What We Think

Let it snow – but not on my supply chain

In the period following Christmas, the weather in Europe is often unpredictable; icy winds from the North East swirl in causing a rapid drop in temperature. And then it snows. The usual scenario is this: flights and trains are delayed, fuel and gas are in short supply, deliveries are disrupted and people’s buying habits become erratic.

M1 accident involving SIX lorries causes traffic chaos in Derbyshire

The pile-up happened on the northbound carriageway between junctions 29a and 30. The road was closed from junction 29 northbound while emergency services cleared the carriageway. One lane of four re-opened shortly after 8am, a second reopened at midday and the remaining two opened at 1pm.

Adverse weather is not only inconvenient it is also expensive.

The UK Big Freeze of 2009 lasted three weeks and cost insurers more than £14bn. For businesses in the FMCG sector, especially in perishables, the greatest impact was the disruption to transport between manufacturers, distribution centres and retailers which cost more than £400m per day.

Consumer behaviour

Forecasts of heavy snowfalls can cause panic buying and suddenly demand is far outweighing supply – this is great news for retailers. People have emotional reactions and stock up on extra food, fuel, drinks and other key items. They also tend to hibernate, making more use of internet shopping, even paying extra fees for expedited delivery. Problems occur when such deliveries are disrupted, communication from the seller is often non-existent and so tempers flare. Damage can be done to brand reputation if goods are out-of-stock or not delivered as promised.

Supplier relationships

In extreme weather events like heavy snowfalls and blizzards that cause traffic delays, supplier relationships that have been nurtured over the years will now start paying off. Your first tier suppliers should have their own contingency plans to address immediate problems but the blockage may be further down the supply chain with their suppliers – your second tier suppliers. Do you know where your key suppliers source their goods and services? Mapping your supply chain in advance can pay dividends when you need to understand what can go wrong in times of crisis.

Manufacturers and retailers are signing up for long-range weather forecasts so that they can make early decisions about inventory levels. Sales of winter clothing shoot up when there is a cold snap. Knowing what the weather may do lets retailers schedule their advertising and sales promotions well in advance for maximum benefit.

Develop a contingency plan

  1. What can we do to reduce the impact of severe winter weather? This 10-point plan will provide resilience and flexibility:
  2. Understand every link in your supply chain and develop a solution for any link that could be broken – through from demand planning to reverse logistics.
  3. Test the plan by running a simulation of each major problem area before the snowstorm comes. When the real thing happens you will have seen it before and will know how to solve it or at least mitigate it.
  4. Collaborate with your 3PL suppliers and ad-hoc transporters on how they can provide additional capacity in an emergency and at what rates.
  5. Look for flexibility within your suppliers’ own operations. Could they deliver direct with their own transport or could retail customers collect?
  6. Maintenance should be done on all delivery vehicles in early winter to ensure both reliability and driver safety. In the warehouse area, check external walkways, car parks and ramps for possible safety issues and take preventative measures.
  7. Grit and salt are often in short supply when the weather turns. Snowstorms and blizzards are inevitable at some point during winter. Stock up early or outsource the responsibility to an outside contractor to make sure your vehicles can leave and return to your premises safely.
  8. Make the best use of GPS systems both at your base and onboard vehicles. Intelligent decisions can be made using real-time feedback from computers installed on trucks. Drivers have the ability to summon help urgently in a crisis or breakdown and receive instructions to divert or return to base. Information can be relayed to drivers about current extreme weather and driving conditions to permit re-routing or diversions.
  9. Have a backup plan for any power outage or technology failure. Supply chains are heavily dependent on I.T. networks to keep operations running.
    Snow clears by melting. Flooding will follow when the water has nowhere to go. Keep drains and other runoff areas clear.
  10. Communicate your plan internally so that everyone knows how you plan to avoid service failures and meet customer expectations.

In bad weather, logistics take the strain through vehicle breakdowns, accidents and traffic delays. Systems are under pressure from power outages and essential staff has problems getting to work. Even though we can’t control the weather, we can be prepared.

Go Supply Chain Consulting can help you to optimise your supply chain operations. We provide capacity and productivity solutions in fast-changing business environments.

Our directors are experienced logistics consultants who have worked closely with clients in a range of sectors and countries to improve or expand their warehouse and distribution centre operations.

Published by: Go Supply Chain Ltd