Andel and Handling: Prepare to be a Master of Disaster

Safety and security can't be guaranteed, but solid planning could be your supply chain's saving grace.

As I write this, the U.S. East Coast is preparing for "Frankenstorm," otherwise known as Sandy. This perfect storm is expected to combine hurricane force winds and rain from the Atlantic with a winter storm system from the west, frigid air from Canada, and full-moon-accentuated high tides.

Meanwhile, on the West Coast, counterterrorism forces are getting geared up for the "Zombie Apocalypse," a Halloween-timed summit that uses the zombie theme to represent a variety of terrorist organizations to test the capabilities of Marines, Navy, special forces, police and fire personnel in dealing with them.

Aren't we living in scary-enough times that we shouldn't need Hollywood-style seasoning from journalists and government agencies to spice them up? Well, judging by the readiness of most companies to deal with disaster, maybe they do need a turbo-charged wake-up call.

PwC recently surveyed more than 1,100 retail and consumer executives about the security of their "business ecosystems."  Sixty-nine percent of respondents said they are confident their company's security activities are effective. That's significantly down from the last time this population was polled in 2008, when 83 percent of respondents expressed confidence in their security programs. Only 40 percent expect security budgets to increase in the year ahead. And while 72 percent of respondents say their business has an information security strategy in place, and 47 percent have implemented a business continuity/disaster recovery plan this year, only 31 percent of respondents say their organization plans to implement an enterprise social networking program for employee communication and collaboration. And only a quarter of respondents already have one. That means a little over half are thinking in terms of inter-organizational collaboration.

November Issue of MH&L

That's why MH&L is devoting its entire November issue to various aspects of security and safety. But it's not enough for organizations to be prepared for disaster. They're in business, and businesses are built on supply chain relationships. With that in mind, we asked Shekar Natarajan, our newest editorial advisory board member, to update you on his work to ensure a supply chain ecosystem approach to disasters. His project is being funded through the Regional Catastrophic Preparedness Grant Program (RCPGP) administered by the Federal Emergency Management Agency (FEMA). Why is a supply chain approach to safety and security important?

"Preparing for disasters requires more than just an internal look," Natarajan says. "You have to think and work three levels down. You cannot deliver if your warehouse doesn't have power or transportation, which may be impacted by demand from other unrelated partners in the supply chain."

As you'll read in his report, the ecosystem approach uses a comprehensive technique to assess every link in a supply chain—identifying overall chain capacity and assessing necessary plans.  This means thinking in terms of Plan A, Plan B, Plan C and Plan D for different degrees of uncertainty/risk. Natarajan recommends that you practice taking out each part of your ecosystem plan and assessing how your supply chain would respond.

But while you're thinking ecosystems, think of the people in them—not only within your organization but in those of your business partners. Human behavior can't be planned, and you know what happens with even the best laid plans.

"Leaders must understand that the people involved have emotions and need different responses," he adds. "Never maximize your own benefits at the expense of partners. Your success is a multiplicative factor of the success of partners in the chain."

The reason Natarajan's team got the White House's attention for its approach to disaster planning is due in part to Japan's tsunami catastrophe a couple years ago.  Phil Palin, the White House advisor to this initiative, admitted he would never have asked the participants in the Regional Catastrophic Preparedness project to engage in the sort of disciplined process Natarajan recommended. "The fact you made the recommendation, spontaneously and in context, transformed our potential and caused the enthusiastic consensus that emerged," Palin told him.

The next step for Natarajan's team is to do table-top exercises at Johns Hopkins University with the key participants—public and private sector. Stakeholders include security, communication, banking, water, food, pharmaceuticals (McKesson), the Maryland Trauma Center, and power. 

I hope they finish before the Zombies get to Washington.

Oh, that's right. Too late.

Follow me on Twitter @TomAndel.

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