On August 29, 2005, Hurricane Katrina devastated New Orleans and the Gulf coast. Proctor & Gamble coffee manufacturing, with brands such as Folgers that get over half of their supply from sites in New Orleans, was severely impacted by the hurricane. Six months later, there were, as a P&G executive told the New York Times "still holes on the shelves" where P&G's brands should be. Given your new insights from supply chain management: How would you solve/avoid a situation like this?
The goal in supply chain management is to integrate suppliers, warehouses, manufacturers, and sales, so that the products are manufactured and delivered in appropriate quantities, at the right time, to the stores that need them. By doing so, costs can be reduced and efficiency increased. An emergency such as Katrina presents a unique challenge due to the sudden loss of products, warehousing ability and manufacturing ability.
In order to respond to emergencies like Katrina, a company should have an emergency plan in place. Recognizing that the site is in a catastrophe zone can help in determining the type of preparedness needed.
This crisis management plan should include:
- A hotline for employees to verify their safety.
This solution discusses supply chain management with regards to disasters.