As promised, here is Part II of some lessons learned from the Japanese Earthquake and Tsunami disasters – as well as the nuclear power plant problems. Some of the lessons are in the headlines right now, others are from conversations I’ve had (and heard) with colleagues.
8) Supply Chain Issues – Japanese corporations around the world felt the impacts of the earthquake and tsunami simply because many of the core components that are used to build cars are made in Japan. Many technology companies located in Canada were under stress because some core IT components they utilize were in short supply because they were also manufactured in Japan and there was no alternate in place to acquire the necessary resources. In many instances, the Japanese corporations was physically impacted by the disaster but they were shut down none-the-less because of employee impacts (i.e. families and relatives etc) and from requests from the government to preserve power and emergency services for the impacted areas. These decisions rippled around the world and families and employees and corporations felt those decisions thousands of miles away. What happens in one area of the world no longer occurs in isolation; with the global community coming closer and closer together (regardless of what it might seem like sometimes), disasters of any scale, and in this case a huge scale, have and will be impacting on other communities far away.
9) Reliance on Small Groups – / Dedicated Groups to help: those in the nuclear facility are the only one’s to help. They have been there off and on since the beginning and there is concern (though not fully realized yet) that these individuals may suffer greatly from radiation infections down the road.
10) Insurance Reviews – Based on the costs its estimated to rebuild Japan (the hard hit areas), insurance companies have said they will need to review their policies. The latest number quoted was a triple digit in the billions…yes billions, which is probably rising as I type. Insurance companies are already stating that the cost of disasters around the world – natural disasters that is – is on a major increase, and they can’t afford to keep going in this direction. Many of them will be reviewing the processes, procedures and their products (i.e the policies they sell) and making some significant changes. That means you and I (and corporations) may be spending more on our insurance to help cover the costs of these disasters. One commentator recently said that there was even the thought of dropping any kinds of insurance for natural disasters. Yikes!! What impact would that have in situations like this? Keep your eyes and ears open to this one, as these discussions by insurance companies are going to affect everyone.
11) Nuclear Power Reviews – As a result of the Fukushima nuclear power plant disaster, caused by the tsunami/earthquake, many countries are not suspending further development on any nuclear power plants. Some countries are calling for a major review of their internal set-ups and response plans and even the UN has called for a review of the entire nuclear industry. We depend on the power plants to give us power and what happens here might have significant impacts on industry. Sure, there are alternate power suppliers that are less volatile (for lack of a better word really), but there is still a long way to go before they can generate the level of power delivered by these power plants. Opponents of nuclear energy are using this as an example why we should stop using the power source altogether but there isn’t any real alternative on the table at this stage. These industry reviews might have significant impacts on countries trying to build their infrastructures and make it difficult for those countries with power plants to keep providing the power levels they do.
12) Lingering Impacts – Some reports have stated it may take up to 5 years to rebuild Japan and billions and billions of dollars to help do this. This will mean that Japanese suppliers will be short supplies for a long time to come, unless they can get their operations up and running sooner, rather than later. It’s more than just supply chain management but supplier management. Hard decisions might need to be made by corporations around the world as to who they might need to work with in the mean time to get some of the parts – or services – they depend on that usually come out of Japan. It may be necessary to make partnerships with other vendors and suppliers, until their Japanese counterparts are available and doing business once more.
13) Post-Disaster Rebuilding – After a disaster, it can cost a community – or country – billions and billions to rebuild. It may only be millions for corporations but still there will be a high cost to pay to get their facilities up and running once more; assuming they were damaged in the disaster itself. It may take a long time to get supplies to rebuild, as materials and workers needed may be directed to help with hospitals and other public places; offices of multi-million dollar corporations may fall down the list. Still, there is an opportunity there for corporations to rebuild their facilities with stronger, more disaster-resilient components, which may cost more but may also help mitigate any damage in the future from other earthquakes (or some other disaster). Shock Dampeners (for buildings) are now taking focus for construction companies in areas where earthquakes may happen, as suddenly there is a demand for this product but they will come at a price – a high price. After this disaster, it won’t be surprising if the building codes for Japan become more stringent to ensure that loss of life is minimized and that buildings become even more resistant to earthquakes.
14) Flood Awareness – Even though the great Indian Tsunami a few years ago raised the awareness level of floods, not much was done by many industrial countries, as they believed they were better prepared for these types of disasters. However, if the Japanese felt this way also, they’ve shown that the loss of life is still great when a tsunami occurs. From reports (and news reels) it looks as though the worst of the damage and the greatest number of fatalities came from the tsunami, not so much the earthquake itself. This may or may not be true but the loss of life is still terrible, regardless of the trigger event. Still, flood awareness has certainly increased because the country that was impacted was a 1st world country – and industrialized country – and with all their preparation, buildings and people (people being the more important component here) were still lost in vast numbers. Now it has been shown that you can still suffer from a crisis, even if you’ve prepared communities for disasters, which the Japanese are very well versed on.
15) Aid Agencies – With the ever-increasing level of disasters in the world, Aid Agencies are having difficulties coordinating rescue & support initiatives. There are only so many resources to go around and many of the aid agencies are finding themselves spread thin. Remember, Haiti was over a year ago yet they still require assistance due to disease outbreaks and rebuilding efforts, which has hardly begun if news reports are to be believed. This helps strengthen the idea that we must get our corporations, communities and ourselves better prepared for crisis/disaster situations. The more we are prepared the better we can respond to situations. This will enable Aid Agencies to concentrate and target their efforts on critical areas rather than trying to spread themselves too thin and ultimately not be as effective as they want to be.
16) ‘Moving Money’ – When a disaster strikes somewhere – anywhere – around the globe, people that have relatives in the impacted are will send money for assistance to their families, taking money out of the local economies where they currently reside. Often this can mean thousands and thousands of dollars leaving the local economy. Japanese immigrants residing in Canada with families back home will send money to help them out. Don’t get me wrong, I’m in no way suggesting that people not help their families, I’m just pointing this out as something that does occur when disaster strikes. What this does though, is take money out of circulation in Canada and sends it someplace else, meaning money that could have been spent here is now going to be spent someplace else. The disaster will have far reaching impacts than just those located in the disaster zone.
17) Stock Markets – It’s been in the news on an almost a daily basis, that stock markets are being affected in many countries; not just isolated to the Japanese stock market. With the every occurring aftershocks related to the earthquakes, fears continue to mount regarding the ability of Japan to get its economy back on track (granted, it may take awhile), many corporations are taking a hit due to the uncertainty. Some corporations are taking a hit due to their inability to get up and running thanks to the shortages of parts that are built specifically in Japan. Investors (and economies) will continue to feel the pinch and continue the rollercoaster ride until the rebuilding begins to show results – and the ‘aftershocks’ stop.
18) Technology Saving Lives – Despite what some vendors and their products tell you, technology won’t save a life in a disaster. Sure, it can help get messages out and early warning signals out but int he end, it’s training and awareness on what to do (and how to do it and when to do it) that will save lives. Technology can help get all the right processes and procedures in place but it won’t help people survive the disaster. Of course, I’m not talking about the technology used by doctors, hospitals and rescuers but the technology that predicts disasters and warns us of disasters. Too often, people will see technology as the saviour but it can only do so much – and it isn’t human. It can warn us, notify us, help us when we’ve been hurt but it can’t do anything about our inbreed responses (those within each of us).
19) DR / BCM Software – Just like the point above, these tools can help build the plans but they can’t implement then; this can only be done by people. They can help identify what you need based on specific criteria that you have to input and you’ll get the results from what’s in your data base (the information that has been loaded into the software). It won’t tell you how to do it though and can’t take into account the human element or nuances, so it can only help so far. Sure, some companies used their software packages in Japan but when it came to the people, they were left a bit thin. Don’t rely on them to tell you what to do, only tell you what you need to accomplish your goals. The how is up to you.
No doubt that over the coming weeks and months we will see follow up reports on what went wrong and who did what and who didn’t do what they were supposed to. We’ll find ways of blaming others for the earthquake, the tsunami and the resulting impacts. As we always do in society, we try to find someone to blame, which is going backwards in my view; you can’t change the past and it doesn’t resolve anything. Instead, we need to learn from the experience and put stronger more effective response plans in place to ensure the same level of destructions doesn’t reoccur. If the situation does reoccur, we at least are able to save lives and reduce the number of those impacted by the disaster. I don’t believe one single person is to blame for all that happened but every single person (and corporation) can learn from what happened.
“Heads in the Sand: What Stops Corporations From Seeing Business Continuity as a Social Responsibility” and “Made Again Volume 1 – Practical Advice for Business Continuity Programs”
by StoneRoad founder, A.Alex Fullick, MBCI, CBCP, CBRA, ITILv3