Excerpt from Delivering the Goods: The Art of Managing Your Supply Chain (Wiley, 2002)
Before moving ahead with any action plan, you need to identify the key risks of moving ahead. These are some questions for your contingency planning, your reality test: What do you do in the event of budget problems or scheduling problems? What do you do in case of an earthquake or attack by terrorists? Unfortunately, as we saw on September 11, 2001, they are a part of reality, too.
Ask yourself: How intelligent are your policies and procedures you have in place in the event of a sudden breakdown in your supply chain? Having all the members of a team hop on a plane to meet face-to-face is nice from a theoretical point of view, but not very realistic. With less and less face time, organizations need to cooperate and adapt their policies and procedures to this new virtual, less personal world.
Gus Pagonis, the genius of the Gulf War, who crossed the military/civilian divide and now runs the logistics of Sears, Roebuck, and who is one of the role models for this book, is a strong believer in teleconferencing—with a caveat. He warns that “if you had an inefficient meeting before, it’s really going to be disastrous if you try to do it telecommunicating. So I think that the whole business world is in for a huge wakeup call.” Translation: Better technology doesn’t necessarily make for a better meeting. First, the minds who go into that meeting have to give some considered thought to what they want to accomplish in that meeting, or else the result will simply be televised bedlam. Mixed-up minds will make for a mixed-up meeting, whether it is televised or not. This means that all of the members of your logistical team have to know your company’s logistics, including your fallback system incase of a September 11 or similar disruption before the emergency takes place.
What are your contingency plans in the event of an all out disaster? On the morning of September 11, after the first plane had hit the World Trade Center, and even before the second plane hit 18 minutes later, General Pagonis quickly activated his contingency operations center at Sears. Consequently, Pagonis knew and was able to tell his CEO and commanding officer where all of the company’s trucks were at that point in time, which ones were stranded, which couldn’t get through customs, where his containers were, which stores were closed, what malls were closed, what tunnels were closed, and so on and so forth.
Having practiced for such a contingency on numerous occasions, as well as having the operations to deal with it in place, Pagonis and his corporate logistics team were ready to switch into lockdown mode at a moment’s notice. Consequently, there was no breakdown in the Sears supply chain at all. Although Pagonis’s team had to go to 24/7 mode, as did similar logistics teams at corporations around the country, Sears suffered virtually no logistical problems at all. Even with FedEx grounded for three days, Pagonis and his team were still able to deliver the goods.
How well did your company respond to September 11? How good are your contingency plans? Are you as prepared as Sears was for a sudden disruption to your supply chain?