The Boy Who Cried Wolf -- Disaster Planning and the Supply Chain

We all remember the fable of a shepherd boy who tended a flock of sheep near a village and devised a plan to provide some amusement to his stultifying boredom. Several times he brought out the villagers by crying "Wolf! Wolf! and when the town's people came to help him, he laughed at them because they had fallen for his ruse.

The Wolf however did come at last. The shepherd boy ran again to the village, but when he cried "Wolf!" this time, his neighbors did not heed his cries or offer any assistance as they believed that the boy was, again, just "having them on". The Wolf obliterated the flock at leisure.

The moral of this story is that no one believes a liar, even when telling the truth. Yet I believe when considering Disaster Planning for the Supply Chain, this story has a different moral -- When constantly barraged with news coverage of a real or threatened catastrophe, we have become desensitized and an immunity develops that creates its own threat -- that of indifference and that could prove disastrous for business operations and the Supply Chain.

In the last several years we have witnessed the scourges of 9/11, Hurricane Katrina, and SARS, to name a few. Now there is talk of a pandemic and how, theoretically, it could impact both our personal and business lives.

There is a great deal of chatter about having contingency planning in place for any and all such disasters, yet as soon as the immediate threat has passed by, the priority for action sinks as other critical business issues take precedence.

Some corporations surely have full scale disaster plans, but how many of them have been tested in a mock scenario? Most businesses, however, have done minimal, if any planning towards an interruption in supply chain, perhaps believing that it will never affect them, or that they would be able to react in a crisis. They forget that hope is not a strategy!

There is also a tendency to focus on "The Big One", while the reality is there are many minor threats that could result in an interruption of business. The pundits who subscribe to the world coming to an end and the predictions of Nostradamus are being played out. may be missing more common hazards to business continuity

Have you planned on strikes by any of your suppliers? Are you protected against a sole supplier going bankrupt? What about a disruption in the border crossings, a train derailment etc.? What about blackouts? When the most of the North East of Canada and the US went dark -- how many companies were left scrambling?

Crisis management should not be left until a crisis occurs. There should be available a continually updated business continuity plan, that should be both general and specific at the same time. There will always be disasters that occur that could never have been predicted (such as 9/11) and any disaster planning can never capture all eventualities.

Yet by focusing on both the small scale and large scale contingency planning, a discipline will be set that will provide an agreed to process. The process needs to be tested to determine its viability -- engage in a trial run.

Also, once developed, it cannot gather dust on a shelf, as so many of them do. The plan needs to be dynamic, to allow for change in personnel, business activity, suppliers, customers, locations. To review it any less than once a quarter is, in and of itself, a recipe for disaster.

Make sure that when an unexpected catastrophe occurs, either large or small, that your business is prepared. Otherwise, your clients and suppliers will be reverting to their business continuity plans which they had available in the event that your firm goes bankrupt!