Hurricane Katrina Offers Lessons for Distribution Network Planning

Political pundits may differ over the government’s handling of recovery efforts after Hurricane Katrina, but there’s no controversy about the lessons that supply chain planners can learn from the disaster. The following are some critical pointers that Forrester Research Inc. has put together:

Understand the importance of site selection. Choosing an appropriate site is the most reliable way to prevent or at least diminish the impact of natural disasters. Unfortunately, in a major port such as New Orleans, locating warehouses or DCs in high-risk areas is unavoidable, but if at all possible, position operations in the safest areas possible.

Assess local risks. Evaluate the potential for both man-made and natural disasters on a site-by-site basis. One-size-fits-all recovery strategies are not effective.

Don’t depend on terrestrial (line-of-sight) wireless. Communications plans that rely on mobile telephony are prone to failure because of physical damage to the infrastructure and overload during emergencies. It’s worth splurging on satellite phones for operations managers at key sites so they can coordinate disaster response even during a massive communications breakdown.

Examine the extent of your dependence on public infrastructure. Understand what regional public agencies can and cannot do in the event of a disaster, and make your contingency plans accordingly.

Acknowledge the risks of physical distribution channels. All it takes is one powerful storm to cripple ports or pipelines for months. It is vital to identify alternative routing options and transport providers and draw up contingency contracts that enable these resources to be deployed with a single phone call or e-mail message.

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