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75 CHAPTER 6: GUIDANCE FOR STAKEHOLDER MITIGATION AND ADAPTATION OF SUPPLY CHAINS TO DISRUPTION Based on the results of the case studies and interviews, a guidance document was developed on mitigating and adapting supply chains to disruptions. The guidance document is intended for the varied stakeholders in the supply chain, for different types of supply chains, and for various types of disruptions. The guidance is also based on the key components of a response to a disruption, who is involved and what are the characteristics of the disruption that might be of most concern to the user of the guidance document. Although there are many characteristics of a disruption that can affect the nature of a response (and indeed who responds), the guidance is based on the view that the primary factor in determining mitigation strategies is how long the disruption and associated consequences will last. A short-term incident (such as an hour- or day-long closure of a key facility) will most likely involve the emergency response units of the involved organizations. A disruption and related consequences that last much longer could require a more involved response, such as implementing business continuity plans or recovery plans for public agencies. The guidance is provided as a stand-alone document and is thus not repeated here. However, some of the key characteristics of this guidance are provided below to better understand how the guidance contributes to our understanding of supply chain resilience. The purpose of this guidance is to recommend actions to key public and private stakeholders in the supply chain to mitigate and adapt to logistical disruptions with the overall aim of enhancing freight transportation system resilience. The target audiences include freight carriers and shippers, state transportation agencies, MPOs, freight advisory councils and other organizations interested in a resilient, sustainable and robust multimodal freight transportation system. An important characteristic of the supply chain and one explicitly considered in the guidance is the distinction between public agency and private company roles. These can be distinguished between incident-level responsibilities and planning-level efforts. The guidance is based on the seven steps shown in Figure 5. Step 1: Organize for Success â Identify responsibilities for improving supply chain resilience or the components of the transportation system for which your agency/firm is responsible. Establish organizational mechanisms and institutional relationships that will serve as the foundational partnerships as you move forward with the process. If necessary, institutionalize these partnerships with formal agreements, protocols or understandings (these most often emphasize who is responsible for what). Ensure that those responsible are supported by leadership and have enough resources to succeed. Step 2: Develop a Communications/Information Exchange Strategy â Think about the information channels that need to be established for this effort to be successful. Who are the key participants? How best to reach out and engage them in the process? Develop or enhance current communication strategies both during the resilience planning process and during emergency response efforts. Understand what types of information support and types of data will be necessary to support and maintain the resilience planning process. Step 3: Assess Current Practice â Focus on what you and your partners are currently doing with respect to infrastructure provision and system operations. Are you designing key infrastructure with resilience in mind? Has your continuity of operations plan been updated recently? Does your staff have the knowledge, expertise and resources to promote resilience in supply chains?
76 Step 3: Assess current practice Step 1:Organize for success Step 2: Develop a communications strategy/plan Identify âearly winsâ Step 4: Understand the hazards and threats Enhance emergency response capabilities Prioritize detailed assessments Undertake detailed assessments Step 6: Implement Strategies and Actions Ste;p 7: Monitor system Performance SystemÂ Operations CapitalÂ Improvements Step 5: Develop Strategies/Actions Figure 5: Resilient Supply Chain Assessment Process Step 4: Understand Hazards and Threats and Their Impacts/Consequences â This step is perhaps one of the most critical in that enhancing supply chain resilience depends on the type and nature of the expected disruptions. This assessment could be comprehensive by looking at all the types of threats and impacts that might be faced, or it could focus on the one or two threats expected to be most likely or most impactful. This step will also vary by the level of detail desired, the degree to which other background information is already available from other sources (e.g., future flooding locations from already-conducted adaptation studies), and the amount of resources (both funding and human expertise) available to conduct this assessment. Step 5: Develop Strategies, Actions and Plans â Based on the assessment from Step 4, collaboratively identify strategies, actions and plans that can be put in place to improve supply chain resilience. These actions could focus on issues internal to your organization or on improving the relationships among key participants in the supply chain. The breadth of actions is quite broad, ranging from actual infrastructure changes, changes to standard operating procedures, enhancements to existing institutional relationships, training for staff and so forth. This step also includes identifying "early wins", which is designed to establish credibility in the process by identifying actions/strategies/ projects that can be implemented in the short term (and hopefully without much financial support). This could include physical changes to projects already in the development stage, changes in protocols, changes to emergency response/operational strategies, or training opportunities for staff. Step 6: Implement Strategies and Actions â This step includes identifying which of the strategies and actions from Step 5 should proceed to implementation based on organizational capabilities and resources, and which of these
77 actions will have to be implemented later. Implementation plans would include those actions that can be taken solely by one agency, and those that will require joint efforts, and if so, how the responsibilities will be divided among those involved. Step 7: Monitor Performance and Incorporate into Assessing Current Practice â Provide feedback into the planning process as well as to the responses to disruptions when they occur. Based on actual experience with disruptions, what should be done differently to enhance supply chain resilience in the future? How can operations be improved as well as how infrastructure is provided? Several observations on this process merit special attention: ï· This process can be used by a single agency or organization, or it could be conducted jointly with many others. For example, in the context of making the supply chain more resilient, there are steps in the process that would greatly benefit from collaboration among the different participants in the supply chain. These include understanding what the hazards/threats and the likely impacts/consequences will be; developing strategies/actions/plans in response; implementing strategies and actions; and monitor the performance of disruption response to disruptions and learning from this experience. ï· This process, however, does recognize that it will often be difficult to engage many of the supply chain participants throughout the process, in particular firms and companies that provide the transportation, logistical and shipping services. Thus, part of the process of thinking through how to enhance supply chain resilience includes identifying the steps where such engagement is critical and be perceived as meaningful by these participants; and then encouraging such involvement. ï· Part of Step 5 includes "Identify Early Wins," which is aimed at not only implementing actions that will improve the resilience of the supply chain, but also actions that are intended to establish credibility in the process (in other words, participating in the process results in progress, particularly important for private sector participation). ï· The process includes resilience strategies aimed at improving both the operations/emergency response capabilities of the involved parties, as well as improvements to physical infrastructure that would protect from, or minimize damage caused by, future disruptions. Step 8, monitoring performance and incorporating the results into assessing current practice, thus examines how agencies and firms responded to disruptions as well as how infrastructure strategies and designs resulted in improved resilience. ï· As noted throughout the guidance, the efforts to increase the resilience of the supply chain to hazards and threats will depend on the type of threat, and the expected magnitude and scope of the impacts. The process outlined in Figure 5 is not intended to provide guidance on every possible combination of hazards, threats, impacts, consequences and participants. However, it is intended to portray a way of thinking about the steps necessary to protect the supply chain and promote a more resilient performance. The guidance then provides more detailed information on each step of the resilience assessment process. The format for the guidance is a series of questions that form the basis for establishing a capability in each step. The questions can be organized into a scoring system if so desired to provide a sense of how many of the characteristics of good practice are present in your current process (like what is done with capacity maturity models). At the very least, the questions serve as a guide on what types of information and actions would lead to a more resilient supply chain. A final chapter presents this guidance in a more hierarchical manner that allows user of the guidance to determine what types of strategies for enhancing supply chain resilience are appropriate for different circumstances.