Freight Transportation Resilience in Response to Supply Chain Disruptions (2019)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

149 every 3 to 5 years). Monitor the performance of your organization in response to incidents and examine how the organization’ processes could better handle response and recovery efforts in the future. Examine the remaining steps in the self-assessment framework and determine where value-added efforts need to be made to enhance supply chain resilience. STEP 4: UNDERSTAND HAZARDS AND THREATS AND THEIR IMPACTS/CONSEQUENCES Yes, we should do this Your organization needs a better strategy ….. Conduct a comprehensive study of the potential hazards and threats (or review those that have been done by others in your market/service area) that will result in disruptions to the supply chain/transportation system and the implications to your organization's preparation, response and recovery efforts and other business operations. This might entail bringing in outside experts to brief key staff on future expected threats (e.g., extreme weather) or partnering with state or local agencies (such as universities). Identify organizational strategies for disruptions of different types and different lengths. For example, what will your organization do for a short disruption having very localized impacts versus a disruption that will last for weeks and affect a much larger area? What will your organization do if power is out for a week or more (and restoring power to your service is not the top priority of the power company given widespread public health and safety needs)? Examine your supply chain/markets/transportation system to identify possible vulnerabilities and risks to your networks and systems. To what extent does your organization have control over these vulnerabilities? What other infrastructure networks or systems does your infrastructure or service rely on that if disrupted would affect your organization’s operations, e.g.., the cascading effects of the electric power grid going down? Make systematic and structured efforts to identify where network redundancy does NOT exist in your network such that disruptions in these network segments will likely have more significant impacts on the users of your system/service. Identify the most critical facilities, assets, intermodal connections, movements and/or corridors under your organization's control that require greater attention with respect to system vulnerability. Examine expected economic and financial costs associated with a transportation system disruption, and strategies that can reduce financial and market loss. Examine the impacts of different types of disruptions to your work force and identify strategies for supporting employees during times of stress. Participate in a group (multi-stakeholder) exercise to identify the types of potential disruptions to the supply chain/transportation system and the resulting impacts. Include different system users in pre-disruption planning to understand their needs during a system disruption. Understand the needs of impacted communities and possible organizational strategies for responding. Conduct an assessment of the training and professional development needs for different types of hazards and threats of the staff responsible for enhancing supply chain/transportation system resilience. Examine what peer organizations are doing to identify best practice in identifying threats and hazards and their relationship to supply chain/system management efforts.

150 Your organization is well-positioned, but ….. Based on the self-assessment, create a management responsibility for improving your organization’s current approach to identifying threats and hazards and the consequences to organization practices. If necessary or desired, bring in a third party to identify possible strategies for enhancing your organization’s planning and threat awareness efforts. Modify your processes and procedures for identifying threats and hazards after incidents based on lessons learned or from incidents that happened elsewhere but whose impacts and consequences are known. Keep up to date on the latest information regarding transportation system threats and on strategies being applied to lower risks. Update your organization’s training programs to reflect new threats and hazards that might affect the resilience of the supply chain/transportation system. Your organization has done a good job …. efforts should be made to maintain or enhance these efforts …. Reassess (internally and/or with outside participants) on a periodic basis your organization’s threat assessment relating to enhancing supply chain resilience (perhaps conduct a threat assessment with supply chain partners on a periodic basis). Monitor the performance of your organization in response to incidents and examine what was new about the incident profile that needs to be incorporated into better response and recovery efforts in the future. Examine the remaining steps in the self-assessment framework and determine where value-added efforts need to be made to enhance supply chain resilience. STEPS 5/6: DEVELOP AND IMPLEMENT STRATEGIES, ACTIONS AND PLANS Yes, we should do this Your organization needs a better strategy ….. Examine prior steps to determine which recommended actions or strategies are most critical to make your supply chain/transportation system/organization more resilient…develop a strategy for implementing these key actions. If you do not have one, develop a continuity of operations/business continuity plan. If you have one and it needs updating (every 3 years or earlier if experience with disruptions suggests changes in the existing plan), update the plan. Develop longer-term market strategies/scenarios for events that result in more fundamental consequences to the organization’s position in the market or for survivability. These might include:  Creating redundant command and control centers  Stockpiling materials or other resources that allow for more expeditious recovery  Diversifying the suppliers of key resources (such as identifying local sourcing of key materials)  Creating alliances with (perhaps competing) organizations to provide alternative services when disaster strikes  Negotiating contracts before disruptions with those who might be called upon in emergency response.  Jointly developing capacity redundancy in the network with other organizations/agencies that can be used during disruptions  Developing contingency decision-making channels in the event of disrupted communications For the different types of strategies/scenarios examined above, understand and analyze the

151 institutional and regulatory challenges of implementing this strategy beforehand (in other words, do not wait until you try to implement the strategy before you run into regulatory barriers). For example, what are the impacts of the Jones Act, customs procedures, business confidentiality requirements if foreign flagged ships are diverted to another port to unload cargo due to major disruptions at the original destination port?. Prioritize and implement the strategic and systems planning approaches for the physical infrastructure and service operations identified in Step 3. Prioritize and implement the project planning protocols/design criteria identified in Step 3. Prioritize and implement the operations protocols/standards identified in Step 3. Prioritize and implement the maintenance protocols/standards identified in Step 3. Prioritize and implement the emergency/incident response protocols/standards identified in Step 3. For key bottleneck/choke points in your supply chain or network that will become even more congested if disrupted, create location-specific preplanned recovery strategies and plans in coordination with relevant agencies (e.g., designated alternate truck routes that will be automatically conveyed to truckers via a DOT’s traffic operations control center. Direct responsible staff for implementing resilience strategies, actions or plans to examine where in the implementation process improvements can be made to improve strategy/action delivery. Examine what your peer organizations are doing with respect to enhancing system resilience and implement strategies and actions from their experience that are most appropriate for your circumstances. Your organization is well-positioned, but ….. Based on the self-assessment of your organization’s capacity to implement resilience strategies and actions, assign management responsibility for implementing the priority recommendations that have yet to be acted upon. Your organization has done a good job …. efforts should be made to maintain or enhance these efforts …. Reassess (internally and/or with outside participants) on a periodic basis your organization’s capital program and network operations strategy to determine if the recommended actions are still important for enhancing supply chain resilience. Monitor the performance of your organization in response to incidents and examine what was new about the incident profile that needs to be incorporated into better designs and operations strategies for response and recovery efforts in the future. Examine the remaining step in the self-assessment framework and determine where value-added efforts need to be made to enhance supply chain resilience.

152 STEP 7: MONITOR PERFORMANCE AND INCORPORATE INTO CURRENT PRACTICE Yes, we should do this Your organization needs a better strategy ….. Develop and use system metrics to monitor the resilience of the supply/chain transportation system (outcome measures) for short-term actions (e.g., incident/emergency response) Develop and use system metrics to monitor the resilience of the supply/chain transportation system (outcome measures) for long-term actions (e.g., reliability measures for roads or rail corridors). Monitor agency actions with respect to system resilience (output measures) (e.g., number of road- or track miles upgraded to a state-of-good-repair). Discuss with key stakeholders (e.g., key customers or partner agencies) which performance characteristics of your system/service are most important to them with respect to their own business/operations (e.g., expected reliability of product delivery or use of your transportation system such as the availability of evacuation routes). Monitor performance measures of other agencies or systems (or trends over time) as part your own efforts (e.g., monitoring congestion levels on the road network provided by state transportation agencies). Participate with other organizations to help in their efforts to develop system performance measures to ensure that supply chain resilience is considered in their system monitoring (e.g., with state DOTs or metropolitan planning organizations). Periodically examine long-term trends in your supply chain/transportation system performance metrics to determine overall progress toward a more resilient system. Your organization is well-positioned, but ….. Based on the self-assessment, create a management responsibility for improving your organization’s current approach to monitoring system resilience. If necessary or desired, bring in a third party to identify possible strategies for enhancing your organization’s monitoring efforts. Modify your system monitoring to reflect new system characteristics or trends that are going to affect the overall resilience of the system. Your organization has done a good job …. efforts should be made to maintain or enhance these efforts …. Reassess (internally and/or with outside participants) on a periodic basis your organization’s system monitoring relating to enhancing supply chain/transportation system resilience. Monitor the performance of your organization in response to incidents and examine what was new about the incident profile that needs to be incorporated into better system monitoring efforts in the future.

153 BRINGING IT TOGETHER The work up to this point in the self-assessment process must be captured for ACTION to motivate the short- and long-term enhancement of supply chain resilience. This action could be focused on how to improve how an organization is operating in any one step in the framework, OR it can be used to assess the overall performance of the organization in all aspects of enhancing supply chain/transportation system resilience. In this latter case, one could develop an overall score for the organization by simply summing the scores obtained for each step and comparing it to the following assessment scale. Step Maximum Points Score Need to Focus On This Step 1: Organize for Success 10 Step 2: Develop a Communications/Information Exchange Strategy 10 Step 3: Assess Current Practice 10 Step 4: Understand Hazards and Threats and Their Impacts/Consequences 10 Step 5: Develop Strategies, Actions and Plans 10 Step 6: Implement Strategies and Actions 10 Step 7: Monitor Performance and Incorporate into Assessing Current Practice 6 Score Organizational Assessment 53 – 66 Your organization is well-organized to provide more resilient supply chains, and should examine current processes and procedures to maintain or enhance efforts 33 – 52 Your organization is well-positioned to be better prepared to enhance the resilience of supply chains; additional steps are necessary to enhance organizational capacity. 10 0 - 32 Your organization needs new or enhanced organizational capacity to improve supply chain resilience An example…. Suppose a user of the guidance scored her organization in the following way: Step Maximum Points Score Need to Focus On This Step 1: Organize for Success 10 9 Step 2: Develop a Communications/Information Exchange Strategy 10 8 Step 3: Assess Current Practice 10 6 Step 4: Understand Hazards and Threats and Their Impacts/Consequences 10 3 X Step 5: Develop Strategies, Actions and Plans 10 8 Step 6: Implement Strategies and Actions 10 7 Step 7: Monitor Performance and Incorporate into Assessing Current Practice 6 2 X Total 66 43 From the assessment, it has been decided to focus on two areas—Steps 4 and 7—to improve the organization’s efforts at enhancing supply chain resilience (note that a third-party observer of this assessment might question how the organization has a high score on developing strategies, actions and plans without doing a good job of understanding hazards and threats. A likely explanation is the person doing the assessment is focused on incident response.

154 Given these two focus areas, the guidance user can then use the respective strategy table to identify what the organization can do better. As an example, for Step 4: Understanding Hazards and Threats, the guidance user filled out the strategy chart as follows: STEP 4: UNDERSTAND HAZARDS AND THREATS AND THEIR IMPACTS/CONSEQUENCES Yes, we should do this Your organization needs a better strategy ….. Conduct a comprehensive study of the potential hazards and threats (or review those that have been done by others in your market/service area) that will result in disruptions to the supply chain/transportation system and the implications to your organization's preparation, response and recovery efforts and other business operations. This might entail bringing in outside experts to brief key staff on future expected threats (e.g., extreme weather) or partnering with state or local agencies (such as universities). Identify organizational strategies for disruptions of different types and different lengths. For example, what will your organization do for a short disruption having very localized impacts versus a disruption that will last for weeks and affect a much larger area? What will your organization do if power is out for a week or more (and restoring power to your service is not the top priority of the power company given widespread public health and safety needs)? Examine your supply chain/markets/transportation system to identify possible vulnerabilities and risks to your networks and systems. To what extent does your organization have control over these vulnerabilities? What other infrastructure networks or systems does your infrastructure or service rely on that if disrupted would affect your organization’s operations, e.g.., the cascading effects of the electric power grid going down? X Make systematic and structured efforts to identify where network redundancy does NOT exist in your network such that disruptions in these network segments will likely have more significant impacts on the users of your system/service. Identify the most critical facilities, assets, intermodal connections, movements and/or corridors under your organization's control that require greater attention with respect to system vulnerability. X Examine expected economic and financial costs associated with a transportation system disruption, and strategies that can reduce financial and market loss. Examine the impacts of different types of disruptions to your work force and identify strategies for supporting employees during times of stress. Participate in a group (multi-stakeholder) exercise to identify the types of potential disruptions to the supply chain/transportation system and the resulting impacts. Include different system users in pre-disruption planning to understand their needs during a system disruption. X Understand the needs of impacted communities and possible organizational strategies for responding. X Conduct an assessment of the training and professional development needs for different types of hazards and threats of the staff responsible for enhancing supply chain/transportation system resilience. Examine what peer organizations are doing to identify best practice in identifying threats and hazards and their relationship to supply chain/system management efforts. Your organization is well-positioned, but ….. Based on the self-assessment, create a management responsibility for improving your organization’s current approach to identifying threats and hazards and the consequences to organization practices. If necessary or desired, bring in a third party to identify possible strategies for enhancing your X