The déjà vu of Hurricane Sandy and lessons for the supply chain
Andrew Atkinson, Director, Product Marketing, E2open - Monday, November 05, 2012
In the wake of superstorm Sandy, overhead images of the ravaged New Jersey shore looked reminiscent of those from post-tsunami Japan. For many, there was a sense of déjà vu. While this may have been startling, it shouldn’t have been surprising.
About a year ago, Edward Toung, Vice President, Asia Pacific, at E2open, posted the following on this blog:
“2011 was hard-hit by natural disasters—but can we really afford to expect anything less for 2012 and beyond? A quick look at the recent past suggests that disruptions in the macro-environment are pretty much par for the course.”
After Sandy’s devastation, those words seem prophetic.
While the personal impact of the storm was heartbreaking, the impact on commerce, particularly on supply chain operations, reverberated across the nation. An article in Supply Chain Management Review detailed the disruptive scope:
- Most airports in the New York City area were closed for extended periods of time.
- Seaports stretching from Baltimore to Boston were closed to contain traffic.
- Roads and railways were closed, including major bridges into the New York City metropolis.
In the face of this trauma, markets and organizations relied on their supply chains and information networks to respond.
A piece in the Wall Street Journal detailed how big-box retailers met the need of consumers responding to the storm. The article notes this sector is accustomed to leveraging their transportation and supply chain networks to respond quickly to natural disasters. Emergency operations centers at corporate headquarters monitored the storm with GPS systems to reroute supplies to affected areas.
According to the Huffington Post, drugstores relied on industry and non-profit organizations to fill prescriptions in hard-hit areas. An industry organization called Rx Response, established by chain drugstores, pharmaceutical companies, and other health care groups after Hurricane Katrina, used an interactive map on its website to broadcast where drugstores in storm-ravaged areas were open to fill prescriptions.
Moreover, an article on MedCity News underscores how important digital networks have become in these kinds of situations. As patients move between hospitals, being able to exchange information is critical. The data center for the SHIN-NY information exchange in New York, the principal healthcare exchange in New York state, had fully redundant backup in Texas, capable of taking over in milliseconds should a failure have occurred.
In a Wired article on supply chain impact, Shoshanah Cohen, director of the Global Supply Chain Management Forum at Stanford University’s Graduate School of Business, notes that “the most flexible supply chains have three things going for them: scale, transparency and leverage.”
This echoes the comments of Dr. Philip Kaminsky, Department Chair, Industrial Engineering and Operations Research, University of California, Berkeley, posted in this blog in January of this year: “If 2011 taught us anything, it’s that our supply chains need to be better prepared to deal with global disruptions. From my perspective, being better prepared means being more flexible—and that means having the systems and processes in place to sense and quickly adapt as environmental and market conditions shift.”
Perhaps it is obvious that to withstand and recover from events such as superstorm Sandy, people from all walks of life, and from companies in all kinds of markets, must rely on effective collaboration to meet the task so suddenly at hand. Toung reminds us that the importance of collaborative execution extends to everyday procedures for the best supply chains. “The ability to access information from every part of the trading network, and the ability to view this information within a real-time context, are both critical aspects of the collaborative execution framework: first, to identify disruptions as they occur; and second, to inform the range of options available to resolve them.”
Doing this, we can be better prepared for the inevitable déjà vu of tomorrow.
Comments
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It will be interesting to see how (and if) Black Friday is affected by the supply chain disruptions caused by Sandy. I’ve come across a few articles that predict shortages for some stores just because everything will be so backed up.