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Keeping Shipping Afloat

250,000+ workers stranded at sea

250,000 seafarers are stuck at sea at increasing risk of physical and mental exhaustion. The numbers are staggering and growing. Here’s a brief rundown of the exposure.

Supply Chain Risk Grows as Weary Crews Halt Ships and Clog Ports. CLICK HERE =>. Bloomberg

The Global Supply Chain’s Stranded Workers, by the Numbers

The pandemic has left merchant sailors stuck at sea for months longer than they anticipated. CLICK HERE => Marker

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Hurricane Ivan: Gaining Strength from a Devastating Event

Excerpt from Gary S. Lynch, “At Your Own Risk: How the Risk-Conscious Culture Meets the Challenge of Business Change”, John Wiley & Sons, Chapter 6, Page 145-150.

What is a risk conscious culture and how does an organization go about establishing one? I begin our discussion with a real life story of how the actions by a group of business leaders, post a tragic event, created a ‘‘best practice’’ of how to build a risk conscious culture. At a tactical level, these leaders improved their disaster preparedness. However, the benefits went far beyond developing just a process. What occurred instead was a conta- gious awareness of the risks and appreciation of how it affects others.

The incident was a category three hurricane named Ivan, and the place was the Cayman Islands (the fifth largest banking center in the world). Ivan damaged more than 95% of the buildings1 and disrupted essential value chains such as food, water, shelter, supplies, communications, and energy and it’s core revenue generator—financial services processing. Everyone on the island had been affected both behaviorally and financially. However, after it was all over, the impact of Ivan then became the genesis for another great phenomenon. A risk conscious culture emerged born from the desire by the business leaders to proactively, rather than reactively, manage risk. In all my years working for/with hundreds of organizations, I had never witnessed such an example as the one I was exposed to in the Caymans. I have a profound respect for Gene Thompson and Paul Marchena for bringing together a set of diverse leaders for the purpose of learning and addressing those vulnerabilities that they could do something about. The result was improved preparedness, greater resiliency, increased participation by a much broader community of stakeholders, more effective alignment of risk investment with business priorities and most importantly—a risk con- scious, sensitive and responsive community of business leaders.

Several months after the devastating category-three Hurricane Ivan, a community of business and social leaders came together in what was originally a post-mortem meeting. Their individual frustrations motivated them to engage in a conversation about the economic and social impact of Ivan, and what could be done differently next time to reduce the exposure. After three meetings it was clear that the theme had shifted from a limited view of their own businesses to one of a communal economy. They recognized the need to begin a dialogue about risk issues long before an event could occur (e.g. hurricane, pandemic or other natural disasters). They realized that they had a symbiotic relationship, which had advantages and disadvantages.

With the help of Gene and Paul, the group rallied another dozen or so leaders to the first meeting. Prior to the group getting together, Gene requested that I survey some of the Executives in order to identify what worked, didn’t work, what close calls were avoided, and what their individual priorities were. What I discovered was that communication be- tween the government and business was a major issue, as well as between the business leaders, the general community and their international customers. I also found that the leaders behaved as if the storm only affected them, instead of harnessing the power of the interdependent community.

My assignment was to lead the research and facilitate the sessions. The leaders demanded action and they got it, a risk consciousness amongst the group emerged. They inventoried their competencies and capabilities, and then began to determine how they can benefit from each other. For example, satellite phones were made available so that the Executives could stay in touch with each other and their overseas customers, high ground was allo- cated for the storage of critical vehicles, special fuel delivery was pre-arranged, pre-arranged delivery of lumber was offered to critical sites, a web site was created, employees became more involved in the preparation, heavy duty transportation vehicles were identified, and emergency response procedures were shared. The group went as far as building a bunker so the leadership team did not have to evacuate the island during a crisis. When Hurricane Dean hit in 2007 these new capabilities were activated. Fortunately, the storm took a southerly turn and spared the island. Regardless, they were ready to manage the worst possible outcome. From my home in New Jersey I was able to watch the action first-hand via the security cameras mounted on one of the participant’s buildings in the Cay- mans. Remote monitoring was one of many improvements that was implemented and activated. The leaders listened to each other, understood the collective needs and

then agreed to who would contribute what to ensure economic and social resiliency. Fortunately, the CEOs and other Senior Leaders at the Thompson Development Group, Hurley’s Groups of Companies, Cayman Water Company, Cayman Utilities, Workplace Environments, A.L. Thompson’s, Brown’s Mobile Fueling, Fosters Food Fair Supermarkets, Marsh, and others have taken action and benefited from the lessons of Hurricane Ivan (ironically, the storm first made land on September 11, 2004). They are proactively managing risk both individually and as a community.

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COVID-19: A Major Review of How to Protect the Entire Pharma Supply Chain.

I was honored to contribute! Congratulations to Dr Nicola Davies for bringing together a multidisciplinary report entitled COVID-19: A Major Review of How to Protect the Entire Pharma Supply Chain.

This is such an important and timely body of research. I strongly recommend picking up the report but only if you are seeking practical, action oriented advice. Stay safe!

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MANAGING RISK: Diversifying the Supply Chain (or hedging against political risk)?

TSMC Plans to Build and Operate an Advanced Semiconductor Fab in Arizona (U.S.)

Are organizations starting to reduce geopolitical exposure by diversifying their supply chains? The TSMC announcement to build and operate a semiconductor facility in Arizona represents not only a multi-billion dollar investment but also potentially an enormous reduction in risk. The majority of TSMC fabs are located in a few small regions in Taiwan. These multi-billion fabs currently face significant earthquake and typhoon risk. However, political and pandemic exposure has been exponentially increasing in the region, and organizations are being forced to rethink their supply chain strategy and design. Businesses in Hong Kong face a similar growing threat as well (note: much of the system level testing occurs before being shipped to mainland China for assembly). Will businesses in these regions be the first to reconfigure their global supply chains with risk and performance simultaneously optimized? Stay tuned! I expect to see more organizations seek to diversify critical nodes in their supply chains (i.e., despite the headlines, I don’t believe we will see organizations immediately abandon geopolitical hot spots).

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Major Earthquake Strikes Nevada – Spares Reno This Time


A 6.5 magnitude earthquake struck the Reno, Nevada area at 5:30 am on the 15th of May 2020. Have you checked your supply chain? Is this event relevant to your business and could it impact profitability? For example, do you rely on a major drug wholesaler whose warehouse and transportation networks are in the area? At approximately $2-5 an hour, is event monitoring software worth the cost? Are you able to detect a potential disruption in near real-time? Do you know how and where it will impact your supply chain? Are you able to quantify the potential impact to customers in near real-time? Are you ready to capture the UNCERTAINTY ADVANTAGE? How does the earthquake in Nevada (or an infinite number of events) affect fill rates, supply chain, product, and material inventory?  

There are more than a dozen supply chain event monitoring products in the market #resilinc#riskmethods), all can be implemented in days by you, the supplier, or by a 3rd party such as The Risk Project. Worth the investment?

UPDATE 18 May 2020: It appears Reno and the surrounding businesses dodged a bullet. Click here to see what might happen if a quake struck Reno.