When you think of your best defenses against disaster, the weather guy is probably not the first thing that comes to mind. But maybe he should. Threats to your operations can come from all venues—terrorists, fires, chemical spills—but an awful lot of them seem to involve weather: tornadoes, blizzards and ice storms, hurricanes and floods.
Though any one of these weather events could completely disrupt the supply chain, they're rare enough that they may only rate mention in, say, Section 19-G of the corporate disaster plan. That's a risky way to do business. "You wouldn't think of operating a distribution center without a fire alarm," says Michael R. Smith, CEO and founder of WeatherData of Wichita, Kan., "but it's amazing how many companies try to operate their weathersensitive businesses without some kind of weather alarm system."
In fact, it seems that many companies are trying to run their businesses without much in the way of a disaster preparedness plan at all. According to a recent survey, the 2003 Protecting Value Study conducted by commercial and industrial property insurer FM Global, the Financial Executives Research Foundation and the National Association of Corporate Treasurers, 88 percent of financial executives and 83 percent of risk managers admitted that their companies were not entirely prepared to recover from a major disruption to a top revenue source. That same study singled out property-related hazards, such as fire and natural disasters, as the greatest threat to revenue sources.
There's not a thing you can do to prevent a natural disaster, of course. But there are many matters you can think through in advance when it comes to recovery: Who's responsible when a tornado rips through your loading dock and damages a carrier's trucks? What happens to the urgent shipment that requires pickup in Alabama when your fleet is snowed in somewhere on Michigan's Upper Peninsula? How can you protect your delicate robotic loading equipment from lightning strikes?
You may never have to answer these questions. But then again, you might. For those who aren't taking any chances, we offer five tips on preparing your supply chain for stormy weather: