Managing Supply Chain Risks in the Face of a Hurricane

Recent natural disasters have brought the vulnerability of the supply chain to the forefront. The Atlantic Coast recently saw its most powerful storm in more than a decade in the form of Hurricane Matthew. Several of the states in its wrath were home to supply destinations, logistics and transport hubs, and key ports. In fact, the Business Information Industry Association reports that the ports involved make up nearly 20 percent of American container import shipments and half of all Gulf of Mexico and East Coast imports.

The hurricane-prone southeastern part of the country is home to vital supply chain links that can be quickly placed in danger when the big storms strike. The situation with Matthew was compounded by the fact that Hanjin was in bankruptcy and causing delays. While a number of container ships were able to make some adjustments and arrive ahead of the storm, this placed a strain on the supply of dockworkers, who suddenly found themselves handling many more ships than usual.

Recipe for Chaos

This would be bad enough if it was business as usual, but when hurricanes loom, retailers on the East Coast tend to order extra supplies and necessities. Grocery stores struggle to keep bottled water and canned goods in stock, and home improvement stores must meet an incredible surge in demand for hurricane relief supplies like generators, flashlights, and batteries. Goods sometimes need to be diverted from inventory that is bound for other regions to get all the pieces in place as far ahead of the storm as possible.

Pharmacies, meanwhile, have to take measures to safeguard perishable pharmaceuticals during potentially long power outages while also ensuring they have enough medications on hand when businesses reopen. Many customers refill their prescriptions ahead of time in case power ends up being out for a long period of time, adding further strain. The fuel supply chain can also be greatly affected by storms.

Retailers need the supply chain to run smoothly in any weather. This can be achieved by using analytics to determine buying patterns, having access to accurate and up-to-date inventory status, and having alternative suppliers at the ready. It’s impossible to predict what Mother Nature will throw at us and when, which is why having the right systems and preparedness plans in place can make all the difference in getting through a catastrophe.

This blog post was based off of an article from Logistics Viewpoint. View the original here.

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