Blog

 

11

Oct

Natural Disasters and Supply Chan Resiliency

Author: Rene Garcia

Natural Disaster Effects

Nature is uncontrollable and barely predictable. And when nature strikes, it can have devastating effects on supply chains around the globe. Hurricane Florence in the United States reminds us all that every supply chain needs to add resiliency into its management strategy. While nature can’t be predicted, its effects can be planned for. And those plans are useful no matter what the disruption is.

Business Continuity Measures Prepare for All Disasters

"Florence continues to bring misery to North Carolina," North Carolina Gov. Roy Cooper said in a recent statement. The damage and lost output due to Hurricane Florence has been valued at $44 billion. However, that value cannot account for the financial costs incurred by organizations affected by supply chain disruptions due to breakdowns in transport infrastructure as well as other resource disruptions, like access to power or the internet. In short, while there is human crisis in North Carolina, there is a business crisis that extends far beyond that area. But is the effect to the rest of the supply chain any different than a serious disruption? No. If the supply chain loses a key manufacturer, then the cause for the loss is secondary to the response to the loss from a business standpoint.

This is where business continuity strategies can be employed to create structured responses to potentially prolonged shortages. Business continuity is a management process that identifies risks and vulnerabilities that could impact the ability for operations and processes to be resilient. The business continuity framework helps build organizational resilience and the capability for an effective response to disruption. Instead of solely focusing on leading indicators for a disruption – in this case, a natural disaster – companies should build contingencies for the effects of a serious and drawn out disruption whatever the cause may be.

Businesses need to assess their vulnerabilities, determine the impact of those events, and create plans for operating under worst case scenarios. The key is to focus on critical business functions and ensure that they are both efficient and resilient. By devoting time to business impact analysis, organizations can respond quickly and effectively to protect operations and significantly reduce both damages and costs in the face of a serious disruption.

Of course, it isn’t enough just to plan. Every time an incident occurs, organizations have the opportunity to test their strategies, identify what worked and what did not, and then improve the response based on the data. Debrief sessions are necessary to determine best practices and what new information was learned to further refine processes and build resiliency.

Resiliency Begins with Supply Chain Trust

Ultimately, businesses will never completely avoid disruption caused by natural disasters, but if they employ resilient practices, it can make them more attractive as an investment and as a supply chain partner. Choosing a supplier, vendor, or contractor that you can trust is the first step to building a resilient supply chain. Avetta helps you identify partners who are compliant with local, state, and federal regulations and who are certified to perform their services. Easy documentation uploading and hosting makes it simple to provide credentials, and post-work reviews incentivizes all Avetta partners to maintain a high standard of quality. Supply chain resiliency begins with making smart choices about your partners. Avetta makes those choices easier.

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