Is your supply chain prepared for disaster?

Hurricanes, earthquakes, floods, tornadoes and wildfires. In the past two years, more than 50% of businesses have experienced an unforeseen interruption and 81% of these disruptions have caused businesses to close one or more days. Supply chain practitioners often talk about not designing a company’s capabilities for exceptions to avoid putting in place unnecessarily costly and cumbersome infrastructure.

However, not designing for exceptions is very different from having a plan in place to ensure business continuity and recovery after a natural disaster. In 2017, weather and climate-related disasters cost a record $306 billion in the United States alone.

In addition to the destruction and displacement it caused in Texas, Hurricane Harvey significantly disrupted supply chains around the world for months. According to FEMA, Hurricane Maria affected over 18,000 businesses in Puerto Rico and The Virgin Islands, including medical device manufacturing capacity that required health care providers to find new suppliers or alternative products.

Wildfires ravaged Northern California and severely damaged major rail and trucking routes. today’s global supply chains have multiple points of production, manufacturing and distribution. Disruptions like those above can bring businesses to a complete standstill.

Factories, warehouses, shipping terminals and stores are all vulnerable to the loss of critical infrastructure as well as technology, people and power. When it comes to risk, A.T. Kearney believes there is no such thing as being too prepared: the more prepared, the greater a company’s ability to minimize disruptions and recover quickly.

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