Posted on 11/13/2005 8:05:37 AM PST by John Jorsett
The hurricanes that flattened the Gulf Coast in August and September tested corporate logistics and supply chain operations, as companies struggled to move relief supplies and inventory to and from the region before and after each storm. One lesson from these storms is that having procedures for communicating quickly about what needs to be done is as essential for companies as having integrated inventory and logistics systems.
"Resilient companies communicate obsessively," says Yossi Sheffi, director of the MIT Center for Transportation and Logistics.
Wal-Mart, for example, was able to move food, water, generators and other goods to areas hit by hurricanes Katrina and Rita following each storm because it has an emergency operations center that is staffed every day around the clock by decision-makers who have access to all of the company's systems.
Under normal circumstances, a six- to 10-person staff at the center responds to everyday emergencies, such as a fire in a store or a shooting outside one. When disasters such as hurricanes threaten, the staff is joined by senior representatives from each of the company's functional areas, says Jason Jackson, Wal-Mart's director of business continuity. The center is equipped with hurricane-tracking software, and on Aug. 24, days before Katrina made landfall, company managers were already planning their response.
The emergency response team works in a large, open room that is designed with efficient communication in mind. When a district manager calls from the field to tell the operations manager in the center that he needs 10 trucks of water, the operations manager can turn to the person manning the replenishment systems.
The replenishment manager then checks his supplies. "He says, 'I can get you eight [trucks] today and two tomorrow,'" says Jackson. "He then tells the logistics guy. This all takes place in a matter of seconds."
As a result, Wal-Mart trucks were distributing aid to Katrina's victims days before federal relief arrived. During a less destructive hurricane, Wal-Mart ships between 200 and 400 containers of goods for sale or relief. In the first two and a half weeks following Katrina, Wal-Mart shipped 2,500 containers to the region and delivered another 517 containers post-Rita. Wal-Mart also set up satellite links for its stores that lost phone or Internet service so that they could stay connected to headquarters; Wal-Mart stores in areas that were without power for weeks were able to keep generators in stock.
Starbucks was also able to get aid to hurricane-ravaged areas quickly. When the company got a request from the American Red Cross to donate coffee, managers at headquarters contacted the company's distributors to discuss how they could help. Starbucks determined that it could donate 30,000 pounds of coffee, 235,000 bottles of water and 44,000 pastries without affecting supplies to its retail stores. Efficient communication also helped many companies avoid losing goods in the storm. MIT's Sheffi notes that GM was able to contact its dealers in New Orleans about moving their inventory out of the city and then sent car carriers to pick up the vehicles.
Sheffi says the long-term implications of this year's hurricanes will be that companies will now pay more attention to building redundancy and flexibility into their logistics operations. Companies that can communicate quickly are well positioned to weather any storm.
We were on the same wave length re the national guard. See my reply right below yours.
Our posturing, preening, power-hungry politicians excel at all of the above. Where they fail is that they care about no one but themselves.
Carolyn
Good point. I have two coworkers who are originally from New Orleans. They both had several relatives living with them after Katrina (one coworker's family lived in Algiers, and might have moved back by now). It never occurred to them to ask FEMA for a free hotel room -- why would it? They have a place to stay and resources to take care of themselves and their own.
There is a legitimate role for FEMA in distributing free food and ice, but it should be limited to -- or, at least, first directed to -- places and people in serious need. Folks who can pay for their ice, who have money and anticipate checks from their insurance companies to cover their losses and expenses, should be allowed to buy ice rather than stand in line to get it for free.
And how many MOM and POP price gougers did they put out of business by rushing in CHEAP or free merchandise? EVIL WM! BAD! BAD!
;) sarcasm off.
There's got to be a way to switch the incentive pattern...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.