We already wrote about Sandy and its impact on operations immediately after the storm here. Several stories began to emerge on how firms managed to handle the storm. Recently, the NY Times had an article on how Eileen Fisher managed the pre-storm preparation and the recovery (“Retailer Shakes Off the Storm“).
Recovery was both an urgent and a daunting task. A broad insurance policy helped a lot. So did some planning and a good amount of luck. As did an almost out-of-body detachment on executives’ parts to see past the emotion of sewage-soaked shirts and stained rolls of fabric to the prize of reopening a ravaged business.
When we talk about Disruption Risk Management, we discuss the three levels that need to be managed well: strategic, tactical and execution. The strategic level requires creating a resilient operations network (internal and external) and instituting effective risk-management process. The tactical level requires identifying and mitigating vulnerabilities in the current operations network, including threat identification and outlining an action plans. The execution level includes monitoring evolving risks and activating pre-planned contingencies. The article provides an excellent example of the interplay between the tactical level and the execution one.
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Sandy is going to affect holiday shopping… I know, you probably say that with many people without houses this is a very minor issues, but not if you livelihood depends on sales you are making during the holidays season.
When a hurricane hits, of course, there is the usual shutting down of shipping terminal and submerged warehouses. Due to the extreme nature of the storm, we saw deliveries being disrupted due to downed power lines, closed roads and scarce gasoline. All of these cause delays that affect every business, but the NY Times article “A Storm-Battered Supply Chain Threatens Holiday Shopping“ brings an interesting angle on the effect of these disruptions on small business, and especially due to the proximity to the holiday season. The article tells the story of Robert Van Sickle
His pet supply company, Polka Dog Bakery, was relying on a shipment of cardboard tubes from China with a merry design, intended to hold popular holiday dog treats. The products represent about 15 percent of sales at the company. But the New York Container Terminal in Staten Island, where the tubes arrived shortly before the storm, was devastated, and Mr. Van Sickle’s freight forwarder has been unable to track down the containers. It is too late to reorder the tubes from China in time for the holidays, and Mr. Van Sickle has tens of thousands of baked dog treats piled up at his Boston headquarters.
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