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The Supply Chain Compliance Blog

Snow joke: How to Prepare Your Supply Chain for Bad Weather

Posted by Len Simmons on Mar 13, 2018 3:00:00 PM

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Thick snow, gale-force winds, and flooded roads are all inevitable throughout the year.

And unfortunately, all spell trouble for supply chains across the country.

However, in an effort to save money, it is not uncommon that management can cut costs by reducing supply chain risk management. In turn, this will compromise their supply chains when bad weather strikes.

A recent report by PwC and MIT revealed that companies with mature supply chain and risk management capabilities are not only more resilient to disruptions, but also have a higher EBIT (earnings before interest and taxes) margin than those who don’t make these investments.


Avoiding the domino effect

Smaller, more frequent supply chain disruptions can have a knock-on effect that impacts business revenue. The aforementioned report also reveals that only 44% of the companies with mature processes suffered a 3% or more decline in their revenue compared to 57% with immature processes.

Production issues, delayed transportation, and absent staff can all have an impact that, if you’re not prepared for, can damage your credibility and challenge your resources.

However, having a full understanding of the complexity of your supply chain, as well as simply being aware of the likelihood of bad weather risks, can considerably improve the chances of overcoming these challenges. A company’s ability to adapt to potential risk, including bad weather, is a reflection of its supply chain management sophistication, preparation, and flexibility.

So what should companies bear in mind the next time bad weather threatens to affect their supply chain?


Be proactive, not reactive

Companies that have a detailed plan to respond to potential supply chain disruptions are at a distinct advantage.

Sure, investing the time and resources into something you’ll rarely, if ever, need is difficult. But if you do need it, that plan could be the difference between sinking and swimming.

It’s important to be analytical and flexible to mitigate risk. Ask yourself: What effects could the elements have on the business?

Create alternative routes for transportation, if possible. Plan communications within your organisation, (including your salespeople) about the possibility of the weather influencing your services, to avoid unmet expectations. Test your plans practically with drills and tabletop exercises.

Having a plan at the ready will save you time and manpower to keep your supply chain afloat.

 

Have complete supply chain visibility

In order to create a plan of action, it’s essential that you have full transparency with your supply chain operations in the first place.

In a survey conducted by the Business Continuity Institute (BCI), 69% of organisations claimed  that they don't have full supply chain visibility. This gap in communication between suppliers and clients can lead to complete disaster when a disruption, such as bad weather, strikes.

As well as this, 22% claim that they do not analyse the source of disruption and are, therefore, unable to learn from it and prepare for next time.

Altius’ supply chain performance framework emphasises the importance of monitoring, capability, and management working in synchronicity to encourage full visibility of your supply chain, and ensure it is both reliable and performance-driven at all times.

Take a look at our best practice guide to find out how the framework is put into practice.


Utilise the right technology

In order to ensure a secure, safeguarded and transparent supply chain no matter what Mother Nature throws at you - selecting the right software is key.  

In the aforementioned BCI report, 63% of organisations did not use any technology to analyse, track or monitor the performance of their supply chains, with a full 41% still reliant on spreadsheets to keep track of supply chain disruptions.

Having a more robust, all in one platform for all of your supply chain needs is essential to respond quickly to potential disruptions.

Software such as Exigo will also give a real-time view of your supplier’s status, so you can see at a glance where the potential risks are. Exigo also has automated features that removes irritating manual processes when all hands are needed on deck.

A better grasp of technology within your supply chain means you’ll be more aware of potential problems before they happen, so you can deal with them efficiently.



Understanding vulnerabilities

In the UK, we are lucky enough that natural disasters aren’t a common enough occurrence to cause billions of pounds worth of damage to supply chains.

However, the next time bad weather has the potential to cause disruption, it’s important that you are aware of your supply chain vulnerabilities, capabilities, and transparency to mitigate risk and weather the storm.

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