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Is Your Supply Chain at Risk From Hurricane Sandy?

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There is never a good time to have a weak link in your supply chain, but when a link breaks, the outcome can be disastrous.  Watching the after effects of Hurricane Sandy have been heartbreaking for the families affected by that natural disaster.  The economic effects are still being vetted out and it is already very clear that they aren’t going to be good.  According to “A Storm-Battered Supply Chain Threatens Holiday Shopping,” by Stephanie Clifford and Nelson D. Schwartz posted in the New York Times , “The economic effects of Hurricane Sandy are reverberating beyond areas hit by the storm as businesses warn customers of delays, try to get merchandise out of closed ports and face canceled orders.”

Timing could not be worse for the businesses in this area or those that rely on these businesses.  Just as stores should be stocking the shelves in anticipation of the holiday shopping season, lack of power, closed roads, and destroyed facilities have brought this supply chain and this regional marketplace to a screeching halt.  Products have been destroyed in the storm and the products that were unaffected are stuck in warehouses because trucks can’t get them out.  This region is responsible for nearly 20% of the gross domestic product, according to Gregory Daco, a senior economist with IHS Global Insight.  Delays in shipments and product losses are going to be felt for months to come.

Although you may not have been affected by the hurricane directly, if you are waiting for raw materials or products from businesses this area, you may be waiting a long time.  If your items weren’t destroyed, you could still find yourself between a rock and a hard place.  Businesses who have paid fully or partially for items in this area will be forced to accept that loss and re-order products from a business outside of the hurricane-devastated area.  Reordering new products will still cause customer delivery dates to be missed, plus there will be additional costs from elevated shipment fees from having to order a rush delivery.  And, all at the worst time of year – gearing up for holiday shopping.

Whether or not you have been affected by this supply chain and economic disaster, it is a good time to prepare or review your own disaster plan.  Investigate your own supply chain and evaluate potential scenarios should a natural disaster or other business interruption cause you delays in getting the products you need for your customers.  Knowing your supply chain well, having control over inventory, and knowing how to handle minor and major interruptions in your supply chain could mean the difference between a successful or failed quarter, or worse yet, holiday shopping season.  Contact RockySoft for more information about strengthening your supply chain and how to prepare yourself for a business interruption as significant as what is being felt from Hurricane Sandy.

 

By Jeffrey Porter with RockySoft, Microsoft Dynamics software provider for demand planning

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