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Climate related hazards: Is your business at risk?

Wednesday, June 18, 2014 11:03 AM | Deleted user

Paul Douglas, founder and senior meteorologist at Media Logic Group, recently discussed our extreme weather at the Secure360 Conference, sharing about how weather is getting even more extreme over time. The warm weather El Nino is expected to bring this summer will also be affecting, and likely increasing, chances for tropical storms. The Atlantic hurricane season is already here. You might think that in Minnesota, hurricanes won’t affect your business, but if hurricanes affect your supply chain, they could affect you a lot.

An earthquake and tsunami in Japan can affect worldwide pricing and distribution of certain parts or materials including cars, cameras and computer components.

According to Douglas, climate certainly is affecting weather related disasters: wildfires are getting larger and causing more damage, hurricanes are increasing in intensity, average storms are causing more damage, heat waves are becoming more widespread, draughts are causing widespread damage to farms and businesses and precipitation is being concentrated into more extreme events that can lead to flooding. All of these weather-related disasters have the potential to affect your business, and you need to protect yourself against them.

Identifying risks

Understanding and identifying the weather risks that potentially affect your business is the first step to mitigating their risk and preparing to prevent or manage them. Oftentimes, preventing a climate-related hazard is going to be extremely difficult, but understanding how a hurricane in Florida or flood in Colorado will affect you and your suppliers will help you prepare your business for those events.

Mitigating risks

To identify, understand and mitigate risks to your supply chain, there are a few steps you can take:

  • Create a team to identify risks that includes partners from your suppliers to identify contingency situations.
  • Build a flexible supply chain; think about alternative transportation options for your most important links and keep your eye on alternative suppliers.
  • Be prepared to act quickly if a change needs to be made in your supply chain; get preapproval for necessary changes and keep everyone informed about your plan.
  • Update your plan regularly to ensure it’s still the best option and all alternatives remain viable.

We’re living in a global economy and sever weather anywhere on the planet can have far-reaching affects, even if your business never sees the dark clouds coming. Weather can be extreme; we can’t control it, so prepare your business for it.

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