Running head: Preparing for Weather Disruptions in The Supply Chain 1

How Can Supply Chain Managers Prepare?

Rondeeda Magby

Student, Chemeketa Community College

 Preparing for Weather Disruptions in The Supply Chain 2

Powerful storms and severe weather can generate supply chain disruptions. According to

Cullen, J. (2017, July 28), “Extreme weather is not new, but climate change has affected the

severity and frequency.” The increased frequency and severity of extreme weather events has

made predicting these disruptions a moving target and a new priority in managing the supply

chain.

A November 2018 article in Spend Matters, reports that “hurricanes are becoming more

powerful and are lasting longer.” It also reports that the last several years of intense storms

(Harvey, Irma, Maria, Florence, and Michael), are not abnormalities but what appears to be the

new normal. (With High Intensity Hurricanes the New Normal, Procurement Must Plan Ahead

or Suffer the Consequences, 2018).

Weather related challenges can have a direct impact on supply chains causing the

shutdown of airports, railways, and highways. Following the hit of hurricane Harvey, oil refinery

operations were shut down in Texas and gas prices spiked. Roads, bridges, and ports, were

closed, making even a plan B contingency plan ever more difficult to predict. Managers of the

supply chain are forced to find alternative resolutions and sources of material or products, paying

higher prices, or waiting out lengthy delivery times.

How much does weather affect the supply chain? According to AER, Atmospheric and

Environmental Research Center, Thirty percent of the US gross domestic product is directly or

indirectly affected by severe weather conditions. (Retail and Supply Chain, n.d.) Navigating

these severe weather obstacles and understanding the impact of weather on the supply chain can

be a challenge, even to the most experienced supply chain managers. An effort must be made to
 Preparing for Weather Disruptions in The Supply Chain 3

minimize the exposure to this risk by finding an alternate strategy for circumventing around

extreme weather.

What can your business do to protect themselves against the damage and disruption

caused by extreme weather, and how can supply chain managers prepare and plan for extreme

weather challenges?

“Through business continuity planning, organizations can address a range of potential

risks, develop emergency preparedness plans, and help ensure an expedited return to normal

operations.” (Rosario, L., 2018 para 5) Weather conditions cannot be controlled, but plans to

mitigate or circumvent the challenges that severe weather presents can be put in place should the

worst-case scenario occur. Below are some areas of importance to look at to help keep the

supply chain flowing and suggestions for strategic weather demand planning.

 Plot a historic breakdown – Find a correlation of product category with a certain

type of weather.

 Evaluate outcomes – What went right or wrong? How can outcomes be more

positive?

 Generate a demand calculation – Using prior weather events, missed

opportunities, past product demands, will help develop strategies to mitigate

shortages during weather concerns.

 Develop a contingency plan – Know how the business will react and use the

above information to predict weather disruptions and circumvent outages due to

extreme weather.

Additional opportunities to strategize and plan for severe weather conditions exist as

well. Knowing the geographic location of your vendors and if they are in an area prone to severe
 Preparing for Weather Disruptions in The Supply Chain 4

weather such as Florida or Texas may be a cause for concern. Listed below are a few ways to

mitigate some concern.

 Create a response team – A knowledgeable and prepared group of informed

individuals who can activate contingency plans as needed.

 Identify affected areas – Who or what is affected? How is it affected? How often

is it affected?

 Prioritize events – Earthquake, hurricane, flood. What is most likely to occur

based on geographic location?

 Get weather forecasting assistance – Being aware of potential threats of severe

weather and tracking storm progress can assist in planning and preventing

weather related outages. The weather should be a part of supply chain decisions.

 Track current events – Be aware of potential threats at home and abroad,

depending on where you source. A contingency plan for extreme weather threats

can also be modified for other types of threats as well, such as flood, fire,

hurricane and high winds, terrorism, strikes, and more.

 Itemize the disruptions the events cause - Evaluate the sources and their impact.

Run scenarios to brainstorm about how to respond to the imminent threat.

 Supplier diversification – Can you get product from another supplier? Check your

supplier agreements to be sure there is not an exclusive relationship. Does your

supplier have multiple locations to ship from?

 Warehousing – Are there other locations that can warehouse additional product?
 Preparing for Weather Disruptions in The Supply Chain 5

 Communicate with your suppliers – Can shipments be made ahead of the storm?

Can the buyer stock, or hold more inventory to eliminate outages? What

shipments are in route? Can shipments be rerouted through other channels?

 Is there another location? – Can you produce your product at another location not

affected by the severe weather?

 Insurance – An insurer can help identify risks and possibly assist in mitigation

solutions.

 What other opportunities exist? – Brainstorming activities can help develop a list

of other opportunities.

Every business should have a contingency plan. A well-thought contingency plan will

soften the blow of supply disruptions should identify under what conditions the response team

will activate the contingency plan. A contingency plan is defined as pre-defined plan of action

and will be the road map the organization will use to assure that nothing is overlooked and will

assist in an early response. Having a contingency plan will minimize or even eliminate outages

and loss of revenue and will include what steps a business will take when the threat of extreme

weather exists. In addition, a well-thought contingency plan will be tested in order to evaluate

the readiness to respond to the threat.

“Testing is key to effective contingency planning.” MIT’s Sheffi, “Quote” (as cited in

Inbound Logistics, n.d.) “You have to test your plan, run drills, and conduct tabletop exercises as

well as actual exercises.” “You have to exercise the crisis team, so they develop a muscle-like

memory of how to react in the event of a disruption.” MIT’s Sheffi, “Quote” (as cited in Inbound

Logistics, n.d.)
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A well-developed contingency plan will also develop the responders by having them run

the drills and practice different scenarios and how they will respond. Not every situation that

will be faced during the threat can be identified, but practicing scenarios, and then debriefing or

brainstorming can develop new ideas, new threats, or new opportunities, that can be

implemented and will assist in fine tuning the contingency plan. This will also aid in the rate that

the team gets up to speed in the case of a real threat. Just like anything else, a contingency plan

should be kept up to date and relevant.

Another way to help with severe weather threats, or any threats that could disrupt your

business, is to check with your suppliers about what their contingency plans are. Ask your

supplier what they will do in the case of a flood, earthquake, hurricane, or other threat that could

potentially disrupt their business as well as yours. If your contingency plan does not include what

your suppliers contingency plan is, you could still be very adversely affected by the threat.

Communication is going to be the key in any situation. It is of utmost importance to

communicate and let your suppliers know that you are thinking about the “what if’s”, will get

them thinking about it too.

In summary, the possibility of the risk of extreme weather disruptions is higher now more

than ever due to the growing climate change and it can happen at any time having a direct impact

on supply chains. No supply chain is immune from the risks, but a carefully laid-out plan can

prepare an organization in advance in order to avoid a disruption altogether or at the very least,

minimize the risk. Having a contingency plan in place and one that includes everyone in the

supply chain will give your organization an opportunity to react and to mitigate the possibility of

shortages and disruptions.

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References

Cullen, J. (2017, July 28). How to keep your supply chain safe in extreme weather. Retrieved

from https://www.supplychaindigital.com/scm/how-keep-your-supply-chain-safe-

extreme-weather

With High Intensity Hurricanes the New Normal, Procurement Must Plan Ahead or Suffer the

Consequences. (2018, November 19). Retrieved from

http://spendmatters.com/2018/11/20/with-high-intensity-hurricanes-the-new-normal-

procurement-must-plan-ahead-or-suffer-the-consequences/

Retail and Supply Chain. (n.d.). Retrieved from https://www.aer.com/industry/supply-

chain/?_t_id=1B2M2Y8AsgTpgAmY7PhCfg==&_t_q=30% of gross domestic

product&_t_tags=language:en,siteid:a39b67c0-53f9-451b-bc1e-

33858c07e5b4&_t_ip=174.224.16.207&_t_hit.id=Multisite_Core_Models_Pages_Multis

iteContentPage/_0c1c1a70-8b69-4a92-96ff-f4821c74ae1d_en-US&_t_hit.pos=1

L, R. (2018, September 18). Hurricane Season and Its Effects on Global Supply Chain - NRS.

Retrieved from https://nationalretailsystems.com/hurricane-season-effects-global-supply-

chain/

Keenan, W. (n.d.). The Unexpected Happens: Is Your Supply Chain Prepared? Retrieved from

https://www.inboundlogistics.com/cms/article/the-unexpected-happens-is-your-supply-

chain-prepared/