How supply chain agility enables Red Cross hurricane operations
Imagine starting a $1M company on a day's notice
Most supply chain managers prepare for a hurricane by contacting backup suppliers, rerouting transportation routes, holding inbound shipments, installing flood barriers and stocking up on fuel for times of need. Despite the best preparations, however, backlogs are expected in the affected areas.
But as Hurricane Matthew ravaged the East Coast this weekend, leaving millions without power and a rising death toll, the American Red Cross was busy restocking local warehouses and transporting supplies to their relief shelters. The challenge, however, is that relief missions serve often unpredictable needs.
"See, that's the thing about the Red Cross relief operations, we never really know where we're going to go," William Malfara, American Red Cross's Senior Director of Disaster Services at the National Headquarters told Supply Chain Dive.
At moment's notice, the organization must be able to deploy hundreds of workers, secure warehouse space and safely transport millions of dollars of goods to affected areas.
To achieve this, the Red Cross relies heavily on supply chain management and a diverse, nationwide and charitable network of corporate partners. Any company can join this network.
Supply Chain Dive has put together various ways to help in the logistics of relief:
- Extra warehouse space? Hold outbound shipments to the affected region, or donate storage to affected businesses until they normalize operations.
- Ship material donations like shelf-stable food, tools, or bulk household goods to relief agencies.
- The Red Cross often needs suppliers or donors.
The logistics of relief
Relief operations occur in three stages — disaster preparedness, response and recovery — but in each of these agility is vital for ensuring the Red Cross operation succeeds, given the constrained timelines for action.
"It's almost like someone saying to a company: Well, tomorrow you're going to set up a multi-million-dollar business with all the components of the business, but we're not going to tell you where, we'll tell you where tomorrow," said Malfara.
"That's pretty much what we do when we respond to major relief operations, specially the ones that are no-notice," he added noting hurricanes at least provide a few days to prepare for disaster, compared to earthquakes, terror attacks or flash floods.
The Red Cross' model can be compared to today's e-commerce giants, which focus on delivering service quickly and directly to the source of demand.
The organization boasts five massive distribution centers nationwide, an array of partners for logistics support and a systemized process for opening new, smaller, temporary hubs to service regions of high-demand.
"When there is a disaster we get a hold of our local real estate and our real estate group and we will lease warehouse space, or someone will donate warehouse space to us, because we use it on a temporary basis," he said. "Once the emergency is over and the disaster is responded to, then we will leave the community except for our region which remains in the community."
In the case of Matthew, the Atlanta Disaster Field Supply Center — one of the five — served as the hub for the various other warehouses in the region, fielding inbound and outbound shipments of cots, cleaning kits, comfort kits and food for the entire region.
But, as supply chain managers will relate to, sometimes the need is higher than the available inventory.
About a week prior to the hurricane, Malfara told Supply Chain Dive the company began to run forecasts on the needs of potentially affected regions in order to coordinate shipments to replenish Atlanta's low-stock items.
The Red Cross uses Oracle's SharePoint system to manage the orders and has contracts with 3PLs from Ryder to Estes to ensure transport across the five large distribution hubs — in Georgia, Pennsylvania, Texas, Missouri and Nevada — and the 61 distinct regions. Meanwhile, CISCO handles the organization’s food logistics.
Yet, due to this year’s floods in Louisiana and Texas, Malfara noted they were running low on cleaning kits. As a result, the Red Cross asked the vendor to ramp up production while channeling other locations’ supplies to Dallas, then to Atlanta for eventual use in the region.
"We ramp up for these major relief operations with the full backing of the organization," Malfara added, noting the association employs a 24-hour hub-to-operation-site benchmark for shipments.
After the hurricane
Neither the effects on the supply chain nor the logistics needs end with the passing of the hurricane, though.
"Often times the relief operations last long after the news media goes home," according to Malfara. The Louisiana floods in August, for example, have lasted more than two months and cost the Red Cross upwards of $20 million.
"The last [large operation] was Hurricane Sandy that started in October and lasted well until April," he added. "The recovery phase, it takes a while."
In addition to the property damage caused by floods, leaks and dangerously high winds, power outages and damaged infrastructure can lead many businesses and people without access to potable water, gas, power or food.
"The people in the affected area whether they were personally affected or not, the supply chain in their area was affected," according to A Duie Pyle COO Randy Swart, whose trucking company witnessed the effects of Hurricane Sandy in the northeast.
"If you have a truck out that has 15 deliveries on it and the first two can’t take their freight, that means the other 13 can’t take their freight either," he noted. Power outages and fuel shortages continued to plague businesses long after the flooding had subsided, creating a backlog for many carriers.
But non-affected companies can do a lot to help facilitate their neighbors’ recoveries or provide them with relief, says Swart.
In the short-term, a willingness to hold inventory and lease space could help ease the concerns of various companies which were tragically affected.
"We had quite a few businesses that accepted freight for other businesses that were either damaged or had flooding in their dock bays," he said.
Other strategies included designating locations to drop off empty trailers so they did not take up space at the dock bay, contacting the shipper in advance to ask them to hold outbound shipments, or sending goods back to the shipper for safekeeping until the client was ready to receive it.
"Communication, if they know freight is coming to them, communication with the carrier is really the key," he added. "The carrier can do just about anything if they know."
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