IS-0238 Critical Concepts in Supply Chain Flow and Resilience

"What’s your next step?" Video Transcript

Lesson 5: Facilitating Private Sector Supply Chain Resilience

FEMA's After-Action Review of the 2017 Hurricane Season included this message:

The unparalleled scope and scale of the 2017 Hurricane Season underscored the need for, and identified several limitations in, implementing timely national response capabilities that are fully integrated with and supportive of private sector supply chain restoration.
In 2017, public and private sector response and recovery efforts were too “stove-piped” to share timely information, too slow to consult, and as a result, often too late to synchronize stabilization efforts.
The public and private sectors are inextricably linked and must have shared situational awareness and the ability to synchronize their respective efforts to be successful.
FEMA should work with its key partners to develop a more comprehensive understanding of local, regional, and national supply chains, as well as stronger relationships with critical private sector partners to support rapid restoration in response to catastrophic incidents.
As a result, the Agency is adopting new response principles to closely align public and private sector efforts in a unified effort focused on rapid stabilization of key lifelines.

Looking ahead, as an Emergency Manager, you have a new FEMA mandate to look, listen, and collaborate with supply chains in your jurisdiction. Your goal will be to facilitate the restoration of critical supply chains following a disaster event.

This course is not intended to prepare you to have direct discussions with business leaders but to provide you with the foundational knowledge so you can participate in state-led planning and collaboration efforts.

As you engage in this lesson, think about these questions:

What are the critical private sector supply chains in your jurisdiction?
What could you bring to a relationship with a supply chain partner?
Where can you get more training or information on FEMA supply chain resilience initiatives?

Let's get started.

Lesson 5 Objectives

At the end of this lesson, you will be able to:

Describe the objective of supply chain resilience initiatives
Describe the three categories of supply chain resilience policies
Describe methods for supply chain resilience analysis and enhancement

This lesson should take approximately 30 minutes to complete.

What is supply chain resilience?

Supply chain resilience is the ability of a preexisting demand and supply network to deploy its surviving capacity, and/or introduce new capacity, under severe duress.
It is the ability of a network, or portion of a network, to continue moving (directing, redirecting, flowing) goods and services, even when important elements of the network are no longer operating.
Resilience requires a supply chain to be able to resist disruptions and recover its operational capability after a disruption occurs.

Resistance

Resistance is the supply chain's ability to minimize the impact of disruption, such as a natural disaster, by either evading it entirely or by minimizing the time the disruption affects the supply chain. Resistance is a good indication of how well a supply chain can predict and lessen the impact of any disruption.

Recovery

Hanging sign stating Back in Business, Now Open

Recovery is the supply chain's ability to return to full operations once a disruption has occurred. First, a supply chain must go through a stabilization phase. After that, it can work to return to its previous performance levels. Once recovery is complete, companies will often take time to learn from their experiences to help in future planning and risk management strategy development.

Emergency Manager's Roles in Supply Chain Resilience

Dial graphic showing Emergency Manager's role in supply chain resilience. On right side: develop awareness. On left side: foster collaboration. Around the center: minimize impact.

The objective of any supply chain resilience initiative is to minimize the impact of a disruptive event (e.g., hurricane or all-hazards disaster) on the affected population and to do so as efficiently as possible.
Emergency Managers have two primary roles related to supply chain resilience:
- To foster collaboration with and among supply chain partners to promote actions that make supply chains of critical goods and services more resilient.
- To develop an awareness of supply chains and their vulnerabilities and use that information to inform response and recovery planning.

What does awareness and collaboration look like? Video Transcript

Emergency Managers can play a critical role in enhancing supply chain resilience by fostering awareness and collaboration among key supply chain players and by promoting actions to enhance supply chain resilience.

They must also be aware of supply chain vulnerabilities and potential impacts to the community so that they can develop effective emergency response plans and can operate efficiently in times of disaster. For example, emergency response plans are often based on the assumption of working supply chains. Awareness of vulnerabilities can help Emergency Managers understand the potential impacts of disrupted supply chains.

In addition, this level of awareness can help managers to support the private sector in re-establishing supply chains and to take necessary actions to mitigate the impacts. These actions can include prioritizing the stabilization of critical supply chain infrastructure, reviewing stockpile options, or identifying alternate supply chains for emergencies when needed.

Integrating the needs of supply chains into mitigation, response, recovery, and resilience planning and actions is key to improving supply chain resilience and ensuring the availability of key goods and services. To effectively support supply chain resilience and develop response and recovery plans, Emergency Managers must understand the activities and principles for each local supply chain, similar to the general understanding they have with law enforcement, fire suppression, emergency medical services, and public works. Awareness of supply and demand flows, bottlenecks, interconnections, and interdependencies between supply chains is as important to disaster planning and resilience building as knowledge of the local road networks and floodplains.

Obstacles to Collaboration

Graphic of a road blocked by three barriers labeled: legal actions, costs, competition.

Emergency Managers frequently foster collaboration to create and promote resilience efforts across private and public sectors.
However, few supply chain players have experience coordinating with Emergency Managers. It can be challenging for Emergency Managers to engage these organizations with disaster planning and resilience-building actions.
For example, some regulated public sector and private sector supply chains may require legal actions to build or improve resilience, with the costs being transferred to the residents and businesses in the jurisdiction.
Other supply chains involve private sector businesses that compete with each other and are reluctant to share any information that reveals their strengths and weaknesses. This can hinder collaboration and hide interdependencies.

FEMA Supply Chain Resilience Policies

FEMA has begun the long process of policy changes, strategic alignment, operational redesign, professional development, budget alterations, and more to support supply chain resilience and the rapid reestablishment of lifelines.

Public and private sector policies for achieving supply chain resilience can be divided into three categories:

Mitigation and preparedness actions to help a system avoid and withstand disruptions (readiness)
Emergency relief through the establishment of temporary replacement supply chains (response)
The restoration of normal supply chain performance through repair of damaged infrastructure, nodes, links (recovery)

Readiness: Advance preparations can include building up inventories of components and/or finished goods as a protection against capacity outages (a strategy often employed by Emergency Managers through “pre-positioning” of critical supplies in or near the affected area), and hardening key production and distribution processes (for example, equipping selected service stations or gas pumps so they will be able to dispense fuel during a power outage).

Response: The classic response to the need for emergency goods and services in the wake of a hurricane is to set up special relief supply chains. Government agencies (for example, FEMA, Army Corps of Engineers, and state governments) and nongovernmental organizations (for example, American Red Cross, Catholic Charities, Feeding America, National Baptist Convention) deliver food, water, medical services, and many other essential commodities to disaster-stricken communities. The special-purpose relief supply chains used by these organizations can undoubtedly save lives and reduce human suffering. They are, however, less efficient and less precise in meeting demands than the supply chains they attempt to replace.

Recovery: Because established private sector supply chains have been optimized over time in response to profit motivation and market competition, they will always be more efficient at matching supply with demand than special-purpose emergency supply chains. Hence, a vital management response is to restore these supply chains as quickly as possible. The private sector will often seek to do this in service of companies’ business objectives. But a lack of coordination among government, nongovernmental organizations, and private companies can slow the restoration of regular supply chains.

Private Sector Resilience Efforts

Business continuity plans often consider factors such as transportation and communication equipment, off-site back-up locations and capabilities, supplies of essential materials (e.g., water, ice, food, fuel, batteries, generators), and robust contracts with suppliers who can respond quickly during an emergency and enable continuity of operations.

Disaster Effects on Supply Chains: Video Transcript

Hello, I'm Kathy Fulton, the Executive Director of the American Logistics Aid Network or ALAN. ALAN works with businesses, government, and non-profit organizations to support continuity of supply chains during crisis.

Caribbean Restaurants, a Burger King and Firehouse Subs franchise in Puerto Rico, was able to reopen more than 75 percent of its 187 restaurants and served more than 120,000 customers a day just one month after Hurricane Maria. The franchisee was able to accomplish this feat of resiliency because it had inventories, communications systems, and workers ready to respond.

It relied on an experienced network of drivers and an internal fleet of 25 trucks to deliver products to its stores. It also benefited from a company-owned 10-day supply of diesel fuel, supplemented with fuel shipments from its longtime supplier—which in turn had its own distribution channels, containers, and fleet of trucks to distribute gas across 40 different stations throughout the island.

This case study appeared in the Center for Naval Analysis report, Supply Chain Resilience and the 2017 Hurricane Season: A collection of case studies about Hurricanes Harvey, Irma, and Maria and their impact on supply chain resilience (2018).

Effective Collaboration Efforts

Emergency Managers are not expected to become supply chain management experts, and much of the information used by supply chain managers is considered proprietary data. However, Emergency Managers can use available information to become more aware of the vulnerable populations and critical supply chain characteristics in their jurisdictions.
Researchers who studied the impact of the 2017 hurricane season on Texas, Florida, Puerto Rico, and the Virgin Islands developed the following recommendations to support private-public collaboration in supply chain resilience:
1. Identify the most at-risk, densely populated areas.
2. Identify key nodes and links for water, food, and fuel in these at-risk areas.
3. Develop relationships and a sentinel system for monitoring flow through these nodes and links.
4. Give sustained and strategic attention to hourglass structures within supply chains.
5. Continue to reconceive and reform the FEMA catastrophe response strategy to facilitate and gap-fill flows that are crucial to supply chains and lifelines.

Develop a Strategic Understanding

Emergency Managers should develop a strategic understanding of the current supply chains in their jurisdiction and engage with relevant stakeholders, such as vendors and industry associations, to foster public-private sector collaboration, cooperation, and planning.
Emergency Managers may find it helpful to begin their research by focusing on a supply chain for a single good or service, such as groceries or fuel. They can later expand their focus to a community lifeline, which may encompass multiple goods or services.

Note: Before engaging with private sector entities, Emergency Managers are encouraged to complete additional training and seek out established communication channels.

Supply Chain Resilience Process

The Department of Homeland Security’s Supply Chain Resilience Guide provides a five-phased cyclical approach to enhance supply chain resilience.

Phase 1 - Research and Mapping: Phase 1 uses readily available data, such as open-source information or other available data sets, to identify and map supply chain nodes. This information, which the Emergency Manager will analyze in Phase 2, provides important insight into the supply chain’s key players.

Phase 2 - Analysis: After identifying and mapping the demand and supply nodes, in Phase 2, Emergency Managers conduct an initial analysis of the supply chain by examining the importance of specific suppliers and nodes previously identified and targeting outreach to these potential stakeholders.

Phase 3 - Outreach: After analyzing the supply chain, Emergency Managers can engage with key stakeholders during Phase 3, including private sector organizations, relevant jurisdictions, and other community partners, to vet their findings, begin the collaboration process, and potentially uncover supply chain resilience issues.

Phase 4 - Action: After engaging with key stakeholders and identifying and prioritizing issues to address, Emergency Managers can collaborate with relevant stakeholders to develop and implement preparedness activities and enhance supply chain resilience in Phase 4. Emergency Managers can develop and implement preparedness activities, including tabletop exercises, with partners to enhance supply chain resilience. These preparedness activities may include actions that private-sector partners can take, either to mitigate disruption of their nodes or links or to create continuity in the event of a disruption. They may also include developing or revising Emergency Operations Plan annexes or logistics plans outlining how the jurisdiction will implement logistics operations in light of potential supply chain issues.

Phase 5 - Assess and Refine: In Phase 5, the Emergency Manager maintains the effort by refreshing the data and revising the analysis as needed and continuing to collaborate with stakeholders. Supply chains and stakeholders are constantly changing, so an ongoing effort is critical.

View Supply Chains Through an Equity Lens: Video Transcript

Because the private sector is in business to make money, retail outlets are not evenly distributed in all areas. In high-income areas, there is a high density of retailers. On the other hand, in low-income or low-population areas, there is a low density of large retailers and high density of small businesses. This creates an increased risk of food insecurity for low-income residents or those living in low-population areas.

The Department of Agriculture has coined a term, “food deserts,” to describe geographic areas where residents have few to no convenient options for securing affordable and healthy foods—especially fresh fruits and vegetables. Access to clean water also follows a similar pattern. While high-income areas have benefited from investment in water infrastructure improvements, water supply systems in low-income areas have suffered decades of underinvestment and disinvestment.

Studies show that people of color live in areas with higher rates of contaminated water, stormwater and wastewater overflows, and increased risks of flooding. Emergency Managers need to direct their investments to serve all people equitably.

Success Story: Creating the Food Availability Index

Early in its Hurricane Maria response effort, FEMA developed a Food Availability Index to help assess the specific status of the 78 municipalities in Puerto Rico. The index consisted of the following information:

What is each community's Social Vulnerability Index?
What was the pre-storm percentage of people using PAN cards?
Are PAN transactions currently being made?
How people accessed food prior to Maria?
How many gas stations are open?
How often are they refueled?
How many grocery stores are open?
Do the grocery stores have refrigeration?
Are the grocery stores on the grid or on generators? If on generator, how often are they refueled?
How often are the grocery stores resupplied?

Success Story: Creating the Food Availability Index: Audio Transcript

Hello, I'm Nicholas Peake, a FEMA Headquarters Emergency Management Specialist.

Following statute and policy, FEMA's relief channel is required to respond to demand as expressed by state and local governments. Strategy and operations have been organized around this government-to-government pull. FEMA logistics, NORTHCOM, and other federal players want to push as much as they can, as quickly as they can, to fulfill this pull.

Initially, FEMA responded to pressures from the media, political pressure, and requests from the government of Puerto Rico to provide tens of millions of meals. These requests were based on fear and did not reflect the actual need. But the Business Emergency Operations Center in the JFO quickly began to develop a clearer picture of actual supply and demand using data from the electronic point-of-sale system used on the island.

The result was the Food Availability Index, which was used to determine how much and, specifically, where food was needed on the island. The Index allowed FEMA to support the Puerto Rican private sector and prevented the island from developing a false dependency on FEMA-supplied food. It also allowed FEMA to better manage its food relief expenditures.

With this reliable data in hand, FEMA was able to have actual fact-based conversations with Puerto Rico's mayors to discuss the decision to stop sending FEMA food into their municipalities. The Food Availability Index is an example of moving beyond government-to-government pull to understand what is happening in the whole community, the real economy, and the preexisting demand and supply network.

Supply Chain Resources–Part 1

National Academies of Sciences, Engineering, and Medicine (NASEM). 2020. Strengthening Post-Hurricane Supply Chain Resilience: Observations from Hurricanes Harvey, Irma, and Maria. Washington, DC: The National Academies Press. https://doi.org/10.17226/25490. After the 2017 hurricane season, FEMA sponsored a thorough and impartial examination of the private sector's supply chain constraints and asked for recommendations on how private sector and government response plans and planning can best collaborate based on lessons learned.
Center for Naval Analysis report, Supply Chain Resilience and the 2017 Hurricane Season: A collection of case studies about Hurricanes Harvey, Irma, and Maria and their impact on supply chain resilience, available at https://www.cna.org/cna_files/pdf/IRM-2018-U-018098-Final.pdf. This study, commissioned by NASEM, consists of case studies that examine the resilience of, challenges to, and interactions among private sector supply chains and the relief channel in Texas, Florida, Puerto Rico, and the U.S. Virgin Islands.
U.S. Department of Homeland Security, Supply Chain Resilience Guide, available at https://www.fema.gov/sites/default/files/2020-07/supply-chain-resilience-guide.pdf. The Supply Chain Resilience Guide provides Emergency Managers with recommendations on how to analyze supply chains and to work with the private sector to enhance supply chain resilience in support of Comprehensive Preparedness Guide (CPG) 101: Developing and Maintaining Emergency Operations Plans. This guide also identifies how the results of the supply chain resilience process can inform logistics planning.

Supply Chain Resources–Part 2

Massachusetts Institute of Technology (MIT) Center for Transportation and Logistics report, Resilience: Restoring business operations after a hurricane, available at https://ctl.mit.edu/sites/ctl.mit.edu/files/attachments/Supply Chain Resilience- Restoring Business Operations After a Hurricane_0.pdf. MIT's Humanitarian Response Lab at the Center for Transportation and Logistics (CTL) held a roundtable on supply chain resilience in the face of large-scale disasters. The roundtable and this report are aimed to catalyze more systematic research of the issues and opportunities revealed by shared discussion of how business and government support survivors and restore a disaster-impacted economy.
FEMA National Business Emergency Operations Center, available at https://www.fema.gov/nbeoc. FEMA's virtual clearing house for two-way information sharing between public and private sector stakeholders in preparing for, responding to, or recovering from disasters.
FEMA Business Continuity Planning Suite, available at https://www.ready.gov/business-continuity-planning-suite. Created for any business with the need to create, improve, or update its business continuity plan. The Suite is scalable for optimal use by organizations of any size.
FEMA National Integration Center (NIC) Technical Assistance (TA) Program, available at https://www.fema.gov/pdf/media/factsheets/2011/npd_ta_factsheet.pdf. NIC TA can assist jurisdictions with mapping supply chains and engaging with the private sector. Email: FEMA-TARequest@fema.dhs.gov

Further Learning Opportunities

Association of Supply Chain Management (ASCM), Certified Supply Chain Professional (CSCP) includes a learning system and certification exam, available at https://www.ascm.org/learning-development/certifications-credentials/cscp/. ASCM CSCP certification provides the knowledge to manage global supply chain efforts and improve day-to-day operations. There are separate fees for the study program and the exam.
Center for Homeland Defense and Security (CHDS), Supply Chain Resilience self-study course provides learners with a conceptual framing of supply chain behavior, risk, sources of resilience, and one method for self-assessing the risk and resilience of regional demand and supply networks, available at https://www.chds.us/selfstudy/courses/supply-chain-resilience/
Frederick (MD) Community College, Community Lifelines, Logistics, and Supply Chain Awareness course is a two-part introductory training course that integrates supply chain sustainment techniques within FEMA's Community Lifelines construct to prepare communities to rapidly resource essential supplies of food, water, and shelter during a disruption or disaster, available at https://frederick.augusoft.net/index.cfm?method=templates. CustomTemplatePreview&ContentID=322&utm_source= CEWD+ENewsletters&utm_campaign=7cc6460e48-2022.01.19.MACEM+ENews&utm_medium=email&utm_term=0_5eec75d962-7cc6460e48- Funded and certified by DHS/FEMA, this program is free to the public.
Massachusetts Institute of Technology (MIT) Center for Transportation and Logistics, MicroMasters Program in Supply Chain Management, available at https://micromasters.mit.edu/scm/. The MITx MicroMasters® program provides an end-to-end understanding of supply chain management. MIT offers the entire course free of charge. However, there is a course fee to receive a certificate of completion.

Lesson 5 Summary

By now, you should be able to:

Describe the objective of supply chain resilience initiatives
Describe the three categories of supply chain resilience policies
Describe methods for supply chain resilience analysis and enhancement

IS-0238 Course Conclusion: Video Transcript

Through this course, you’ve learned a lot about how supply chains work, but this only scratches the surface. Your next step is to develop a better understanding of the private sector supply chains that impact your jurisdictions.

We recommend you follow the Supply Chain Resilience Guide and start with one life-sustaining commodity or function, such as food, water, fuel or transportation, and map it out. Use the guide to help you identify key nodes, links, bottlenecks, and threats. Once you identify the private sector players that provide a Pareto Portion, or approximately 80% of the commodity in your jurisdiction, you can use the guide to help conduct outreach to these stakeholders. Next, you will want to conduct targeted engagements with these stakeholders to seek their buy in and input. Then, you will want to develop an action plan to address key vulnerabilities and risks. Once you have a plan, you are going to need to continuously assess and refine it. The key takeaway from this course is that as emergency managers, our goal is to shift the focus from pushing relief supplies to ensuring that regular supply chains are restored as rapidly as possible.

Remember to look, listen, collaborate, and facilitate.

Thank you for your attention.