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Planning for a Hurricane: How your Supply Chain can Survive Natural Disasters

Hurricane Season happens every year all around the world at varying degrees. The 2017 season alone had 17 named storms, 6 of which were major (Category 3 or stronger) hurricanes. Of these, the U.N. World Meteorological Organization (WMO) has retired four of their names including Harvey (Texas), Irma (Florida), Maria (Puerto Rico), and Nate (Caribbean).

We all know the damage that hurricanes can impose on both infrastructure and nature, but we also need to think a step further to how that physical damage will cause problems in the supply chain. Road closures create a problem on the logistics side, warehouse damage could mean weeks or months without the inventory, manufacturing plant damage could mean weeks or months without production, and damaged products mean starting from square one.

The best way to plan around a disaster such as a hurricane is with an optimization solution like GAINS®. The software uses Network Flow Optimization to identify alternative vendors in anticipation of an event or in response to an event. Planners can adjust the lead times of the affected locations and let the system re-select which vendor(s) to choose, or they can shift capacity of a location to zero, which would force behavior to move around the constraint.

Additionally, GAINS monitors (perhaps continuously) for disruption. Order profiles will change as demand “disappears” in areas affected by the storm (during the storm), then demand is going to spike after the storm as things return to normal. GAINS monitors the condition of orders; purchase, transfer and demand/sales. When it detects a significant deviation it re-optimizes the supply chain to insure supply and demand are balanced and that all appropriate activities are undertaken to minimize disruption. A specialty of GAINS is to do all of this in the most cost-optimal fashion, while simultaneously keeping service levels in the expected range.

Recommended Reading from Supply Chain Dive

Crisis of the Year: Hurricanes  offsite link

With eyes on the Atlantic, grocers brace for Hurricane Florence  offsite link