It probably wasn’t a good idea to read the new “National Climate Assessment” on a rainy day. The new normal for the Midwest will bring extreme heat, heavy downpours and flooding. Then again, in years to come, the Northeast can expect heat waves, heavy downpours and a sea level rise. The Northwest won’t have it much better, with a sea level rise, erosion and increasing wildfires. Finally, the Southwest—with its increased warming, drought and insect outbreaks—will see a growing number of, and severity of, wildfires. That’s all just, well, terrific.
I saw the impact of the Colorado wildfires last year on highways, transportation and the supply chain, but the part of the climate assessment that most caught my attention was the U.S. researchers’ focus on rain. They wrote that large increases in heavy precipitation have occurred in the Northeast, Midwest and Great Plains, where heavy downpours have frequently led to runoff that exceeded the capacity of storm drains and levees, and caused flooding events and accelerated erosion.
Interestingly, this report came out the week after serious flooding in Florida and Alabama. As NPR reported, nearly 2 feet of rain fell on the Florida Panhandle and Alabama coast in the span of about 24 hours earlier this month. The flooding caused the states to close highways, stranding motorists.
That event reminded me of heavy rain in Tennessee in 2010, which produced flooding that ultimately closed I-24, a major route used to transport goods from the south to northern states, and vice versa. Then last year, seven inches of rain fell on Chicago overnight, leading to flooding that ultimately closed all highways and interstates around the city, and swamped homes as well as businesses, warehouses and distribution centers.
Unfortunately, it seems significant rains and resultant flooding that causes supply chain disruptions are expected to become regular occurrences. The problem is that global warming has warming has, on average, put more than a trillion gallons of extra water into the air over the contiguous 48 states, probably closer to two trillion gallons, say Kevin E. Trenberth at the National Center for Atmospheric Research and David R. Easterling at the National Oceanic and Atmospheric Administration, in a recent New York Times article. That extra water has to fall as rain or snow.
Consequently, “It rains harder than it used to,” says Dr. Trenberth, who added, “When it rains, it pours,” in the article.
With these types of weather events expected to happen with greater frequency, companies may wish to revisit initiatives to review how suppliers may be effected by flooding, and how the supply chain would be disrupted if major highways are closed. It would increase their ability to mitigate risks before they develop and, perhaps, lead to creating plans to react quickly and flexibly in the event of such disruptions.
One problem, however, is that only about one in six Global 2000 companies apply sourcing solutions specifically to their risk management programs, writes Matt McGovern, market segment manager with IBM Procurement Solutions, in an IndustryWeek article. What’s more, even fewer companies use dedicated supplier lifecycle management solutions.
The challenge holding many of these companies back is that with a large and increasingly global supply base, and supplier data scattered across disparate and diverse systems, most companies are simply overwhelmed with supplier information management—and applying this information to supplier risk management, McGovern writes. Indeed, the typical Global 2000 company has more than 20,000 suppliers in its network, which makes collecting, analyzing and applying information across processes and systems a substantial challenge.
Does your company already take the possibility of heavy rains and flooding, or other events, into account in risk management? Granted, this type of rain isn’t—thankfully—on par with other natural disasters. However, if it’s expected to become more common, will it be seen as a disruption to plan against?