David Maloney, Editorial Director, CSCMP’s Supply Chain Quarterly 00:02
The Covid-19 pandemic showed us just how vulnerable supply chains are. Today we face many threats: shipping delays; a lack of workers; failing infrastructure; transportation rates that are out of control; cybersecurity threats; and of course, a worldwide pandemic that is still very much with us. But with each of these threats comes opportunities. Welcome to this limited podcast series from CSCMP’s Supply Chain Quarterly, the Top 10 Supply Chain Threats.
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Today, we focus on weather extremes. Here is your moderator for this segment, Mitch Mac Donald, group editorial director emeritus of Supply Chain Quarterly.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 01:13
Hello, and welcome to the latest installment in our podcast series on supply chain risks. Our topic today is extreme weather and the risks it pose[s] to supply chains worldwide. And with both severe weather and supply chains in the mainstream news like never before, who better to join us for discussion on this topic than Kathy Fulton, the executive director of the American Logistics Aid Network, or ALAN, for short. Kathy, thanks for joining us. I think it's your first podcast seating with us. We're excited to have you. The general consensus, clearly, is that not only is weather becoming more extreme, but it's popping up in nontraditional ways in nontraditional areas. Now, as part of your work with ALAN, you have to be much more plugged in than a lot of us on this. Is that general consensus, right? Is the weather getting worse, and is it hitting areas in ways it historically has not?
Kathy Fulton, Executive Director, American Logistics Aid Network 01:35
Hey, thanks for having me. Yeah, absolutely. I mean, you can see the number of extreme events climbing over the past, you know, decade even, but in different ways. Thinking, you know, I think about the drought we're having out in California right now, right, you know, just historic, low lake levels, and, you know, conversations we've never had to have before, because of these extreme events. You look at 2020 and the hurricanes that we had: record number of hurricanes. So, that number and the, not just the extremity of the events, but the impacts that they're having on populations. So, weather's not a problem if it's happening where nobody lives...
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 02:43
Right.
Kathy Fulton, Executive Director, American Logistics Aid Network 02:44
but now we're building in places, and the weather is occurring in places, that is having an impact not just on humans, but on our supply chains, which means also more humans.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 02:55
Exactly. Yeah. And as you're saying that, I'm thinking about, in terms of places you wouldn't actually see it. I don't think ever in our lives that we've seen a video image of water running down the stairs into a New York City subway.
Kathy Fulton, Executive Director, American Logistics Aid Network 03:08
Right.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 03:08
Yeah.
Kathy Fulton, Executive Director, American Logistics Aid Network 03:08
Right, yeah, I mean, and the loss of life that accompanies that, because we're not accustomed to dealing with that, right? We're just—we have not built our infrastructure to handle these extreme events. So, as we look at, how do we mitigate, how do we prepare for these things, it's going to take really creative thinking, not just for, like our built environment, but also how we live our lives.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 03:34
Right. Right. Now, things are changing, and they'll continue to. On the difference of some different geographic areas being impacted, ALAN is coming up on 15 years?
Kathy Fulton, Executive Director, American Logistics Aid Network 03:46
Sixteen. Hurricane Katrina in 2005, so 16 years.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 03:49
Yeah, um, in, you know, a lot of experience now, a lot of sense of how to best rally support, how to deploy support, how to get things where they needed to be, but now that they're starting to have to be in different places. Is that complicating, or are you in the routine and say, we just do the same things, but now it has to go to New Jersey rather than Mississippi.
Kathy Fulton, Executive Director, American Logistics Aid Network 04:13
The Gulf Coast, right. Yeah, it is different. But the thing that I would say that helps us is that there are logistics operations everywhere and, with pushing more logistics into urban areas, you know—and we can talk about whether that, whether that has an impact on some of these extreme events—but as those you know, as those logistics hubs get closer to point of consumption, that means that those assets and resources become available to us to support the humanitarian activities.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 04:49
So, the naturally occurring expansion of logistics operations, to quote get closer to the customer is being done for capitalism reasons, for commerce, for business, but it's actually, there's a side benefit that now we have more options deployed in more areas?
Kathy Fulton, Executive Director, American Logistics Aid Network 05:07
That's right. Yeah, I mean, you know, we still have pockets of the country where, you know, it just doesn't make sense to have that density of logistics. Fortunately, at least for now, those are still areas where the extreme events, you know, don't have as much impact, you know. As more people move to Wyoming and Montana, for example, the logistics, you know, infrastructure will follow. So, it's a race.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 05:38
Yeah. Is, are there any specific things that—not speaking in terms of, in support of ALAN, and response, but just, you know, in crisis situations, it affects supply chain resiliency?
Kathy Fulton, Executive Director, American Logistics Aid Network 05:51
Yep.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 05:52
Any thoughts on any changes in approach a process that supply chain folks might have to consider to prepare for the fact that the resiliency of my supply chain is going to be tested more often, and in more ways than I ever thought.
Kathy Fulton, Executive Director, American Logistics Aid Network 06:04
Yeah.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 06:05
What should they be doing?
Kathy Fulton, Executive Director, American Logistics Aid Network 06:06
Well, you know, this is one of the areas where I think technology is keeping pace or advancing beyond how we're using it. So, the visibility that has been, you know, growing over the past few years, you know, this, this push towards being able to see end to end with your supply chain, gives us an advantage to also say, "Okay, well, if we know this information about our supply chain, about our nodes and flows, right, where our physical components are, then we can layer on top of that the particular risks that are occurring." So, we can see how a new extreme event, you know, that may not have occurred in a place previously, is going to impact our supply chains, okay? So, I think from that perspective, having that visibility, applying it in those ways, whether it's digital twins, or whether, you know—I don't know all the technology terms anymore—but I think that that's going to help us better respond to prepare or mitigate against these extreme events.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 07:12
They actually, as you're saying that, they're actually, I mean, the purpose and objective of a supply chain in its normal state, is not all that different than the purpose and objective when it's trying to help respond to a disaster. So, the same approaches, as you're saying this thing, it's the standard answer: It's your job to fully exploit enabling technologies, if you don't, you'll be at a disadvantage. That's really where [we've come].
Kathy Fulton, Executive Director, American Logistics Aid Network 07:35
We talk about not just exploiting the existing technologies, but exploiting their design. So, if you think about, you know, exactly what we talked about, we have these planned bottlenecks, as they were, of logistics hubs.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 07:51
Yeah. Yep.
Kathy Fulton, Executive Director, American Logistics Aid Network 07:51
Right? But that also means that's a concentration that we can draw upon, and because they're closer to the people, that means there's more of them. So, if Hub A within a city is down, maybe Hub B can surge to support it. But it's thinking about, how do we do that on the fly? So, how do we, how do we recognize that we can shift those flows to continue to serve a population?
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 08:18
Has ALAN's ability to respond when needed during this pandemic period, at a time that many supply chains are, if not fully broken, at least seriously impaired, has that trickled down to impact ALAN's ability to respond in the way you want it to, and if so, could you tell us how that...?
Kathy Fulton, Executive Director, American Logistics Aid Network 08:39
Short answer is, absolutely, yes, one hundred percent, and because, you know, I don't want to take resources away from a supply chain that is already stretched thin, right? So, being able to ask our partners, Hey, can you donate your services to support this, you know, other supply chain, this other need that is occurring?, that we have to think about that closely. Like, is it better to keep that pre existing supply chain moving, or is it better to, in that moment, serve the the replacement supply chain? We've had amazing support from the, from the industry. You know, people are finding creative ways to support us, whether that is, you know, working not with just their primary assets, but partner assets, you know, helping us to really dig down through the supply chain, find that available capacity, find the ways to continue serving those who are affected by crisis.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 09:39
To close: Neither of us are scientists, and I would not suggest either of us are experts, but by the nature of your work and the great work you do. you may have some insights that are a little deeper than the rest of us. Is this going to continue to escalate? Is this going to—are we not yet near the end of seeing what climate change could do in terms of impact to supply chains?
Kathy Fulton, Executive Director, American Logistics Aid Network 10:06
In my unscientific, but studied, opinion...
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 10:12
You asked the question better than I did!
Kathy Fulton, Executive Director, American Logistics Aid Network 10:14
No, I truly do believe that we are reaching that tipping point where it's going to be very hard to come back from, right? So, we have to think about, how do we restructure our supply chains so that there is less impact on the environment, so that we're not doing more harm by our activities, than good, you know? And whether that means, you know, nearshoring, reshoring, or just, you know, completely changing our model, we do have to change something.
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 10:50
Both the business case and the human case for having a more sustainable supply chain is being made right in front of us
Kathy Fulton, Executive Director, American Logistics Aid Network 10:57
One hundred percent, because, I mean, what's the point of having fabulous supply chains if there's no one, you know, if the earth can't support the people to... ?
Mitch Mac Donald, Group Editorial Director Emeritus, CSCMP’s Supply Chain Quarterly 11:08
Absolutely. Kathy, thank you, as always, you've given us some great insight for our audience, and thanks for joining us for a conversation. And thank you for tuning in. If you haven't done so already, please subscribe to this podcast so you can listen to our entire upcoming series on supply chain risks. I'm Mitch Mac Donald, and thanks again for listening to the Supply Chain Quarterly podcast.
David Maloney, Editorial Director, CSCMP’s Supply Chain Quarterly 11:32
Thank you for joining us for this podcast from CSCMP’s Supply Chain Quarterly, the Top 10 Supply Chain Threats. We encourage you to subscribe wherever you get your podcasts.