As the 2013 Atlantic hurricane season gets underway, all companies - even those without operations on the U.S. East Coast - should utilize automated data collection software to best prepare for probable supply chain disruptions.
Last month, the National Oceanic and Atmospheric Administration predicted that during this year's hurricane season, which stretches from June through December, there is a 70 percent chance that between 13 to 20 named storms, which are natural phenomenon with winds of 39 miles per hour or higher. Of that group, seven to 11 of those named storms could be hurricanes with winds at 74 mph or faster. NOAA noted that its predictions are above the norm in regard to tropical storm and hurricane activity.
"With the devastation of Sandy fresh in our minds, and another active season predicted, everyone at NOAA is committed to providing life-saving forecasts in the face of these storms and ensuring that Americans are prepared and ready ahead of time," said Dr. Kathryn Sullivan, NOAA's acting administrator. "As we saw first-hand with Sandy, it's important to remember that tropical storm and hurricane impacts are not limited to the coastline. Strong winds, torrential rain, flooding, and tornadoes often threaten inland areas far from where the storm first makes landfall."
Hurricane Sandy's Supply Chain Optimization Lessons
A spate of hurricanes over the past 10 years struck the Eastern Seaboard and the Gulf Coast, including such notable storms as Katrina and Isaac. Nevertheless, businesses that do not think it is worthwhile to adopt automated data collection software to optimize their supply chains in the wake of a natural disaster need to only to consider the devastation wrought by Hurricane Sandy last year.
The storm knocked down power lines, flooded streets and brought economic activity to a standstill in some of the most densely populated areas on the East Coast, most notably New York City. As a result of the hurricane and its aftermath, companies had to find alternative shipping and manufacturing locations to make up for the loss in production. According to Capital Business Credit's last quarterly Global Retail Manufactures and Importers Survey of 2012, 44 percent of businesses polled said that Sandy made it more difficult for them to ship items, and 32 percent indicated that they had to decrease the number of reorders sent to retailers during the busy holiday shopping season as a result of the storm.
Hurricane Sandy especially devastated food supply chains, according to the University of Minnesota's Food Thought Blog. Because the storm affected such a large territory, the Department of Agriculture needed to issue $15.5 million in disaster aid to help the food producers and manufacturers adversely affected by the hurricane. Not only were operations at many food distribution hubs brought to a standstill last year as a result of the storm, but grocery stores and other food retailers lost hundreds of pounds of inventory because of widespread power outages and flooding.
How Automated Data Collection Software Helps Companies Cope
Natural disasters - especially those on the scale of a hurricane like Sandy - can never be prevented and will always cause some disruption to global supply chains. However, the effects of any major calamity can be mitigated, so long as businesses use automated data collection software across their entire supply chain, collaboration software professional Greg Johnsen wrote in Forbes last year.
Whether the disaster is man-made or a force of nature, the steps businesses must take remain the same, according to Johnsen: Take stock of the situation and reroute everything accordingly. This may seem like a simple enough task, but it is fraught with potential difficulties as the global supply chain becomes more fragmented and disparate.
"When disruptions like this happen, business is impacted in several ways," Johnsen wrote. "First, companies have to reroute carefully orchestrated supply lines, which adds days and extra logistics costs. More importantly, companies must scramble, without good information, to get the right inventory to the right place at the right time. Failure to do so means empty shelves, assembly line shutdowns, lost profits and unhappy customers."
However, automated data collection software can greatly facilitate these efforts. With these solutions in place, companies can almost instantaneously take stock of their existing supply lines and reroute shipments accordingly. In addition, supply chain optimization solutions enable organizations to utilize different locations to pick up the slack and keep the entire business running smoothly. For example, the Food Thought Blog noted that after Sandy, Anheuser-Busch temporarily turned a beer production line into a water canning operation.