The Sept. 11, 2001, terrorist attacks which led to the establishment of the Department of Homeland Security began a push to more integration of governmental resources for extreme events, and Hurricane Katrina prompted increased preparedness for natural events. Even with improved resources and planning, the scale of the failures, supply chain and otherwise, during Sandy was tremendous. The storm exposed challenges not previously experienced, partially due to population density and urban composition of the impacted area. Supply networks were hampered by fuel distribution failures, port and road closures, and destruction of critical communications gear.
Effective response to and recovery from these events is not going to be accomplished solely by government agencies and heroic work of nonprofit relief agencies. The for-profit private sector holds the information and resources to advance real progress on these efforts. A drive through wholesale distribution centers and consideration of last-mile issues illustrates that our complex distribution structure is not a good candidate for command and control. FEMA is wisely pursuing a “whole community” approach. The National Strategy for Global Supply Chain Security now under development focuses on inclusiveness and the need for trusted relationships. Our people, markets, capacity and reputations are in play so we best know how to engage effectively.
Risk at the enterprise level and supply chain risk management are today mainstays at industry meetings. Consider: A major food service provider includes specific provision for accomplishing distribution in pandemic conditions. Other distributors have procedures for defining order profiles to be shipped on a push basis into disaster-impacted areas. Carriers prepare drivers to make decisions about when to shelter in place and where to meet should there be an extreme event. A few companies have organized to engage collaboratively with government and nonprofit relief agencies as part of their business model and have the scope and scale to do so. Most companies do not know how to engage and a DHL study reported that 23 percent of large companies fail to include their entire supply chain in continuity planning.
The American Logistics Aid Network’s (ALAN) participation in projects concerning supply chain interdependencies and vulnerabilities in a catastrophic event points to the need for further conversation. Events with cascading consequences like Sandy and the Japan earthquake/tsunami/nuclear event or the Haiti earthquake with widespread institutional decapitation and infrastructure destruction need deep dives to understand what works and what doesn’t. Improvements have been made, there is more focus on the problem, but there remains much action to be taken to ensure supply chain resiliency.
Certain themes are clear. SCRM will evolve and companies further down the supply chain hierarchy will be drawn into the continuity planning and resilience activities of their upstream partners. Government policy and regulation will be increasingly present and business has a stake in their evolution. CSR efforts will involve greater employee and company engagement in the needs of the “whole community.” ALAN’s position at the intersection of nonprofit, government and business is a vital window for all three.
Keywords: supply chain risk management, ALAN, corporate social responsibility, relief logistics, humanitarian supply chain initiatives