#62 Dancing around the volcano
Having been in Iceland during the most recent eruptions of the volcano Eyjafjallajokull in Iceland has been an interesting experience, even with a view to international strategy. Academics and managers have come so accustomed to being in control that the only thing we worry anymore are issues that may be tricky, but still are manageable. Standardize or adapt? Send expatriates or promote locals? Export or invest? Most answers to these questions aren’t easy ones, but there are ways to handle them. Enter the volcano. Apart from it being a belittling experience if one sees the volcano spewing boulders, it is definitely worth a thought to bring the simple things back into the design of international strategies. Let’s not forget that there are events beyond our control that render any strategy, no matter how well designed useless.
March 6, 2023 @ 10:20 pm
It has been almost exactly 13 years since a memorable day that I still remember vividly. I was waiting at the Munich airport for my flight to a vacation destination when I came across a headline in the media that read “Volcanic ash forces BMW to stop production”.
The volcanic ash had affected BMW’s global network of suppliers as the company’s electronic components, which were purchased from all around the world, could no longer be delivered. As a result, the production of 7000 vehicles at German plants had to be postponed. This had caused enormous economic damage not only to BMW but also to many others, as the Eyjafjallajökull volcano had disrupted air travel and transport.
Interestingly, VW and Opel reported that their production was running without any restrictions. It is possible that they had better relationships with their suppliers or were able to switch to alternative means of transport, such as trucks or ships, to obtain the necessary components.
Although this was a case of force majeure, BMW undoubtedly learned an important lesson from it. The company subsequently reflected on sustainable supply chains in the automotive industry, recognizing that the benefits of international trade relations are very high.