Worlds Away: The Disaster You Didn’t See Coming

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A volcano is erupting on the same island recovering from an earthquake and a tsunami. More disturbing is that none of the 22 buoys spread over Indonesia’s open water to help monitor for tsunamis had been operational for the past six years, the New York Times reported, citing the disaster management agency’s Nugroho.

As rescue and recovery operations unfold on Indonesia’s Sulawesi island, where a massive earthquake and ensuing tsunami has killed at least 1,400 people and altered the landscape, a volcano has is now erupting. Mount Soputan, on the northern end of the island, shot ash nearly four miles into the air early today (Oct. 3), NBC News reports.

As detailed in Bloomberg, the government is focused on repairing a damaged airport in Palu and rushing heavy equipment and personnel to the coastal city, where workers are continuing to search for possible survivors trapped beneath the debris of a collapsed buildings.

Next will come a massive and expensive reconstruction effort to restore power systems and provide shelter for the estimated 48,000-plus who have lost their homes and businesses. The government on Monday appealed for international aid for the relief and rehabilitation efforts.

The island of Sulawesi, which features several long peninsulas radiating from a mountainous center and some of the world’s best diving sites, is primarily an agricultural area focused on coffee and nickel ore production.

While this event may not directly affect your specific business today, it is critically important that we are constantly aware of world events that may impact our businesses in the long term.

What Can Businesses Do?

Disasters locally and worlds away can have significant impacts.  As a result of Hurricane Florence:

  • North Carolina’s poultry sector suffered the loss of at least 3.4 million chickens and turkeys as a result of impacts
  • The state’s swine losses are now estimated to be 5,500 hogs, according to industry estimates
  • North Carolina is the largest producer of sweet potatoes in the nation, and the crop was only about one-fourth harvested before Florence struck
  • South Carolina will also experience impacts to peanut, cotton and tobacco production

Every business should periodically formally assess their supply chain risks as part of a business impact analysis. Even if you have regularly conducted periodic assessments (and especially important if you have not), it is imperative that you conduct a new supply chain formal risk assessment in light of possible, like global events.

  1. What are your unique risks?
  2. Do you have a clear understanding of how such a disruption would impact your operations?
  3. Give thought to your plan(s) for supply chain disruption consequence management.

The keys for increasing resilience of your supply chain and managing a supply chain disruption crisis are to Predict.Plan.Perform.®

It is important to get your supply chain risk assessment on track. Our most recent study on Vendor Resilience is open for participation, and participants will receive a complimentary report, further aiding your vendor and supply chain awareness and readiness analysis.

This survey is used to assess vendors, suppliers and/or third party organizations in respect to business continuity/ resiliency planning and how we, as a profession, incorporate their business continuity/ resiliency programs into our own respective companies.

Questions to Ask Today

In a past joint study with Georgia Tech, Firestorm researched supply chain business continuity preparedness. We found that the majority of suppliers either do not have business continuity plans or have business continuity plans that are not sufficiently robust to ensure continuity of delivery to customers in the face of a natural or man – made disruption.

  • What steps can you take now to mitigate or reduce these risks?
  • Can you take steps now to add resilience to your supply chain(s)?
  • Can you get everyone in your business “on deck” in this assessment and planning effort?
  • Do you have a supply chain disruption crisis management process in place?
  • What is your plan?
  • What alternative backups do you have prepared to utilize or adjustments to make in your business processes if there were a major supply chain hiccup?

Business continuity is frequently equated only with IT recovery. While restoring IT is vitally important after a disruption, recovering data is only one part of a comprehensive business continuity program. Simply requiring suppliers to have and maintain a business continuity plan, while better than nothing, is unlikely to result in major improvements in supplier resilience since most companies will aim for minimal compliance and pass any costs along to their customer.

A more robust response involves establishing business continuity criteria as part of competitive requests for proposals (with detailed business continuity criteria defined), incorporating business continuity planning and performance (where extant) in annual supplier ratings, and working in close cooperation with suppliers to develop thorough, joint business continuity plans.

The keys for increasing resilience of your supply chain and managing a supply chain disruption crisis are planning and preparation. Follow up with the many supply chain disruption planning resources to enhance your readiness. It is important to get your supply chain risk assessment on track. Learn More

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