A natural disaster in a far-off land has interrupted the supply chain and pretty much stopped all data collection from the stricken portion of the world. What can a good manager do to minimize the down time and losses that will result? Well, if he or she is prepared for the situation, it won't be much of a problem. However, according to a report in a Kinaxis blog, if there's no supply chain management strategy in place, the disaster could be far more costly.
Have A Risk Management Plan
It's not unusual for companies to have a Supply Chain Risk Management strategy on the books to avert potential disasters or breaks, but many companies are not well-trained or understanding of the protocols designed to protect the chain. SCM World released some tips that could help cushion the blow should an incident impact the supply line, including how to resolve the age-old conflict between efficiency and risk mitigation. Having back-up suppliers in an undamaged region is critical, but companies should also have other tiers of suppliers in the pipeline to ensure an uninterrupted flow of goods, the Kinaxis report stated. Sourcing suppliers from multiple areas and designing reserve options to keep product moving are very difficult but necessary. It can also be next to impossible to get top-level approval for the tight business environment we're in currently.
Secure The Main Facility
Natural disasters aren't just limited to overseas supply plants. They can happen right in our own backyard and disrupt the supply chain at the door. A Business 2 Community article gave detailed steps on how to batten down the hatches if a major storm like Hurricane Sandy or the February 2012 epic winter snow storm should shut down supply chain operations.
Backing up the data is a no-brainer, along with making sure the operation is insured against catastrophic loss. Companies can often fix problems incurred by a storm's wrath if they have the resources available. Without having key components of the supply chain covered by a policy, after the damage is done, there may be no resources left to carry on.
An uninterrupted power source or generator will serve in good stead, and a company may want to consider a wide range of locales for critical aspects of the supply operation. We can't stop big events in the weather or natural world, but preparing for what Mother Nature throws at us can minimize productivity losses and help a company bounce back from natural catastrophes quicker than if they hadn't put a Risk Management protocol in place.