Condensed from online reports
Extreme weather, be it in the form of winter storms, spring tornadoes or summer hurricanes, can bring significant disruption to supply chains, resulting in tangible losses on the bottom line. reports that weather- and climate-related disasters have caused $2.4 trillion in economic losses and nearly 2 million deaths globally since 1971 according to the World Meteorological Organization. NBC News has reported that the 2014 winter storms cost U.S. businesses more than $15 billion.
Such numbers should send a signal to organizations that they should have seasonal extreme-weather contingency plans that ensure business continuity through transportation-choking weather.
How can companies prepare for what really is the unpredictable? The first step is recognizing that although unpredictable with any precision to day or week, seasonal extreme weather is a likelihood that should be prepared for: Snow covers the North and Northeast most winters; hurricanes hit the East Coast each summer; tornadoes hit the Midwest in the spring, and extreme rains have caused flooding in various parts of the U.S. in almost every season. recently published a few considerations for strengthening supply chains against extreme weather impacts:Use diverse suppliers and production locations to more adequately protect the supply chain;Work collaboratively with suppliers to develop a resilient supply chain that can withstand the event of extreme weather;Create or update disaster recovery plans. Consider changes in secondary or back-up locations and operations, mitigation strategies, logistic alternatives, tested employee safety and evacuation plans, critical contracts and other significant impacts to the business’s risk profile;Assess whether accounting systems can adequately capture information to quantify and document losses, including lost orders, cancellations, decline in demand, extra expenses, property remediation and property repair;Assess whether employees have been adequately trained to capture relevant loss data and documentation;Review insurance policies for appropriate values and coverage, including: deductibles and self-retentions, coverages such as flood, contingent business interruption, extended period of indemnity, civil authority, ingress/egress, ordinary payroll, power outages and claim preparation fees; andBack-up records and other critical information.
Preparing for the unpredictable is never easy. By implementing these baseline measures, a company can minimize its supply chain’s exposure to any weather event or natural disaster, which will help it keep calm before, during and after the storm.

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