How can manufacturers strengthen their supply chains against disruption in the wake natural disasters? Asks Chris Kingshott – managing director, manufacturing, Wincanton.
Natural disasters can take many forms, from blizzards to volcanic eruptions, and all have varying levels of severity – in some cases having a devastating effect on human life.
Regardless of size, they can constitute one of the most severe disrupters of business and supply chain continuity, and also threaten economic output and growth in some of the world’s key cities – especially for those located in the emerging markets.
The devastating Japanese earthquake and tsunami of 2011 caused significant business disruption, and more than 85% of UK organisations suffered from some form of disruption to supply – many without the proper risk management processes in place.
Natural disasters are incredibly difficult to predict and as a result are challenging to prepare for. All too often businesses learn from experience before contingency plans are put in place retrospectively.
As well as the devastation caused to people’s homes, the flooding in the UK in December last year saw manufacturing businesses take a big hit.
So bad in fact, that in Yorkshire an agreement has been made to create an emergency fund for manufacturers stricken by flooding, to get them back on their feet as quickly as possible.
These floods are an example of the fact that natural disasters don’t differentiate between emerging or established countries and economies, the impact can be equally as damaging for either.
However, there are a number of things that the UK’s manufacturing businesses can do to ensure that they are as prepared as possible for any eventuality:
Consider the alternatives
Manufacturers may experience disruption in getting stock via their existing channels. If, for example, roads and ports are blocked, it’s worth considering alternative transport methods such as aeroplane rather than sea freight.
Firms could add extra capacity into their system by taking on alternative suppliers, such as adding more means of transport and having emergency staff on stand-by.
Greater flexibility could also be developed in the supply chain through interchangeability of product, processes, and even plants.
By considering these alternatives, manufacturers are able to maintain supply and manage costs more effectively.
Ensure that you have everything prepared in advance
The key is to ensure that everything is pre-arranged with any external suppliers.
Surprisingly, one of the biggest demands during flooding is for fresh water. At Wincanton, we provide a standby emergency water service, in which customers have the opportunity to pay a supplement for Wincanton to deliver water to households and businesses in times of need.
As a business of considerable scale, during the UK’s December floods we engaged with our local communities and were able to provide additional manpower to help our customers with the clean-up.
It’s essential to ensure that manufacturing businesses have back-ups of everything that the organisation simply cannot run without.
This includes ensuring there are emergency power systems in place and having seasonal stock builds during seasons that sites may not be as easily accessible.
Without proper employee training, it’s incredibly difficult to maintain the smooth running of a business, even if contingency plans are already in place.
It’s essential to ensure that all staff know what to do in the event of a natural disaster in order to maintain an efficient process. This includes training on everything from informing customers and briefing external suppliers, right through to media relations.
It’s worth remembering that the size of a business doesn’t necessarily affect how much of an impact a natural disaster will have: if roads are shut and alternative routes haven’t been put in place, it will affect everyone equally.
No matter what a business’ size, planning for disasters is essential.
Natural disasters will always have an impact on the manufacturing supply chain. At Wincanton, our job is to be flexible and work with our customers to anticipate these events and put effective plans in place.