Minimizing the Impact of Future Disasters with Supply Chain Visibility

As natural disasters occur more regularly due to climate change, supply chains must rely on visibility to mitigate disruptions

Overall, Hurricane Laura caused more than $14.1 billion in damage and 77 deaths. Carriers and ports paused operations, Union Pacific curtailed operations across parts of their network, trucking and van rates jumped in anticipation of the storm, while mandatory evacuations restricted UPS, FedEx and the postal service across Louisiana and Texas.

With 25 named storms, 2020 is currently the second most active Atlantic hurricane season on record, causing considerable damage to the nation’s supply chains. Unfortunately, the COVID-19 pandemic has increased supply chains’ vulnerability to disruptions related to hurricanes, according to the 2020 Tropical Strom Season Outlook from Resilience260 and Riskpulse. Industries with cold chains, such as pharmaceutical and food and beverage firms, have been strained by COVID-19 and now have to contend with preparing for and reacting to the rest of the hurricane season. COVID-19 has strained the resilience of companies with cold chains, and now these companies are faced with dealing with an unpredictable storm season. Because of this, supply chain managers will need to proactively plan for delays in both production and transportation logistics.

Meanwhile, the west coast is facing a multitude of crises such as wildfires, heat waves and blackouts, on top of a lingering pandemic. So far, 8,500 fires have burned 4,267,386 acres in California, making 2020 the largest wildfire season recorded in California’s history. Due to the severity of this year’s fire season, logistics management companies have had to overcome several hurdles, including dangerous conditions for drivers, halted routes, schedule delays and product losses.

Clearly, COVID-19 has exposed blind spots in supply chains that hurricanes, floods, fires and other natural disasters will only intensify. Given the need for high-demand products like personal protective equipment (PPE) and medications, the pressure to operate as efficiently as possible has never been greater.

Vaccines are More Vulnerable During Natural Disasters

Vaccines are particularly vulnerable, as they can lose potency or even be destroyed every time they’re exposed to temperatures above or below the recommended temperature range. Because of this, pharma companies need specific information about the condition, timing and location of products, raw materials and product subcomponents based on real-time data to ensure product safety and efficacy.

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What’s puzzling is that even though 21% of supply chain professionals named this type of visibility as their biggest challenge, only 63% of organizations have yet to deploy technology to monitor supply chain performance. As businesses are exploring new methods and technologies to safeguard their supply chain operations, they must account for real-time visibility, not only into attributes like temperature and location, but also into areas such as weather and traffic conditions to prepare for the aftermath of these tragedies.

As natural disasters such as tropical storms, fires, earthquakes and other disasters continue to devastate weakened and vulnerable global supply chains, here are seven ways to mitigate cold chain disruptions and be better prepared for the next natural disaster looming on the horizon.

1. Map and visualize key assets in the supply chain, and flag those that are most likely to experience disruption. A storm-related delay could create serious issues, especially for pharmaceutical manufacturers. There are key parts of the country that are always prone to hurricane damage, such as Florida, Texas and other metropolitan areas on the East Coast such as New Orleans, New York City and Virginia Beach. Organizations need to identify which supply chain links such as ports, warehouses, interstates and railroads in these areas are vulnerable to natural disasters such as high winds and flooding. By leveraging supply chain visibility software, companies can monitor potential disruptions and communicate any transportation constraints, routing issues, power outages or other issues to all cold chain nodes. So, by analyzing the real-time data, they can understand the impact such disasters can have on products and shipments and adjust accordingly to minimize risk.
2. Develop a crisis management playbook. A supply chain crisis management playbook will help companies assess challenges and follow protocols that they’ve developed ahead of time. Many cold chain organizations today are also driving their suppliers to have similar protocols in place. While there’s no perfect playbook for weathering a disaster, having a resilient supply chain that can handle unforeseen disruptions can make all the difference.

1. Assemble a supply chain crisis management team. A crisis management team should have well-developed contingency plans for both natural and man-made disasters. A few times every year, this team should create a few geopolitical, environmental, or natural disaster scenarios and perform drills based on those disruptions, using their crisis management playbook as a guide for how to respond.
2. Enable end-to-end visibility into the supply chain. Ensuring that cold chain products retain their integrity and safety is a challenge that requires increased visibility into an organization’s entire supply chain. With visibility software, companies can obtain location and condition data all from one source in real time. Modern technologies such as IoT, advanced analytics, AI and machine learning are used to create a digital twin of the company’s supply chain, processing millions of events every second to provide diagnostic and predictive insights, including real-time location, condition, utilization and anomaly detection.
3. Monitor inventory levels closely and plan for additional inventory in diverse locations. Because of COVID-19 disruptions, many companies around the world are reporting supply chain disruptions in some capacity due to coronavirus-related transportation restrictions. If an organization has suppliers who could be disrupted due to a natural disaster or an increase in lockdowns due to a surge in COVID-19, it should consider additional inventory in diverse locations.
4. Build a supply chain crisis dashboard. Leverage supply chain visibility software to develop a real-time supply chain crisis dashboard that displays alerts, notifications, metrics, trends, analytics and KPIs. This dashboard should include critical information such as storm trajectories, power outages and port, railroad and airport closures so that organizations can quickly identify which cold chain nodes, products and customers are affected during a disaster.
5. Develop and maintain strong partnerships with supply chain partners. Strong supplier relationships can elevate organizations, especially during a crisis. It’s vital to maintain strong relationships with suppliers and freight forwarders to mitigate the impact of a disasters such as a fire or hurricane. Strong relationships that are established before a crisis can help accelerate coordination during a disaster.

The dynamic nature of today’s world means that future crises will evolve. Given the increasing severity of disasters such as fires and hurricanes, the ability of cold chain companies to increase their agility and resilience in the face of the unknown should be an essential part of cold chain risk management. By monitoring thousands of data sources in real time, including weather feeds, airport delays, power outages and port closures, as well as location-based insights into temperature-sensitive products, organizations can anticipate and minimize the damage of future natural disasters.