Navigating Natural Disasters: 4 Tips for Keeping Your Supply Chain Intact
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In 2012, natural disasters across the globe caused $180 billion in damages [Source]. Whether your company is sending aid to those in need or your supply chain is directly affected, the aftermath of a natural disaster can be an extremely difficult process to navigate. In the wake of the typhoon which devastated the Philippines and the tornadoes which hit Central Illinois just last month, it is becoming increasingly important to understand the logistics of disaster relief.
For companies, natural disasters can affect supply chains it two major ways: when a company sends aid to disaster zones, and when a company’s supply chain is directly affected by the natural disaster. In both situations, there are a few key steps you can take to prepare your supply chain to withstand the pressure.
1. Assign a point person
“The United States Agency for International Development (USAID) reports that of all funds used to support disaster operations, 90% are spent for response, whereas 10% are spent on preparedness activities and investments and risk reduction” [Source]. Companies can never fully prepare for a natural disaster, as they don’t know when it will strike or how. But, what they can do is set a response plan in place. According to the United Nations, every dollar spent to prepare for a disaster saves seven dollars in disaster response [Source], so putting in the work before a disaster hits is of the utmost importance. The first essential step in preparing a response framework is to delegate a point person. This person will be in control of your company’s internal and external response to a natural disaster. By appointing one person to control the situation, relief can be sent in a more organized fashion and if your own supply chain is affected, it will reassure your employees and the public that you have prepared to handle the effects of the natural disaster.
2. Create a solid distribution network
When navigating through these situations, the most important thing to keep in mind is timeliness. Responding to natural disasters, externally or internally, needs to happen immediately and the most effective way to do that is to create a solid network of warehouses and distribution centers. This allows supplies headed to disaster zones to be staged and sent quickly and assures that, if your own supply chain is affected, that product will always be housed safely. One way to solidify your network is to educate all parties on your preparation framework. By distributing the plan and preparing all moving parts of the situation, you can be certain that the framework you set in place will be executed effectively.
3. Create a multi-modal plan
In the event of a natural disaster, companies need to prepare for the possibility that pre-disaster modes of transportation might be rendered obsolete post-disaster. Perhaps before the typhoon hit last month, you shipped your product to the Philippines via ocean freight. Now that most of their ports are destroyed, you need to rethink how you will deliver products. When creating your disaster response framework, it is important to prepare contingency plans across all your available modes. By creating a multi-modal plan, you can insure that if one mode of transportation is no longer feasible, your supply chain will continue to flow smoothly.
4. Learn from mistakes and plan for the future
After the dust has settled, it is time to ask yourself the hard questions. Did your team mobilize supplies quickly enough? Was the transportation method you chose effective and efficient? Did the warehousing and distribution of supplies run smoothly? Answer these questions honestly and make changes to the framework you created so that the next time disaster strikes, you will be more prepared than before.
A natural disaster can strike at any time. The most important thing a company can do to keep their supply chains flowing and to provide relief to those in need is to prepare for the possibility well in advance and learn from their past mistakes.
In light of the recent natural disasters in the Philippines and Central Illinois, please click on the following links to donate: