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1 Introduction 1.1 STUDY MOTIVATION AND CHARGE TO THE COMMITTEE There are numerous goods and services that we all rely on daily and largely take for grantedâ food from the grocery store, clean water from the tap, gasoline at the pump, power and Internet for homes and businesses, and medicines at the pharmacy. These goods and services are readily available in modern life only because of the processes, systems, and dedicated professionals that keep supply chains flowing. Such systems can be disrupted for a variety of reasons, with extreme weather events such as hurricanes being one of the most disruptive threats. The three hurricanes that hit in the summer and fall of 2017âHarvey, Irma, and Mariaâwere each unique and record-setting in different ways. Harvey shattered records for the most rainfall from a tropical cyclone in the United States, inundating southeast Texas. Irma was the strongest Atlantic storm ever observed outside the Caribbean and Gulf of Mexico, and its path across Florida led to the largest hurricane evacuation in U.S. history. Maria was the strongest storm to hit Puerto Rico and the U.S. Virgin Islands in almost a century, causing devastation across the islands. Responding to any one of these storms individually would have required a massive effort, but the fact that they occurred in quick succession (and concurrently with major wildfire disasters in the western United States) tremendously stretched the capacity of the Federal Emergency Management Agency (FEMA) and other organizations to respond. They also strained the functioning of some supply chains that facilitate the flow of critical commodities and services to affected populations. FEMAâs latest strategic plan elaborates the agencyâs growing interest in helping to ensure that communities have robust, adaptable supply chains that can withstand the stresses of extreme weather events (FEMA, 2018b). Specifically, under the planâs Goal II (ready the nation for catastrophic disasters), Section 2.3 speaks directly to the issue of supply chain resilience: âPosture FEMA and the whole community to provide life-saving and life-sustaining commodities, equipment, and personnel from all available sourcesâ (p. 24). The subsequent discussion illustrates that FEMA is already aware of many critical aspects of supply chain resilience that need to be improved. But translating that general awareness into deep understanding of how to avoid future problems requires a careful examination of lessons learned during recent events. To aid this examination, FEMA turned to the National Academies of Sciences, Engineering, and Medicine to study the factors that affect private sector supply chains during hurricane events, to examine lessons learned on how private sector and government response plans and planning can best collaborate, and to help advance understanding of factors, such as: ï· the state and knowledge of pre-incident networks and capacity of critical supply chains, distribution systems, and infrastructure; ï· how these systems were affected by the storms, and how subsequent response actions produced further effects on network integrity and operations; PREPUBLICATION COPY 9
10 STRENGTHENING POST-HURRICANE SUPPLY CHAIN RESILIENCE ï· the network structures, linkages, and behaviors most adaptable to effective intervention; and ï· how supply chain systems can be strengthened in the short term to be efficient in day-to- day operations, and made adaptable to sustain integrated disaster and humanitarian supply chain operations during disasters, especially catastrophic events. This study was designed to address those needs and to respond to the specific Statement of Task, as shown in Box 1.1. While the primary audience for this study and for the recommendations offered herein is FEMA, some recommended strategies are of direct relevance to other stakeholders involved in building supply chain resilienceâincluding private sector entities involved in the production, distribution, and delivery of critical commodities; local and state emergency management agencies; and nongovernmental organizations and community and civic organizations.Â Â Box 1.1 Statement of Task A committee will conduct a study to document and understand the strengths and vulnerabilities of the supply chain networks in the four primary areas affected by Hurricanes Harvey, Irma, and Maria in 2017. The study will capture key lessons and observations concerning supply and distribution networks under strain during these hurricane events. These regions include Houston/Galveston, Texas (Harvey); Miami/Fort Lauderdale, Florida (Irma); Puerto Rico (Maria); and the U.S. Virgin Islands (Irma and Maria). The study will provide options and recommendations for the future swift and effective conveyance and distribution of essential supplies and commodities, and for the restoration of utilities, during disaster response and recovery operations. The work will focus on the conveyance of food, fuel, water, pharmaceutical supplies, and medical equipment. Considering tactical and operational priorities, the report should provide advice that is applicable to the private and public sectors. These recommendations will concentrate on the effective and efficient integration of capabilities and planning between the private sector and of government at all levels. The report will consider implications for supply chain resilience at the regional or national level and geographical and seasonal considerations. Specifically, the report will: 1. Discuss commonalities and differences in how supply chain systems were affected by Hurricanes Harvey, Irma, and Maria in the affected areas of Texas, Florida, Puerto Rico, and the U.S. Virgin Islands. 2. Identify and explain crucial interdependencies, supply chain nodes, and disruptions to supply chains in each of the impacted areas that affected response and recovery. 3. Present options and recommendations for future effective conveyance and distribution of food, fuel, medical supplies, water, and pharmaceuticals, as well as efficient restoration of utilities during disaster response and recovery operations. PREPUBLICATION COPY
CRITICAL CONCEPTS OF SUPPLY CHAIN FLOW AND RESILIENCE 11 This is a unique National Academies activity in that it was informed by two additional activities that provided data and analysis that contributed to the committeeâs understanding of the 2017 events, as outlined below. ï· The CNA Institute for Public Research, a non-profit organization providing research and analysis on policy issues important to the nation, was contracted to conduct background research, data collection, and interviews with key actors in the 2017 hurricanes in Texas, Florida, Puerto Rico, and the U.S. Virgin Islands (for example, interviewing FEMA logistics staff, private sector actors, local and state government emergency management decision makers); to gather information about supply chain function before, during, and after the hurricanes; and assess emergency management organizationsâ challenges and strengths. From this information, CNA developed a set of case studies reflecting key supply chain developments that unfolded in the impacted areas. This work was published by CNA in the report, Supply Chain Resilience and the 2017 Hurricane Season (Palin et. al, 2018), and it was shared in public sessions of the National Academies committee. This work is referenced throughout the report, and Appendix B offers more details about the CNA analyses. ï· The Massachusetts Institute of Technologyâs Center for Transportation and Logistics collected data and developed an advanced analytic tool to illustrate points/nodes in the supply chain that amplify or dampen cascading effects in order to aid analysis of supply chain network structure, linkages, and behaviors (based on actual response and recovery efforts) and to help develop options for strengthening supply chains in future hurricane seasons. The committee and the Massachusetts Institute of Technology investigators held periodic discussions throughout the study process, thus providing several opportunities for informing each otherâs thinking during their respective activities. 1.2 THE STUDY PROCESS For this study, the National Academies convened a committee with a diverse range of expertise and experience related to supply chains, emergency management, and disaster response. (For committee membersâ biographical information, see Appendix E.) Over the course of this study, the committee held six meetings that included open sessions to gather information and perspectives, and closed sessions to deliberate on key messages and work on crafting this report. Meetings were held in each of the locations specified in the committeeâs charge: Texas (Houston), Florida (Miami), Puerto Rico (San Juan), and U.S. Virgin Islands (St. Thomas). In each location, the committee met with an array of public officials and managers, including numerous FEMA officials, private sector stakeholders, and others involved in maintaining the functioning of supply chains before, during, and after the 2017 storms. In addition, the committee held two online sessions to gather additional information on select topics. This input was invaluable for informing deliberations and development of the report material. See Appendix A for a full list of the experts involved in these meetings. Meetings also included ongoing updates and discussion with representatives of the CNA and Massachusetts Institute of Technology activities described above, to foster iterative learning among those working on the different phases of this activity. PREPUBLICATION COPY
12 STRENGTHENING POST-HURRICANE SUPPLY CHAIN RESILIENCE Supply change management and resilience are themselves broad areas of study and practice, and it is beyond the scope of this study to provide a comprehensive review of the research literature associated with these fields. Rather, this study focused more specifically on learning from the practical experiences during Hurricanes Harvey, Irma, and Maria. The discussions and recommendations offered here are based largely on insights from the information provided at the committeeâs meetings, from the CNA analyses, from relevant government reports and media accounts about the 2017 events, and from the committeeâs professional insights, experiences, and collective judgment. 1.3 ORGANIZATION OF THE REPORT The major sections of this report are organized as follows. Chapter 2 provides an overview of some fundamental concepts related to supply chains in the context of hurricane preparation, response, and recovery. Chapter 3 provides a brief overview of how the three hurricanes unfolded in the four focal areas for this study; how the different âsupply chain geographiesâ of Texas, Florida, Puerto Rico, and the U.S. Virgin Islands affected vulnerability in each location; how the storms affected key supply chains in each place; and the common dynamics emerging in all the cases studied. Chapter 4 presents the committeeâs recommendations for advancing supply chain resilience and effective conveyance of critical relief supplies in the aftermath of a hurricane. The recommendations are aimed primarily at emergency management professionals, as opposed to the many (often volunteer-based) groups and individuals that may be involved in local-scale, immediate stages of emergency response. These emergency management professionals who can help ensure the resilience of critical supply chains in the face of disaster events are based not only in FEMA, but also in numerous state and local agencies, and private sector and non- governmental organizations. Chapter 5 discusses some of the important steps forward that FEMA and others are already making toward the resilience goals discussed in this report, as well as aspects of the broader policy landscape that may influence further advances. PREPUBLICATION COPY