Supply Chain Weather-Proofing

August 8th, 2006 at 06:30am David Bush - Iasta

When devastating storms, hurricanes and other natural disasters strike, they can cause chaos, product shortages and suffering. Supplies are often short in disaster areas, with customers frantically searching for essential items. However, adept use of sophisticated information tools allows retailers and suppliers to moderate the effect of natural disasters by “weatherproofing” the supply chain. That means diverting product shipments, placing inventory in forward locations and anticipating potential spikes in demand.

      Michael Matacunas in Weatherproofing Your Supply Chain with Information Transparency,Responsiveness, Global Logistics & Supply Chain Strategies (p. 88)

I could not have said it better myself! With natural disasters on the rise, planning for unexpected disasters is now more important than ever. This can be accomplished by using state-of-the-art information systems to design your supply chain, anticipate spikes in demand, and make sure supplies are in the right place at the right. This involves designing a flexible supply chain that can handle disruptions to various parts of the chain and divert around the affected areas and implementing systems that monitor weather alerts 24/7 and help you frontload product when a disaster is likely.

This requires information transparency, which, as per the article, has several components, including:

• the ability to analyze products in the chain - including quantities, location, shipment schedules, and carrying costs,
• visibility further back in the procurement process - tracking movement from the manufacturer to distribution centers,
• the ability to locate products that have been acquired but not delivered at any point in time, and
• flexibility through the sharing of intelligence and key supply chain details with business partners.

This means that you, as a sourcing professional, must be sure to

• select inventory management systems that are capable of performing the needed analysis, integrating with feeds from the manufacturer regarding product status, and answering product location queries at any time,
• select systems that are capable of sharing the required intelligence with key suppliers and business partners,
• select suppliers who are willing to provide the required level of transparency and work with you to design “weatherproofed” supply chains,
• spread your purchases among multiple suppliers not geographically collocated,
• spread your distribution centers over a large geographic area, and
• make sure you have multiple routes and methods of product transportation between your supply centers and distribution centers.

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Entry Filed under: General, Global Supply Issues/Risk, Suppliers