When natural disaster hits, supply chains play a vital role in the community's recovery.
One of the most remarkable comments in the aftermath of the Joplin tornado was that of W. Craig Fugate, the new director of the Federal Emergency Management Agency. By all accounts, FEMA was credited with a very effective response, and Fugate shared his “Waffle House” disaster level recovery assessment index: “If the Waffle House is open and serving food and has got a full menu, then it’s green. … Is open but has a limited menu, it’s yellow. … Isn’t open, that’s red.” A strange comment at first to those uninitiated in supply chain risk management and disaster recovery, but so true if you think it through.
In the aftermath of the 2005 hurricanes, four companies were lauded for their supply chain resiliency and effective response: Lowe’s, Home Depot, Waffle House Restaurants, and Wal-Mart. The most important necessities required for immediate survival and the initial rebuilding in the aftermath of devastating natural disasters (with the last few years giving us ample examples of all of them: tsunamis, earthquakes, hurricanes, tornadoes) rely on the ability of these companies to continue their business operations in the direst of circumstances.
Their stores, many of their employees, and their logistic and supply operations (from warehouses to trucks to information technologies and communication networks) are fully exposed to the devastation. At the same time, the demand—or better stated, the necessity for their services and products—is at the highest possible level. The resilience and quick recovery of their operations and supply chains are among the better indicators of the ability of the affected communities to get the bottled water, the warm meals, blankets, batteries, flashlights, and generators needed through the early days of recovery.
Resilience and prompt recovery of these companies is key as the community starts the literal cleanup and rebuilding process of devastated houses, hospitals, and schools. Essential items such as ropes, ladders, extension cords, rakes, shovels, scoops, sponges, brushes, towels, mops, buckets, trash cans, trash bags, 2-by-4s, etc., simply must be able to reach the stricken communities.
The Value of Planning
Both Home Depot and Waffle House are world-class examples in their Disaster Management and Humanitarian Response Planning Approaches. The challenges they face are many: predicting customer demand after a disaster event; providing product required to the affected stores in an accurate and timely manner; establishing appropriate and ethical prices for their products; and maintaining adequate work-force levels after the event. The philosophy of both companies in such situations is more or less the same: getting back into the affected areas, opening stores as quickly as possible, and helping the local economy to rebuild.
As the former Waffle House Restaurants CEO, Bert Thorton, said after a hurricane: “Nothing good can come from a closed Waffle House after a hurricane—not for us, not for the community, not for the associates.” As customers, we couldn’t agree more, and we are grateful for it. We will accept that we cannot get our order of an “over-medium plate scattered, smothered, covered, chunked, diced, topped, peppered, and capped” in their limited menu after the tornado, and we will acknowledge their priceless service of hot meals to law enforcement, emergency responders, and anxious locals.
Joplin’s local Waffle House survived. Applebee’s, which eluded the tornado by 200 yards, contributed to the early recovery efforts through hundreds of boxed lunches delivered to the American Red Cross triage centers.
Unfortunately, a Pizza Hut store and other restaurants in the tornado’s way were flattened, as was a Wal-Mart super center and a Home Depot. The Lowe’s stayed open, and the company shipped truckloads of generators, water, cleaning supplies, shovels, and building materials in support of relief and rebuilding efforts.
Home Depot swiftly responded by opening a temporary 30,000-square-foot structure within two weeks of the tornado, and business was contracted in the parking lot of their demolished building prior to the new facility. With one-third of the homes gone, Joplin has never needed their services and products more.
Using the “Waffle House” disaster recovery index, I would say Joplin is a “yellow.” And like the supply chains and operations of our company examples, “resilience” is the virtue that the Joplin community and its leaders have to aspire to over the next few months.
Just as resilient materials recover to their original shape following a deformation, communities and their supporting businesses should measure their success in the aftermath of tornado disasters in terms of the speed at which they can return to their normal performance level.
Joplin seems to be starting on the right path.
Panos Kouvelis is the Emerson Distinguished Professor of Operations and Manufacturing Management at Olin Business School, Washington University in St. Louis.
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