The
MBA program in Supply Chain Management
at NC State University is unique among business
schools. With the support of the Supply Chain
Resource Consortium, an industry/university
partnership, the program brings the industry into
the classroom, involving students, faculty and supply
chain professionals in finding solutions to the
real industry problems. This project-based approach
to education reflects the new model for business
schools described by Peter Drucker.
For
more information...
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Peter
Drucker...
"Management is a practice, like medicine;
and the model should have been the medical school,
where the bulk of the teaching, especially the most
important teaching of the M.D. in his or her residency,
is performed by practitioners. Unlike medicine,
where you can bring sick patients into the classroom,
business education does not allow you to bring an
organization into the classroom. You can, however,
bring experience in through your faculty and students.
Business educators should be out as practitioners
where the problems and results are."
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9/28/04
Supply
Chain Disruptions
Written
by:
Scott Hudson, SCRC |
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Weather
causes many disruptions and disasters around the
world. Hurricanes, floods, heat waves, and earthquakes
cause large scale disasters where people need
assistance. An efficient, planned supply chain
is critical when responding to natural disasters.
Home improvement stores have used a war
room strategy to respond to the busy 2004
hurricane season (1). Hospitals must also use
efficient planning and prepare the supply chain
for a looming hurricane (2). Lynn Fritz, of the
Fritz Institute, says the ultimate logistics
challenge is improving the supply chains of humanitarian-relief
organizations that deal with the aftermath of
earthquakes, hurricanes, droughts, wars, and other
natural and man-made disasters (3). On the
lighter side, in England, supply chains stretched
and buckled to keep up with beer demand
during the heat wave of summer 2003 (4). These
are examples of the supply chain being utilized
to its potential during times of need.
Supply Chain during the Busy 2004 Hurricane
Season
Hurricanes tear up houses, boat docks, businesses,
and most everything in its direct path. Hurricanes
also disrupt peoples lives for several days
at a time when they must get out of the direct
path of the storm. Businesses must be prepared
before and after the storm to handle increased
demand for many items. Hospitals must have emergency
supplies ready for immediate delivery. Many hospital
supply distributors keep specified emergency supplies
on hand for this purpose (2). Before Hurricane
Charley, the materials management director at
Jackson Memorial Hospital watched weather reports
and ordered extra supplies from the distributor.
He recommends that emergency plans should be in
place and must be implemented with precision,
or supplies may not get to the hospitals that
need them (2). This advice should be used
for all businesses because emergencies affect
all business in one way or the other.
The supplies at home improvement stores are also
critical in preparation for a hurricane. Home
Depot and Lowes use a war room
strategy to respond to the needs of its customers.
In a Home Depot war room, the Weather Channel
is projected on a large screen, maps on the walls
track a hurricane, and phones are connected to
many stores in the storms path. Managers track
the storm and communicate with the stores to see
what is selling out and what needs to be replaced,
and how to handle the employees that need assistance
(1). This strategy keeps store shelves stocked
with the appropriate materials. The decisions
makers are all in a central location and can react
quickly to changes in the storms path or
problems at any store. In preparation for Hurricane
Frances, Home Depot dispatched 1500 trucks to
130 Florida stores in one week. For Hurricane
Charley, Lowes shipped 25,000 generators
to Florida (1). The response to increased demand
during critical times can only be achieved with
an efficient, well planned out supply chain process.
After
the Storm
To help in responding to natural disasters, Lynn
Fritz has formed the Fritz Institute, a nonprofit
organization to assist relief organizations with
humanitarian-aid logistics. After a disaster, relief
organizations are deluged with money, food, and
supplies (3). These supplies must be delivered to
the right people at the right places at the
right time (3). Unfortunately, relief organizations
are not organized to handle the delivery of these
items. Many times foods rot in warehouses and corn
arrives too late for planting season (3). Because
disasters are very unpredictable, occur in remote
places, and needs are unknown, logistics difficulties
frequently occur.
The Fritz Institute has spent more than $1 million
since 1996 to assist humanitarian organizations
such as the Red Cross develop web-based software
for logistics purposes. This software automates
manual processes, tracks donations, and helps organize
relief efforts (3). Fritz says this is only the
beginning of the task to study and improve the logistics
of relief organizations. He hopes more college students
will be interested in this type of field. The business
community can also learn from these efforts and
contribute its logistics knowledge to the relief
community.
As supply chains grow and expand globally, the weather
will play an important aspect in planning reactions
to supply chain disruptions. Business must be prepared
with a plan to respond to these situations. Several
companies build weather forecasts into the supply
chain as a factor (3). With increased population
growth, these events will affect more people and
more businesses at the same time. Is your business
prepared to respond to its next weather disruption?
References:
(1) Stafford, Leon. Home Depot hunkers down. The
Raleigh News and Observer. September 4, 2004.
(2) Anonymous. Preparation helps save supply chain
after hurricane devastates parts of Florida. Hospital
Materials Management. Sept 2004.
(3)
Bonney, Joseph. The ultimate logistics challenge.
Journal of Commerce. Dec 2003.
(4)
Wheatley, Malcolm. How to beat the heat. Supply
Management. Sept 2003.
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