Modernizing Information Along the Supply Chain for Natural Disaster Response
When Hurricane Maria threatened Puerto Rico, it was already a Category 5 storm. Baxter International, which manufactures saline solution bags in the commonwealth, took a major hit in production. The slowdown crippled the flow of these essential medical supplies to Baxter's primary hospital consumers in the continental United States. Despite dire forecasts about the hurricane, the medical industry could not react fast enough, resulting in a major shortage of saline bags.
Such a supply chain disaster could have been mitigated with a combination of tools and approaches: real-time updates from local sources on the ground, a crisis communications plan to convey timely and accurate information to key stakeholders, and a response team to tap into alternate reserves. The latter two are very much dependent on the speed and quality of information gained from the first.
Cloudy with a Chance of Disruption
The supply chain is a complicated juggernaut—even in the best of times. The speed of today’s commerce necessitates strength in each link. Companies simply can’t afford a disruption in carefully choreographed production-distribution cycles.
Unfortunately, fragmented visibility plagues company processes; a worrying 84% of the chief supply chain officers surveyed in an IBM study cited this as their biggest challenge. Such a lack of transparency means that not everyone in a company can tell if the widgets they’re banking on are following well-timed schedules.
The problem is compounded when natural disasters occur, such as Hurricane Maria, because these massive disruptions can throw well-planned protocols off course. Escalating climate change has lead to an increase in the frequency and intensity of hurricanes; a potent hurricane means wider and longer-lasting repercussions. Companies are increasingly factoring in such weather events in supply chain risk management.
Weathering the Chaos
To sustain operations during natural disasters, companies need to access relevant information and make quick decisions as the event unfolds. The same IBM study found that 87% of chief supply chain officers reported extreme difficulty in predicting and managing disruptions, and only 36% had the means to gauge and manage disruptions.
Those numbers might be shifting. To aid in supply chain management efforts, more professionals are relying on real-time alerts from a diversifying pool of publicly available information, such as social media, blogs, and weather sensors. While this is a good first step, simply being alerted about events on the ground in the wake of hurricanes is not enough. These warnings cry wolf too often, leading companies to react to every blip, whether it’s warranted or not.
Every natural disaster has its own way of affecting supply chains, so real-time information can lend crucial awareness to unfolding crises. In addition, artificial intelligence (AI) applied to publicly available datasets helps bring the most relevant information to light with speed and scale.
AI Accelerates Crisis Response
When seconds matter, supply chain professionals need vital information about where to place their most critical resources. Real-time information alerts, powered by AI, can offer a strategic advantage in the face of weather-related emergencies. It is challenging for any team to monitor social media, weather data, and other public information sources while putting a crisis plan in motion simultaneously. AI takes care of some of this challenging work by sifting through early indicators and delivering customized alerts based on geographic relevancy and other areas of interest. Professionals can then focus on updating their internal plans with new inputs and mobilizing backup strategies faster and more effectively.
What does this all look like in action? In January 2017, a series of tornadoes wreaked havoc along the Southeastern U.S. coastline. But a first alert response system delivered real-time information about the extent of damage and where help was needed the most. Such time-sensitive data led to better timed responses and care.
Given the ongoing severity and frequency of hurricanes and other severe weather events, preparation for response is becoming an essential pillar of supply chain risk management. Real-time alerts powered by AI allow businesses to dissolve silos and respond efficiently and quickly to disasters. And while no company can prevent hurricanes, they can rely on tools that help them curb extreme weather effects on supply chains.