Are Companies Prepared for a Natural Disaster? By Carla Casas, Alba Castanyer and Sandra Quesada

ARE COMPANIES PREPARED FOR A NATURAL DISASTER?

EMERGENCY LOGISTICS PLANNING IN NATURAL DISASTERS

Climate change is increasing the appearance of extreme weather conditions and businesses are very poorly prepared for natural disasters. Well, it is true that they cannot be planned or we cannot predict that a natural disaster is going to take place in a certain region, but what companies can do is predict this situation. To think about what would happen if a tremendous storm hit into a city and no road transportation can get to the place of business.

In fact, two thirds of employees say their businesses have not reassessed safety and crisis plans since the last time they faced a natural disaster. To exemplify it with figures, in 2014 the US companies lost 50 billion dollars in productivity due to natural disasters. Much of the disruption is from delayed or stopped transportation which plays an important role and it is susceptible to poor weather conditions and natural disasters.

There are some companies that are agile enough to this kind of situations. For example, using a TMS (Transport Management System) to reroute in transit and reschedule alternative modes for inventory on hand. However, most companies aren’t able to play an active role in these situations.

That is why, here there are 4 tips that can help preventing situations like this, and what to do if a natural disaster occurs. To a good disaster risk management plan:

1. Assessment. Assess the probability of having a natural disaster in the area of business you are interested in. Evaluate how badly it would be impacted. Then, determine the level of preparation you should have depending on this likelihood of happening. Finally, you should plan the best alternative transport mode and train employees for this kind of situations.
2. Mitigation. The way you will immediately respond to these events is crucial. Redirecting drivers or pilots out of danger or to a quicker route, canceling shipments headed towards a dangerous region… The goal is to minimize or avoid damage to the supply chain as much as possible.
3. Response. After the disaster happens, how will operations proceed in the short term? You should determine routes, extra service, modes, additional equipment will be needed to stay profitable in the next months after the event.
4. Recovery. The idea in this phase is to move from the short-term plan to normal operations. It is important to determine which services can be back on track, which things can be repaired, how is the company going to deal with the lost goods from customers... All of this should be done in a cost-effective way.