the country's economy was hit hard. The impacts also influenced businesses around the world. Many of today's complex global supply chains have links to Japanese businesses, and the tsunami shut plants and cut off the supply of components, materials and labour. Some disruptions cannot be controlled. So what can business managers do to strengthen supply chains?

Speaker 2: Research here at the University of Bath has looked at three main options for organisations. First of all, we have looked at controlling and managing disruptions, trying to prevent their occurrence in the first place. Secondly, we've looked at monitoring for these disruptions, trying to predict them before they occur. And finally, we're looking at how firms can create better responses when disruptions finally occur. In terms of control, firms have at least three options. First of all, they could seek to avoid the disruption hitting their supply chain in the first place. For example, they could relocate manufacturing from one high-risk zone into a lower-risk zone. We have mapped, from 2000 to the present day, around 2,700 macro disruptions. By analysing the disruptions and modelling their probability and impact, we can help firms understand where best to relocate their manufacturing. Secondly, firms can seek to reduce the impact of a disruption through adding extra capacity into the system by taking on alternative suppliers. They could also develop greater flexibility in their supply chains through interchangeability of products, of processes, or even of plants. In terms of monitoring, we've developed software that allows organisations to model their internal risks, but also to scrape data from the web, which allows them to track trends and therefore predict disruptions before they occur. Finally, in terms of responding to disruptions, some disruptions cannot be predicted. They can't be monitored for in advance. So what we're trying to do is understand what factors drive a more efficient and effective response, all the way from detailed level contractual terms up to the design of the supply chain in the first place. Moving forward, we at the University of Bath are trying to push the research in two main directions. First of all, to create a better network understanding of risk and disruption, how disruptions ripple across these global supply chains from China all the way through to the UK, for example. Once we have an understanding of these rippling effects, we can then seek to try and manage and control those better. Second, we're trying to understand the manager better in this process. Managers have a tremendous influence on this overall process in terms of establishing risk measurement, in terms of establishing risk estimates, and even in terms of investment decisions. What we're trying to understand is how cultural values may systematically bias their decision making in this area of global supply chain risk management. The problem here is still acute. Over 85% of UK organisations suffered from some form of disruption to supply in 2011, many without the proper risk management processes in place. In future, organisations will be able to use the results of our work to build greater resilience and robustness into their global operations.