Steve Geary is adjunct faculty at the University of Tennessee's Haaslam College of Business and is a lecturer at The Gordon Institute at Tufts University. He is the President of the Supply Chain Visions family of companies, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly.
Editor's note: The havoc created by the Superstorm Sandy is first of all a human catastrophe, and our thoughts are with those who lost so much. The storm also created enormous problems for businesses, especially those that depend on a smoothly operating supply chain. In the wake of recent events, we thought it would be worthwhile taking a look at how one company, the restaurant chain Waffle House, executes a disaster response plan that gets affected outlets up and running quickly. The following story, written by Editor at Large Steve Geary, is previously unpublished.
According to The Wall Street Journal, when disaster strikes, the head of the Federal Emergency Management Agency (FEMA), Craig Fugate, looks to a couple of key indicators to get a sense of the severity of the emergency. One of them is the "Waffle House Indicator."
If Waffle House is closed in a disaster area, the index is red and Fugate knows he has a serious challenge on his hands. If Waffle House is serving a limited menu, his index is yellow and he knows things are bad. If Waffle House is running full bore, Fugate knows that there is work to be done but he can set the index to green.
Hurricanes. Tornadoes. Earthquakes. Volcanoes. Floods. Blizzards. Wildfires. When any of these events occur, when the rest of us are sandbagging the dock doors, trying to keep the food in the freezers from spoiling, or scrambling to get our families out of danger, Waffle House steps it up.
Waffle House restaurants rarely shut down, even in the face of a hurricane or a tornado, and when they do, they are generally back up and running in short order.
Waffle House is a master at disaster response. The chain of some 1,500 restaurants known for being open all day, every day is ranked by some as one of the top companies in the world for disaster response, mentioned alongside such obvious contenders as Wal-Mart, Lowes, and Home Depot.
Waffle House plans for the worst and only hopes for the best. The company has established crisis management processes that include manuals for the restaurant managers on how to reopen after a disaster. Contingency plans spell out what to do if there is no power or no ice. Managers know how to import generators, food, water, ice, and cooks from outside the disaster area to quickly re-establish service—regardless of the official government response.
MOBILIZING THE RESPONSE
When a natural disaster is forecast, Waffle House dusts off the plans and opens up the war room at corporate headquarters in Norcross, Ga. "We have folks staged, ready to roll: food trucks, generators, construction teams," says Pat Warner, a vice president at Waffle House.
Waffle House even has a mobile command center that can be dispatched to coordinate logistics when disaster happens. Known as the EM-50, the same tag Bill Murray's character and his crew gave their "Urban Assault Vehicle" in the movie "Stripes," it's an RV outfitted with satellite communications and a wireless network, according to Warner. The unit lives at corporate headquarters in Norcross and is ready to roll at all times.
Once the EM-50 has arrived on the scene of a disaster, operational control passes from the war room to a senior executive in the affected area. Using the EM-50 as a command post, the executive takes over directing the response, relaying information back to corporate headquarters on matters like which stores are going to open, where to deploy generators, and where to send supplies, Warner says.
The decision to outfit an RV as a command unit came in the wake of Hurricane Katrina. "After Katrina, we had a lot of trouble with communications," explains Warner. "We decided we were going to invest in a mobile command center." Since that time, the EM-50 has pulled out of the parking lot for natural disasters including Hurricane Gustav, Hurricane Irene, and the Alabama tornadoes.
GOOD BUSINESS
In the wake of a disaster, an individual Waffle House can see sales triple. By being ready, having logistics plans to provide needed services in the wake of a tragedy, the Waffle House does well by doing good.
When asked about the cost of the company's disaster response, Warner acknowledges that the cost is high but adds that it's more than a matter of dollars and cents. "Short term, it's not the best business decision," he says, "but it's an investment in the future and the right thing to do." That's a business strategy that is hard to argue with, and it generates goodwill long after the disaster is over. "It's in our culture, being there and staying open," Warner says.
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.