Disaster Management Allows Companies to Get Ahead of the Game

Companies that are most frequently exposed to supply-chain disruption are the ones that have the best risk management plans, according to a recent http://news.wustl.edu article by Neil Schoenherr. And according to supply chain expert Panos Kouvelis, Ph.D., there is a lot for companies to learn about disaster preparedness and risk management, especially in the wake of the recent devastating tornados across the U.S.

Kouvelis, who is the Emerson Distinguished Professor of Operations and Manufacturing Management and director of the Olin Business School, Washington University’s Boeing Center for Technology, Information, and Manufacturing, several companies should be used as role models when it comes to disaster preparedness:

  • Lowe’s Companies Inc.
  • The Home Depot Inc.
  • Walmart Stores Inc.
  • Waffle House Inc.

Home Depot works with employees and the American Red Cross to educate communities on disaster preparedness. Waffle House Restaurants follow a detailed Disaster Supply Chain
Management plan from pre-disaster to post-disaster. And Walmart prioritizes emergency response for all types of disaster scenarios and effectively communicates their plan.

“These companies have many stores in the Southern part of the United States that are frequently exposed to hurricanes,” Kouvelis said in Schoenherr’s Washington University in St. Louis article. “They have good risk management plans in place and are great examples of how their supply chains get affected in two different ways. On the one hand, your own supply chain is exposed. At the same time, your stores are supposed to be the first to react and provide the basic supplies. Your supply goes down, while your demand goes up.”

Kouvelis teaches risk management and supply chain management to top executives from around the country, and the earthquake and tsunami in Japan this past March has given Kouvelis many “lessons learned” case studies to talk about in relation to supply chain management.

“The Japanese car companies, even though most of their assembly factories are to the south of Japan, and of course have much capacity outside of Japan, definitely were affected by the earthquake,” Kouvelis said in the interview. “They brought their production levels down to 70%. Now we are hearing they are ready to bring it up to 90 percent and hopefully by July they will be close to full capacity.”

According to Kouvelis, disaster and risk management in global supply chains can actually be a competitive advantage. “You have to think of it as an opportunity to get ahead of the game by being better prepared.”

For more information about disaster management, visit: http://news.wustl.edu/news/Pages/22471.aspx