Thursday, April 5, 2012

Hold Your Partners Accountable

As we put the finishing touches on the 2011/2012 ICM Annual Crisis Report there are some lessons from last year that businesses around the world cannot afford to ignore.

Natural disasters, cyber crime and supply chain disruptions top the list and the first two are significant contributors to the latter.

In December 2004 a massive earthquake in the Indian Ocean triggered a tsunami that killed an estimated 230,000 people.  It also impacted the supply chain of a number of U.S. businesses.  I was flying home from the west coast and my seatmate was obviously distressed.  She was on her way to her corporate headquarters in the middle of America to tell her CEO that an entire season of hunting and sportswear had been washed out to sea and it would take at least half-a-year for their suppliers to make and ship replacement product for their chain of big-name stores.

2011 drove home the danger of today's supply chains. More and more companies in one part of the world -- the U.S. for example -- depend on parts or finished products supplied from the far reaches of the globe.  Even if the supplier is a state or two away, there are still so many things that can prevent timely delivery.

Today's business leaders MUST anticipate all the things that can go wrong and disrupt their supply chains.  No longer is it enough to acknowledge that there could be a disruption.  The old idea that
it won't happen to us and if it does there is nothing we can do about it anyway, just isn't good enough.

Someone in every organization has to anticipate the possible loss of critical parts or goods and develop a solution, just in case.

Not just manufacturers or retailers -- but what about health care providers.  Hospitals ran out of critical medications in 2011, because pharmaceutical companies could not meet the need. 

What if you run a small neighborhood restaurant.  What would happen if your supplier could not deliver the steaks or salad ingredients that your customers have come to expect from you?  How long could you survive if your prime source of food or supplies or car parts, or medicines were not going to be available for months?

Crisis planning is not something you should do, it is a MUST do for any and every organization.

The new ICM Annual Crisis Report should be available later in April.

No comments:

Post a Comment