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After the pandemic, companies got really serious about considering risk in their global supply chains. Mostly this had consisted of considering alternatives to China. But on September 28, we were once again reminded of another kind of supply chain risk when Hurricane Ian hit the west coast of Florida. Among the tremendous destruction of homes and the loss of life, the destruction and interruption of supply chains were also evident.
In western Florida, it may be months or even years before logistics networks comprised of ocean ports and airports, roadways, warehousing, telecom, and other support services are rebuilt and operations are restarted. And this is just the first major hurricane of the season.
Disaster recovery plans
Even when companies develop plans for risk management, black swan events such as the pandemic or an unusual weather event can leave companies unprepared and struggling. Your disaster recovery plan should be a flexible framework that can be adaptable to different situations and at a minimum should include:
•Immediate plan for keeping employees safe
•Structured response team with clear lines of authority and defined responsibilities
•Communications plan for management, employees, customers, and suppliers
•Financial response plan for expenditures in emergency situations when there is no time for formal spending approval
•IT plans to recover systems and data to run your business
•Supplier recovery plan and alternate sourcing approach.
Use of AI in risk mitigation
Unfortunately, developing plans may not be enough. To improve risk mitigation and response, companies are now turning to software for assistance.
I recently interviewed Bindiya Vakil, the founder and CEO of Resilinc on the Frictionless Supply Chain Podcast. Resilinc uses AI (artificial intelligence) to scan worldwide publications, social media, and internet postings for breaking news or unusual events as they are just beginning. For example, in December 2019, Resilinc noticed growing chatter about a strange virus in Wuhan, China. Resilinc was able to notify its customers who had suppliers in the vicinity and surrounding Hubei Province, giving them advance warning weeks ahead of most other companies. Resilinc’s customers were able to move supplies out of Wuhan before the city was completely shut down and isolated.
Resilinc also offers hurricane simulations to help companies with suppliers, customers, or operations in likely hurricane-target areas. This kind of advanced planning and simulation can drive better disaster response strategy and long-term planning in site selection and supplier networks.
This is the future of supply chain risk management.
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The results of our annual salary survey are in, and supply chain professionals have never been more in demand, and commanding…
Tue, November 22, 2022 – 2:00 pm EST
