The Inevitability of Crisis

2

As events continue to unfold in Egypt, I keep thinking about whether there are any lessons from a supply chain perspective that we should be taking away.  And the answer is, without discussing the religious or social aspects, of course there is.

There are certainly the obvious risk management / disaster recovery issues regarding interruptions in supply and demand for enterprises that either use Egyptian suppliers or distribute to (or through) Egyptian customers / channels. Have alternative supply arrangements been made? Where will firms replace the revenues lost from customers impacted by the situation?  Were alternative distribution channels in place?

From a forecasting perspective, could the recent events be anticipated? Could we have looked at Tunisia as a predictor? Should we be looking at Tunisia and now Egypt as a predictor for Jordan, Saudi Arabia, or other countries in a similar situation? Does an enterprise look at its peers as part of their disaster recovery / risk management planning program? Are there other entities that an enterprise should be looking?

At a higher level, looking at the challenges of supporting historically strategic partners, while they go through significant changes, how can/should an enterprise react? Can/should an enterprise impose its principles on those of their customers/suppliers? Currently several of the news articles are demanding a response from the US government, which puts them in a very awkward predicament. They want to support Egypt who has previously supported the US in the past, but don’t want to put the US in a worse situation in the future.

From a governance and decision making perspective, who within an enterprise is responsible for managing through a catastrophic even?  Enterprises continuously face far less significant challenges. Where is the line below which certain stakeholders are empowered to address / resolve conflict? I believe most executive teams are “always the last to know”. Are there mechanisms in place so that impending issues are elevated to the appropriate decision makers early enough?

From a communications perspective, the reports of how Egypt attempted to control wireless and internet based communications are scary. In a free market economy, how can/should an enterprise control communications?

From a speed perspective, how quickly can an enterprise react to a catastrophic event? Are decisions being made quickly enough? Is a correct decision made too late worse than making a wrong decision made more quickly?

Throughout all this, I still wonder, what was the “triggering event” that caused the situation to escalate at this specific time – Why not earlier? Why not later?

As the events unfold, I believe that there will be several “lessons learned” that will be looked upon by enterprise leaders around the world. What if something like this happened to “us” (wherever you are)? Where will be the next break down of government structure?

Did you like this? Share it:
The following two tabs change content below.
Dalip Raheja
Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.
Share.

2 Comments

  1. Joseph Richardson on

    Disaster Recovery is a strategy that many companies speak about, but few implement; beyond a few critical parts in their supply chain. Your point is “spot on”: “who within an enterprise is responsible for managing through a catastrophic event?” Well, depending on the event, if it pertains to the supply of products and/or quality, it will rest with the supply chain organization.

    Risk assessment and disaster recovery should be continuums; however, such assessments are normally handled as events. They occur at the beginning of a project, but are not normally monitored to determine if the “low” risk items have been impacted by environmental issues that changed the classification from “low risk” to “high risk”. The responsibility for such assessment should rest with the Supply Chain Organization, but effective project management is something that should be exercised by the leadership of the enterprise.

    Joseph Richardson, Ph.D.

  2. Dr. Richardson’s comments on Disaster Recovery & Risk Management certainly reflect best practices. I wonder if there are examples of how enterprises are handling the situation now. I have seen only a few news releases of how some well known multi-national firms have suspended operations in Egypt and are pulling their ex-pat employees out.

    I did see one article mentioning the impact of the unrest in Egypt on the stock value of the following firms: Food (ConAgra, ADM, Cargill); Defense (Boeing, Lockheed Martin, Northrop Grumman, General Dynamics, Raytheon) and Energy (BP, ENI, Apache Corp, BG).

    http://money.cnn.com/2011/01/31/news/international/egypt_economic_interests.fortune/index.htm

    And yet, the Economist.com had a completely different take on the situation in Egypt. http://www.economist.com/node/18070190
    What about the other industry sectors? What about small to mid size companies?

Leave A Reply

Captcha * Time limit is exhausted. Please reload the CAPTCHA.

*