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.
Sam I have to ask, do you spread out your electric bill over 12 months or do you take out a second mortgage to pay your bill?
Trust me....it shocks the left to see things like this as it does does to find out that more guns equals less crime and, as the Time Magazine cover revealed..."Men and Women are different".
If FEMA did what I suggested, they wouldn't to buy and inventory material and emergency supplies.
The could just order what was needed from these companies and pay them to deliver the material. There would probably be a good discount if the Salvation Army, Catholic relief charities and local churches handled the distribution to those who are in need.
When I was growing up, we always had more lights up inside than outside. When it gets dark out at 5pm, it sure is nice to come home to a house full of lights!
Private enterprise is ALWAYS the way to go. Once the government gets involved, you can bank on inefficiency and corruption.
You can give credit to WalMart if you can attack the administration in the same sentence. For example, "THey were so slow providing aid and relief that *WALMART* beat them there!!!"
To me, it's worth it!
I will buy some Duck Tape at my local Walmart tomorrow.
Thanks for the tip. We just spent a bundle repainting the exterior of our home and many rooms inside. We have boxes of electric lights and other decorations, and my trophy wife was looking at more the other day.
We, also, use duct tape on the back of picture frames and paintings to keep them from moving around during and after earthquakes, we don't even feel.
Everytime we call the painter back to touch up or to redo damage, he and my wife find something else to paint. His last touchup visit cost me $600 and they have more planned for after the holidays.
"Why should FEMA "hire" organizations that are already doing this work anyway?
Federal funding always has strings attached...
Seems to me we'd be better off if FEMA DOESN'T "hire" them!"
That is all ways a concern re government. I don't know how to get around this aspect. The less the federal and even the state governments are involved (sometimes cities like New Orleans), the better off we are as taxpayers and the end receivers.
"Another key point not said is that WalMart is a business, in business to make money. The US government is in business to spend taxpayers money, nothing else."
Amen! Thanks for this excellent Sunday Sermon.
I was under the impression that FEMA had in-place contracts that they could activate at a moment's notice to get supplies and aid on the way.
Does it hold up well under the elements, or do you use it strictly for indoor decorating?
Where do I find a husband like you?
We're currently residing our house and guess who gets to paint all the doors and windows to contrast with the siding? I'm currently taking a break and the 7yo is contributing her share by working on the front door. I'll do the side door and windows in the morning when the sun is beating on that side of the house.
With the amount of paint I have bought of late, the kitchen alone is 3 different colors, it's a wonder no one has wondered if I've got a thing going with one of the guys in the WalMart paint department :)
Indoors only. For outside, I still resort to the staple gun (on the house).
I used to do a good job on the external paint. I would buy the latest spray gun, a case of making tape and save old fishwraps for weeks. I would pay for my youngest son who loves to paint to fly down and do the really tall parts.
None of us are good at interior paints anymore. My wife used to be until she broke her wrist years ago, and the minor painting strokes needed in interior work just kill her.
Now at 67, my wife and family don't want me up on ladders. So we found this great Mexican American Painter via several happy friends who used him. He did our exterior and some key rooms inside.
My wife went on Social Security at age 65 this year and still works 3 days aweek. Her SS check goes to financing the redoing of things in the house, I could care less about and don't to pull money out of our IRAs to pay for. It works very well.
"The could just order what was needed from these companies and pay them to deliver the material."
Oh, I agree with you (or at least mostly). There are likely to be certain things that places like Wal-Mart, Lowe's, and the like wouldn't have as normal inventory stock. For instance, I could see FEMA having stocks of field tents and such.
LOL!!! I was just funning with you. I don't blame you a bit.
I actually enjoy painting. My husband doesn't mind it, but hates the detail work, like around windows, cutting in corners, and such - and that's the part I love most :)
Because of breaking my ankle this summer I am very leery of getting on a ladder outside, there is no brick or concrete around the house under any of the windows. So he is going to have to help a bit on the windows, because I can't reach the tops of them.
W have just been through Wilma. My opinion is that it is a hugh waste for the government to be trying to set up distribution for free ice and water. Hurricanes don't make everyone indigent. Stores are more convenient and need the business, after they have trashed millions in perishable items.The government does not need to pay for my ice. They need to focus their efforts on those who were wiped out.
The could just order what was needed from these companies and pay them to deliver the material. There would probably be a good discount if the Salvation Army, Catholic relief charities and local churches handled the distribution to those who are in need.
Good thinking. Reduce FEMA's role to that of letting companies like Home Depot and Wal-Mart know what government and donated supplies are coming, and route them to another company if one can't handle any more.
They'd still need the military or Guard to distribute some supplies, though, as they have the equipment to get to places with blocked, damaged or no roads. And the Guard to maintain order, of course; you can't outsource law enforcement.
The National Guard might be a good organization to have store the tents and other large non standard stuff.
Then the governor of the impacted state could order these items to be set up.
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