The Ultimate Supply Chain Risk

What is the ultimate supply chain risk?  Imagine a natural disaster destroying your business facilities and/ or the community around it, preventing your employers for working.  Obviously this risk involves more just the organization’s supply chain. But should it occur, the supply chain and logistics personnel may be in the best position to put structure back into chaos, something they do on daily basis in their jobs, because the supply chain is chaos waiting to happen.

When you read in the supply chain and logistics literature about supply chain risk, it is usually about losing a supplier or transportation corridors being blocked and having alternatives available. There is relatively little discussion in these articles about what should happen if the worst comes to your location.

What brought  this to mind, was I attended a program put on by the Chicago CSCMP on disaster preparedness on Sept. 11, 2014 at the Chicago area FEMA office.  A disaster simulation exercise using smart phones and tablets was developed. I added to the disaster, personally, by having a smart phone which for some reason could not pick up wi-fi in the building, knocking even more truck capacity out of the market in the game.  While the game did not assume your firm was knocked out (for the most part) and therefore dealt with more familiar supply chain risk issues, afterward disaster preparation for local organizations was discussed.

Here are some the key points I learned  about preparation for your organization:

  1. Have a plan in place to deal with disaster. Oddly, you will know right from the get go the plan will not work for unforeseen events. But should your organization have such an event, a method to deal with the issues will be in place.
  2. Contact your local emergency manager which may be in at the state, county or municipality level. There are a number of reasons for this. One, in an emergency, known actors are likely to get help before unknown actors.  Organizations know it is good business practice to be constructively involved with the community in a known way.
  3. When a disaster hits, it is also an opportunity. Because most organizations are unprepared or not financially strong, 30% to 40% of the businesses in the area are likely to go out of business after a disaster. If your firm is a survivor, you were organization will be more vital to the community and its market.
  4.  Be prepared to do some unusually things. One example, if homes are destroyed, your firm may have to provided housing some their employers to operate the business.

Before I closed I would like to mention some of the people who led the meeting. Kathy Fulton is the Executive Director  of American Logistics Aid Network(ALAN). This is the organization that helps coordinate private sector supply chain resource to a disaster. Megan Chamberlian, Recovery Operations Director for the Red Cross. Many local Red Cross chapters will provide a speaker at no charge to organizations to help in disaster preparedness. Jamison Day, principle Ecosify LLC prepared and led the disaster simulation game. Ian Becherer-Gerrie represented FEMA, who allowed to use their room for the event. In a disaster, FEMA may choose to use resources such as trucks and if they do so they will get first preference in a disaster situation.

 

 

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