How to Make Your Supply Chain Resilient

Sheila Reilly, Partner Executive, DisasterAWARE Enterprise

man in black jacket standing in front of red and blue intermodal containersManufacturing companies rely heavily on their supply chain to produce and distribute products to customers. However, natural catastrophes such as floods, wildfires, hurricanes, earthquakes, landslides, etc. can disrupt the supply chain and cause significant damage to a company’s operations and bottom line. What are the top 3 contributors to this supply chain exposure? Read on for my thoughts.

Lack of Visibility into Supply Chain Risk

One of the biggest challenges for manufacturing companies is having a clear understanding of the natural catastrophe risks and manmade threats that their suppliers and logistics providers may face. This is actually a 2-part problem: 

  1. Knowing all of the Tier 1 suppliers (most companies have a good grasp on this) as well as knowing the Tier 2 suppliers (many companies struggle with this).
  2. Understanding what hazards threaten ALL Tier suppliers globally.

Without visibility into the potential risks, a company may be unaware of the impact that a natural disaster could have on its supply chain until the threat is already underway. This lack of visibility often leads to unexpected disruptions and delays, which then cause major disruptions to operations and subsequent financial losses.

For example, after incurring financial losses associated with floods in Asia, one large global manufacturing company’s Procurement & Sourcing Department created an internal reference that reflects the relationships among their Tier 1 and Tier 2 suppliers. Documenting their supplier taxonomy has enabled them to visualize their assets holistically while monitoring threats to those assets. Likewise, they have moved from a manual, labor-intensive global threat review to an automated system that proactively alerts them BEFORE their assets are in harm’s way. The benefits have been:

  • The manufacturer is ‘in the know’ and no longer awaits their supplier to advise of a disruption (suppliers don’t want their manufacturing customers to seek alternative sources for obvious reasons). The manufacturer contacts the supplier to inquire what supplier is doing regarding the given threat.
  • Activate ‘backup’ Tier 1 suppliers with visibility of associated Tier 2 supplier risk.
  • Advise affected manufacturer stakeholders of the situation and what Procurement & Sourcing is doing to ensure operational resilience with no/minimal negative impact on the company. This informed communication/collaboration has been hugely valuable to the company.

Limited Ability to Mitigate Risks

Another problem that manufacturing companies may face is a limited ability to mitigate natural catastrophes and manmade risks worldwide. Even if a company has visibility into the risks, they may not have the resources or capabilities to take action to mitigate those risks. This can include things like building resilience into their supply chain, diversifying their supplier base, or developing contingency plans. Without the ability to mitigate risks, a company may be left exposed to significant financial losses in the event of a natural catastrophe. 

Of course, having effective tooling assists in getting advanced optics on threats to the supply chain so that the manufacturer can take mitigative action to minimize impact. In addition, when vetting a new supplier, it’s advisable to use historical threat intelligence globally to:

  • Understand all natural catastrophe risks before signing an agreement with the new supplier.
  • Be a more informed buyer, using historical threat intelligence to negotiate the contract with the new supplier.
  • Fully consider a given geography regarding logistics associated with supply lines (marine, rail, road, ports); what are the potential risks on the movement of supplier’s products to the recipient (e.g. the manufacturer or their Tier 1 supplier).

One of my clients used historical data to his advantage, selected a ‘less risky’ geography for one of his Tier 1 suppliers, and stipulated specific conditions in another new supplier’s agreement. Smart.

Inadequate Insurance Coverage

Finally, many manufacturing companies may be inadequately insured against natural catastrophe risks. Many traditional insurance policies do not cover supply chain risks, and even if a company does have insurance, it may not be enough to fully cover the costs of a natural disaster. This can leave a company exposed to significant financial losses, even if they have taken steps to mitigate risks and minimize disruptions. 
Certainly, it behooves the manufacturer to ‘shop around’ and ensure the best possible coverage. Over the last twenty years, we’ve seen parametric insurance introduced and adopted by the market as one of many financial risk tools used. Given climate change and subsequent more severe, more frequent natural disasters, some insurance companies are offering creative and cost-effective solutions. I expect the insurance industry will continue to evolve in response to the ongoing global climate risk.

What is Operational Resilience and Why is it Important?

We’ve talked a lot about Operational resilience, a big topic for companies today. Enterprises are undoubtedly facing mounting pressure from shareholders, employees, government regulators, and others to build more resilience and produce predictable business outcomes. That’s not a surprise because of the frequent and complex challenges we have faced over the past few years. Organizations, big and small, are starting to realize it’s not enough to just respond to and survive catastrophic events. Businesses need to adopt risk and impact intelligence to monitor and recognize potential threats and disruptive events before they happen and prepare themselves ahead of time and ahead of their competitors to protect their assets, people, and productivity.

What is Operational Resilience?

Operational ResilienceSimply put, operational resilience is an organization’s ability to “resist, absorb, and recover from, or adapt to an adverse occurrence” (U.S. Department of Commerce) that could negatively impact its ability to perform its operational functions. More specifically, operational resilience is a level of business preparedness and operational readiness that enables your organization to preempt and avoid the most significant implications of potential disruptions.

Operational resilience is a whole organization undertaking. It
is built from careful examination of business processes and practices across the organization to identify vulnerabilities and then creating new ways of doing things that are more resistant to disruption from external events. Each functional area is important, including finance, operations, procurement, etc. To do this managers need to find ways to identify potential disruptions before they occur and have predefined contingency plans ready and their staff trained to implement them when needed.

How to Achieve Operational Resilience

Over the next few blog posts, we’ll cover different hazard types and how to prepare your company’s employees and assets to ensure their safety and keep our business resilient and running when disaster strikes. In the meantime, to learn more about operational resilience and why it’s essential to adopt a risk and impact intelligence solution for your business, check out our white paper on the subject. This white paper will aid you and your business to better equip yourselves for what you may need to do to improve your organization’s operational resilience, understand the role risk and impact intelligence plays in building operational resilience, and how to evaluate potential solutions.

You can also try out the only risk and impact intelligence solution that offers near-real-time data, risk and impact analysis powered by our Resilience Engine, and the accuracy of over 350 trusted data sources by signing up for a 14-Day Trial.

Download the White Paper

Top 3 Mistakes to Avoid When Establishing a GSOC

Sheila Reilly, Partner Executive, DisasterAWARE Enterprise

our solutions 2It’s a new year with a fresh budget, and many Corporate Security teams now have money to build out a real GSOC, a fascinating project, to be sure!

Several months ago, a member of a Global Security Council to which I belong emailed our 1000+ members a simple request to solicit key learnings when establishing a GSOC. Considerations such as GSOC-as-a-Service v. In-house; where to locate the GSOC (HQ or distributed globally); how to staff the GSOC (FTEs or contractors or both); and which group budget(s) to fund this security service were just a few of the many topics on the table. The response was a wonderful collection of real-world experience and perspective across large and mid-size organizations.

Having been in the global security risk intelligence business for many years, I thought it might be helpful to highlight the Top 3 Mistakes to Avoid When Establishing a GSOC:

Establishing a GSOC before aligning its mission across the lines of your business.

Only set up your GSOC after aligning its mission across the lines of business (e.g., physical security, asset protection, critical communications, HSE, supply chain, etc.). Each organizational structure will be different, but the key here is to bring all the stakeholders together to communicate and capture feedback on your GSOC project. This step is foundational to a successful and sustainable GSOC. By removing silos, your team will:

    1. Uncover broader use cases than you originally envisioned which will drive business case/ROI metrics.
    2. Expose other groups’ current tooling and SOPs that may be useful in the GSOC and may identify necessary integrations.
    3. More effectively establish critical communication channels and desired deliverables (e.g., reports, etc.) with all stakeholders.

Don’t assume the associated cost.

Don’t assume that the associated cost of the GSOC should be absorbed by only one (your) group. Looking at many companies I work with, I see GSOC as a cost center, GSOC as a profit center, and GSOC as a hybrid cost/profit center.  When 1. above is completed, the output will be a quantifiable budget roadmap with associated KPIs. Moreover, this value analysis should be ongoing and reported to the stakeholders regularly (e.g., weekly, bi-monthly, monthly).

For example, because the GSOC—using proactive risk tooling and adhering to company SOPs— alerted the organization of a Flood Hazard to a given company warehouse, the company was able to alert employees to work from home (Duty of Care KPI) and divert incoming product to the next nearest warehouse (supply chain KPI). Duty of Care is a compliance item, while uninterrupted product shipments are a sales/revenue item. Both are quantifiable and drive the ROI of the GSOC.

Don’t just hire to “fill the seats.”

Don’t haphazardly hire your GSOC team just to ‘fill the seats.’ The analysts and management team you put in place should:

    1. think globally and strategically; have a critical mindset to problem-solving and be encouraged to exercise latitude while adhering to SOPs when handling a crucial event 
    2. thrive in a dynamic environment as often threats/events unfold rapidly and require rapid response
    3. see a clear career path and continued growth with your company: from analyst to senior analyst to manager, etc.

When a GSOC is adequately staffed, its value is realized immediately, and the dreaded ‘revolving door’ becomes a thing of the past. BTW, this approach is applicable whether you are staffing with internal FTEs or using security contractor services.

Here’s to a wonderful and safe year ahead!

Thank You for a Record Year!

2022 was a record year for us, and everyone at DisasterAWARE Enterprise wants to thank you for helping us achieve a great 2022. Without our customers, partners, and friends, we would not be where we are today. We wanted to take a moment to reflect on the past year and check out a few highlights from 2022!

Pacific Disaster Center and DisasterAWARE Receive Prestigious UN Award

On May 25, 2022, our partner and sister company, the Pacific Disaster Center, was awarded the first prize of the United Nations Sasakawa Award for Disaster Risk Reduction during the Global Platform for Disaster Risk Reduction (GPDRR) in Bali, Indonesia, a reward given every three years to individuals or organizations “that have made substantive impact in reducing disaster risk.”

You can learn more about the PDC’s work and the award here.

DisasterAWARE Enterprise returns to GSX 2022 in Atlanta!

It was wonderful to be back at GSX after a 2-year COVID hiatus! The Georgia World Congress Center was bustling during the week of September 11th, and we connected with hundreds of our customers and partners at our booth and in the many receptions held in the area. There were many exciting meetings around all things security, and two topics seemed to be top of mind with many of the folks we met with: 

1) Climate change is causing significant security threats for large and small companies as natural catastrophes are more frequent and severe than ever.
2) To drive better ROI, organizations are looking at ways to inventory and consolidate their security tooling and associated SOPs. 

Here at DisasterAWARE Enterprise, we’ve been delivering proactive modeled risk intelligence in near real-time, driving the best possible business outcomes for the security sector. We’re already looking forward to GSX 2023 in Dallas.

Enhanced global automated flood and landslide detection

In April, we announced our partnership with NASA’s Jet Propulsion Laboratory and Goddard Space Flight Center,  providing DAE customers with more accurate and automated flood and landslide hazards. We hope you noticed the more significant number of flood hazards and the faster speed at which they have been updated in DAE since its implementation. Check out more details on this partnership here!

Enhanced Reports are here! 

See the impact on your locations! With our convenient and customized reports, understand the specific impact of a hazard on your assets with key metrics, projected path, and customized branding in our enhanced reports, introduced earlier this year! Check out the details here!

DisasterAWARE Enterprise adds the Meteorological Service of Canada as a Data Source

Over the summer, DAE added a new data source to our resilience engine to bring you more hazards within our neighbor the north. We added the Meteorological Service of Canada as a data source, bringing in more data and more weather hazards into DisasterAWARE Enterprise. We hope that these additional hazard alerts have helped protect your assets and we are always looking for ways to improve our hazard generation and alerts’ breath, speed, and accuracy. Stay tuned for more enhancements in 2023!

Spotlight: Get Customized Asset-based Hazard Warnings with SmartAlert™

We’re removing the guesswork and unnecessary noise from your early warning alerts.

DisasterAWARE’s SmartAlert™ allows users to define a geographic area for alerts and automatically detects hazards that may threaten that area. When a hazard is detected, and the SmartAlert geometry intersects the user-defined area, an alert for that hazard is issued. SmartAlert only alerts about the hazards that have potential impact, eliminating erroneous alerts. It also aggregates multiple alerts issued by source agencies to reduce the number of duplicate alerts and the common problem of “over-alerting.”

Developed by climate scientists and disaster management experts, our new SmartAlert technology allows you to specify the area you want to monitor. It then automatically alerts you about hazards you need to worry about.

You no longer need to cast a wide net over areas outside your area of concern and sift through numerous alerts for hazards that will never reach your community. You tell us your area of interest, and our new SmartSense technology will take care of the rest.

How Most Alerting Systems Work

Most systems allow users to specify a fixed geographic area for alerts such as by ZIP code or geometric boundary. However, to receive alerts about sudden onset events originating outside the fixed area —such as with a tsunami or a moving threat like a tropical cyclone or tornado— users must specify a larger boundary and guess at how wide it should be. The extended boundary will send alerts for not only hazards like tsunamis and tropical cyclones that may have impact, but all that others could never pose a threat within te extended area.

How SmartAlert Works

SmartAlert allows users to specify a geographic area for alerts. It then automatically detects hazards both inside and outside the area that may pose a threat—such as with tsunamis or moving threats like tropical cyclones or tornadoes. When a hazard of interest is detected in advance, and its SmartAlert geometry intersects with the user’s area of interest, only an alert for that hazard is issued. SmartAlert also groups and aggregates multiple alerts issued by source agencies to reduce the number of duplicate alerts and the common problem of “over alerting.”

Check out SmartAlerts for yourself by signing up for a DisasterAWARE Enterprise free trial.

Hurricane Ian DisasterAWARE Enterprise Updates

Hurricane Ian is rapidly strengthening as it moves toward Florida. We are tracking its development and producing reports that show how it may impact the affected areas.  

Hurricane Ian Hazard Brief Image

Our Hazard Brief details how Hurricane Ian will likely impact the area’s population. This report is continually updated along the top of the image as new projections come out of our model.

Hurricane Ian SmartAlert Geography

In this screenshot, you can see the SmartAlert Geography. This area is shown in red and is the area we modeled to have a potentially disruptive impact from Hurricane Ian. Customers with assets in this red zone would receive SmartAlerts as new data is available. Often our models will update every 20 minutes to ensure our customers have the most current information. 

Hurricane Ian TOAS Rainfall Model

Here we overlay the TAOS rainfall model over our projected path for Hurricane Ian. This shows much of Florida is expected to receive 12 to 24 inches of rainfall from Hurricane Ian. 

To see even more Hurricane Ian projections and to track it as it makes landfall, or to see what hazards are in your area of the world, sign up for a free trial here and learn all that DisasterAWARE Enterprise can do for your organization. 

IAEA inspectors visit Ukrainian nuclear plant

We are proud to support our customer, the International Atomic Energy Agency (IAEA), as they inspect the Ukrainian nuclear power plant. DisasterAWARE Enterprise provides risk and impact intelligence for natural catastrophes and man-made events globally to the IAEA to assist them in improving the resilience of the world’s nuclear power plants.