Logistical Failures

Our society runs on logistics that many of us never need to consider. A crisis brings these hidden processes to the fore. Just as strategy depends on execution, business continuity depends on logistics. Do you understand yours?

The rush to reopen global economies in the Covid pandemic has revealed yet more frailty in global supply chains and the logistics behind many service businesses. As returning workers get disease and spread it to their colleagues we see rolling shutdowns In factories, trucking, warehousing and all the way forward to retail and restaurants.

We even see these infections forcing logistical issues in our healthcare systems from lack of testing capacity, lack of supplies to workers struggling with leave, illness and exhausting shifts relentlessly.

Again and again in crisis times it is simple logistics that causes greatest pain, lack of housing and clean water leading to illness, lack of food leading to unnecessary death and lack of building materials slowing recovery.

People often ask how can it happen? Modern logistics systems are complex systems and lean inventory management can lead to multiple potential points of failure and the prospects of cascading failures. Whiplash effects can develop as critical commodities are overordered, stockpiled, diverted from other uses and substituted.

Governments, Business leaders and their boards need to understand their supply chains and how they will perform in fair weather and foul. This work must involve tracking supply chains offshore and understanding alternate sources of stress.

Planning for failure should be a key part of crisis planning and business continuity exercises. Allowing for redundancy and contingencies should be a key part of mitigation plans. While in sunny days you may rely on deep labour and supply markets, we have seen that nothing of the source can’t be relied on when weather turns foul.

Bring these key processes and employees into your strategic and risk planning. It’s no excuse if you don’t know or can’t find your supply chains. Make sure key executives know your key suppliers and their suppliers if need be.

Customers and other stakeholders won’t take excuses and rain checks when it matters. Worse still your lack of planning may contribute to wider systemic failures or downstream affects that delay a crisis response. Make sure you understand all your logistics risks.

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