Watching the disastrous events associated with Hurricane Sandy (aka ‘Frankenstorm’) reminded me that our supply chains are fragile entities that can easily be thrown into turmoil.
Sandy will undoubtedly cause numerous disruptions in all manner of supply chains. The obvious impacts are the loss of electricity and shutdown of transportation routes – airports, ports, roads, and rail services, all closed.
Simply put, the movement of goods on the East Coast will grind to a halt on Monday. Depending on the amount of damage incurred, it could be several days or perhaps weeks until goods begin flowing with a degree of normalcy.
This brings into focus the need to have contingency plans in place.
Preparedness & ‘Design for Flexibility’ in the Supply Chain
Risk Management and Business Continuity Plans (BCPs) are cornerstones of an effective supply chain strategy. Given the global footprint of a modern supply chain, disaster-planning becomes a crucial piece of the puzzle.
Events on the other side of the world can have an immediate impact and ripple effect on your supply chain.
In the electronics industry, we experienced two disastrous impacts in 2011 with the Japan earthquake, followed shortly after by the flooding in Thailand.
As we look to improve our BCPs, Country of Origin and Shipping Point are data elements that are growing in importance. They are key factors in supplier selection, and yet another reason for considering a Right-Shore sourcing strategy. It’s essential to minimize the overall risk of supply chain disruption while maintaining the ability to react quickly if disaster does occur.
Another key to minimizing risk in the modern supply chain is relationship-building. It’s absolutely imperative to partner with companies that you trust and respect, especially when disaster strikes. Over the course of my career I’ve heard of countless examples where a lack of visibility, open communication and commitment has crippled a supply chain…and in many of those instances, there wasn’t even a disaster involved.
No Time Like the Present
We recently had a surprise exercise during a leadership team meeting where we reacted to a mock disaster. Fortunately, we have a Business Continuity Plan in place which allowed us to calmly work through our established procedures.
However, it also served as a reminder that it needs to be kept up-to-date as pieces and people are always changing.
I was definitely thinking about our BCP as I watched the waters rush into the streets and subways of New York. My hope is for a speedy recovery for the people and areas that encountered Hurricane Sandy.