Disaster Strikes!!! Is Your Supply Chain Ready To Recover?


Hurricanes!  Earthquakes!  Terrorist Attacks!  Train Derailments!  War! Fire! Cyber Attacks!  Every one is a disaster.

You see it in the news every minute of every hour of every day.  Either some natural disaster or some man made despicable act has occurred somewhere on the planet.  The result is death, destruction and disruption.

Everyone is trying to pick up the pieces.  They are trying to figure out what has happened, how to come to grips with the catastrophic results,  and how to get things going again.

Depending on what the disaster is people can be struggling to know where they can get the basics such as food, water and shelter.

This is where the Supply Chain must kick in to gear: business continuity and disaster recovery.

Today’s Reality

Early in my career I remember being asked to create and annually update Disaster Recovery plans.  They seemed rather administrative at the time and took away valued time to work on more pressing matters.  Further it seemed unlikely that they would ever be dusted off and used.

But today’s reality is much different.  Every government organization, institution, company, and individual should have some level of Disaster Recovery plan in place, updated, and ready to use at a moment’s notice.

Disaster Recovery

And most disasters, however big or small, seem to disrupt the Supply Chain in some fashion.  As a family or individual you may be disrupted in your ability to get food, water or power.  As a company you may be disrupted in your ability to get your raw materials delivered, your goods processed, or your products shipped to your customers.  And as a government you may find that your citizen’s lives are upended and that your institutions cannot function.

Whatever the disaster, and whatever the level of disruption, your Supply Chain is impacted and you need it back up and running as quickly as possible.  This is further complicated by the fact that most Supply Chains have become increasingly complex over the years.

Elements of a Supply Chain Disaster Recovery Plan

Fundamentally your Disaster recovery plan must be focused on:

Disaster Recovery

People First!

You must ensure that your employees are ok and will be ok.  Their safety, security and well-being must always be first and foremost on your mind.

Proactive, Real Time Visibility

You should have end to end real time visibility to your entire Supply Chain.  Even if this visibility is not automated you need communication channels established.  Ideally you have early warning mechanisms such as those we see when meteorologists are forecasting the timing and impact of hurricanes and storms.

The more visibility you have, and the more notice you can get, will enable you to initiate your Disaster Recovery plan quickly and proactively.

Communication Strategy

While it may seem cliche, Communication is key!  All Stakeholders whether they be employees, customers, suppliers or Executives will want to understand the state of the nation and the actions and direction being taken to get things back on track.  There must be access to individuals at all levels anywhere in the world instantaneously.  And if communication lines are corrupted then there must be alternative means of making contact.

End To End Supply Chain Mapping

Your Disaster Recovery plan should include a comprehensive mapping of your entire end to end Supply Chain.  Key nodes in your Supply Chain, whether they  be Suppliers, Manufacturing Plants, Distributors, Customers, Logistics Carriers, or other Channels should be well defined.

Scenario Planning

While you cannot predict every eventuality you should be able to model a number of different scenarios in your Disaster Recovery plan.  With these scenarios you should then be able to model out (even manually) where your Supply Chain will be impacted and what corrective or preventive measures need to be put in place.

Continuity of Supply Restoration

The disruption of supply is a most likely scenario in a disaster.  As such you need to consider how to mitigate this impact in your Sourcing strategy.  

Depending on your business you should consider dual sourcing opportunities, new supply contingencies and alternatives,  supplier readiness, process and equipment redundancies, and outsourcing options.

There are far too many single points of failure in Supply Chain which makes any disruption in continuity of supply catastrophic.

Capacity Contingencies

As you consider your continuity of supply options you should also consider   the capacity available in the Supply Chain.  Low to no cost options to implement points of redundancy, or to secure greater capacity, should be considered strongly.

IT System Availability

In most companies any disruption to their systems will wreak havoc almost immediately.  As an E-Commerce company and downtime on your web site can be catastrophic.  Strategies including items such as Cloud Computing, System Backups, and Dual Data Centres can help to get your systems back up and running quickly and seamlessly.

Logistics Capacity

If your business requires the movement of goods then you must work closely with your Logistics partners to ensure that they have the capacity and capability to respond to and disastrous situations as well.  Depending on the nature of the disaster you must also factor in the fact that other people and companies will be relying on these same Logistics carriers for support.  You will be competing for constrained resource at the same time as everyone else.  Don’t assume that you can get the support you need in a vacuum.

Inventory Positioning

This is also a function of your business model but any opportunities to viably diversify the physical location of your inventory will give you access to  supply lines which can mitigate inventory impacts.  If you have multiple channels that hold goods throughout your Supply Chain you may have options to move those goods to where they are needed most in a crisis situation.

Most importantly it is critical to design your Supply Chain to be lead-time agnostic.  That is you should engineer your Supply Chain such that you can order, fulfill and replenish goods quickly as a normal way of operating your business.

Disaster Recovery Conclusion

No one wants to experience a disaster nor do they wish that on anyone else.  But they happen!  Having a Supply Chain Disaster Recovery Plan is not just a nice to have document so that you can check a box on an audit.  It is mandatory in this day and age.

Your Disaster Recovery Plan must enable you to restore your Supply Chain to good working order in the shortest time possible.  Speed of execution is key which is a standard expectation in the world these days.

Remember that people always come first!  And when the chips are down ensure that everyone knows, and sees, that the Supply Chain team is there to put the pieces back together as quickly and as efficiently as possible!

Originally published on September 19, 2017.

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