Managing the Supply Chain When Natural Disasters Strike

     
hurricane

Hurricane Sandy ripped through parts of the Atlantic Coast, causing significant damage and distress to millions of people. The hybrid storm forced residents and businesses to evacuate and even cut off power in many locations. As a result, people were removed from their homes and business operations were significantly delayed.

Supply chain companies worldwide can fall victim to serious delays and losses when a natural disaster such as Hurricane Sandy strikes, and must prepare for crisis scenarios to limit financial strain.

Supply chain management solutions work to keep all branches of a chain updated on the latest information regarding operations, orders and other activities. If a major storm is predicted, all sectors of the supply chain should be aware of the impending weather, how best to prepare for it and what measures are being taken to reduce losses during the event. Because supply chains are disjointed and spread out across numerous locations, a supply chain management solution is key to keep all branches connected with up-to-date information. If one branch of a chain is being affected by a storm, the other branches should be aware of the situation and plan accordingly based on real-time reports and information sent through the management system.

Why weather matters
Andrew Winston, founder of Winston Eco-Strategies, recently analyzed the effects of Hurricane Sandy and how the storm impacted businesses in the United States and worldwide. While scientists may argue that climate change may or may not have caused the storm, what businesses must address is the importance of planning for such events with management technology.

According to a study from Munich Re, the number of severe weather-related events has increased significantly in North America over the past 30 years, indicating natural disasters and major storms pose a consistent threat to supply chain operations. Whether the cause of the events is climate change or not, companies should acknowledge the threats and implement solutions to combat the elements and prevent operational disruptions.

Multinational businesses and those with multiple locations must build resilient, flexible enterprises that can work around natural disasters and maintain the bottom line. One major storm could easily wipe out profits for a small business in just a few days. A prepared company with a management system in place, however, has the luxury of improved flexibility and adaptability. This allows for minimal losses and improved business continuity.