The world is more interconnected than ever before, and rapid globalization has complicated supply chains. New and increasingly sophisticated threats like cyberattacks are emerging. At the same time, traditional challenges like natural disasters and supplier risks persist.

In this landscape, many companies across industries have come up against unexpected and costly supply chain disruptions. The common problem? A lack of strong processes to mitigate risks, manage disaster, and ensure business continuity. This is where disaster recovery in logistics comes into the picture to support effective supply chain security.

Here's what you need to know about the process of creating and implementing a disaster recovery plan. 

What Is Disaster Recovery in Logistics?

Life happens. Disasters occur. They are a part of doing business none of us can avoid. But, we can plan our response to them to minimize the amount of damage they leave behind in their wake. This is called disaster recovery planning.

Disaster recovery in logistics is all about keeping your operations running as smoothly as possible during and immediately after an unexpected event. It involves identifying, assessing, and mitigating potential risks.

Many types of disasters and emergencies can affect logistics operations:

  • Natural disasters like storms, floods, wildfires, pandemics, and contamination
  • Emergencies like workplace accidents, loss of power, transport disasters, and biosecurity threats
  • Information technology (IT) threats like security breaches, malicious software, and IT failure
  • Reputation incidents like negative media coverage, legal action against the company, and inappropriate workplace behavior

Not all disasters will be relevant to your specific business. Instead, disaster recovery is about choosing the risks that are most likely to impact your operations and creating a detailed plan to address them.

How to Conduct a Risk Assessment for Logistics and Supply Chain

The first step in disaster recovery is performing a risk assessment. This helps you identify potential vulnerabilities in your logistics and supply chain operations. Here's your step-by-step guide:

Step 1: Define the Scope

First, you want to map out the full range of activities that take place within your logistics operations. What are the moving parts? How are they connected?

Consider everything from sourcing raw materials to delivering finished goods.

Step 2: Categorize the Risks

You've got a clear picture of your operations. Now, it's time for risk identification and categorization.

Consider which risks are known to your business. These are threats that you can define and measure over time. Some examples include:

  • Operational risks like human error and equipment breakdown
  • Strategic risks like changes to customer behavior or shifting market dynamics
  • External risks like policy changes

Then, think about the unknown risks. These are difficult or impossible to predict. Examples include:

  • Natural disasters like major storms
  • Cyberattacks like data breaches or ransomware

Step 3: Undergo Qualitative and Quantitative Assessments

Next, you want to evaluate the identified risks and categorize them. There are two ways to do this: qualitative and quantitative.

  • A qualitative assessment might involve brainstorming with employees, experts, and stakeholders. You might use scenario planning to evaluate the true impact of a risk.
  • A quantitative assessment is about looking at the numbers. You might use historical data and other statistical methods to forecast potential losses or disruptions.

Step 4: Leverage Risk Planning Technology and Tools

To boost the accuracy of your risk assessment, you might use technology and tools like risk mapping software and AI-powered predictive analytics.

Step 5: Engage Stakeholders

With so many interdependencies, it can be difficult to capture your supply chain's full risk landscape. You might collaborate with stakeholders to fill in the gaps. For example, suppliers can shed light on their challenges and potential vulnerabilities. Customers can share their major pain points, which you can use to evaluate the impact of certain risks.

Five Effective Disaster Recovery Supply Chain Strategies

Here are five strategies to consider for effective disaster recovery in supply chain operations.

1. Embed Risk Awareness into Your Culture

Management and employees need to feel empowered to pass on bad news and share lessons learned from mistakes. This starts with the company culture. Cultivate a sense of openness to create an environment where it is okay to voice and deal with issues. Focus on finding solutions rather than assigning blame.

In addition, leaders should clearly define and communicate their organization's risk tolerance. It’s important to be on the same page regarding which risks need to be mitigated and which can be managed within acceptable limits. Make sure everyone knows how to spot and share warning signs of potential risks.

Finally, employees should be confident in their ability to react to an emergency. Foster a sense of ownership where team members feel responsible for the outcomes of their actions and decisions. Align their risk appetites with the organization’s to ensure that individual actions benefit the whole organization rather than causing harm.

2. Use the PPRR Risk Management Model

Once a risk-aware culture is in place, the next step in your supply chain risk management (SCRM) approach is to use the PPRR model. This stands for:

  • Prevention: Take steps in advance to minimize supply chain risks.
  • Preparedness: Create and put in place a plan for handling emergencies.
  • Response: Follow your emergency plan to lessen the impact of any disruptions.
  • Recovery: Get back to normal operations as fast as you can.

3. Strengthen Your Cybersecurity

With digital technologies like the Internet of Things (IoT) playing an increasingly important role in supply chain operations, businesses are exposed to more cybersecurity threats than ever before.

Your risk mitigation strategies should focus on strengthening your defenses. This might include setting compliance standards for all third-party vendors, updating user roles, and introducing security controls. Remember to perform a thorough vendor risk assessment before signing a contract.

You should also adopt data stewardship standards to define data ownership and responsibilities and establish data backup procedures. Additionally, provide comprehensive cybersecurity training for all employees—over 80% of incidents are caused by human error.

4. Improve Supply Chain Visibility

Greater visibility empowers you to anticipate and address problems before they escalate. So, use technology to track products and shipments and keep customers informed about delivery times. Leverage service portals, IoT sensors, and automated reports on inventory levels to stay updated in real-time.

Ensuring greater visibility during the "last mile" of delivery can also mitigate the risk of delays, improving customer satisfaction.

5. Continually Monitor Risk

Finally, consistently monitoring supply chain risk factors is crucial. Many organizations assume they are secure once they have a risk mitigation framework, but ongoing effort is essential if you are to keep one step ahead of evolving threats.

How to Ensure Communication During a Disaster

Effective communication keeps everyone on the same page, allowing for a smooth and efficient response during a business disruption.

When disaster strikes, it is imperative every person understands what they need to do and when. So, as you outline your communication plan, consider assigning the role of a key spokesperson. This person will lead communication efforts in the event of an emergency. They should be prepared and ready to deliver clear, consistent messaging to the relevant people and organizations, including customers, staff, and, if necessary, the media.

Moreover, disasters are unpredictable. There's no guarantee your organization's preferred communication channels will be available. To combat this risk, use multi-channel messaging solutions. They enable your team to communicate with each other, customers, and stakeholders via social media, email, SMS, and more.

You can even segment your messaging and communication channels based on the location of the recipient. For example, you can deliver multilingual messages to suppliers across your global network.

Technologies to Support Your Supply Chain Disaster Recovery Plan

These advanced technologies could play a vital role in supporting your business continuity plan while giving your organization a competitive advantage.

Real-Time Tracking

Real-time tracking allows you to monitor shipments and inventory across a global supply chain with up-to-date information on their status. You can then respond quickly to any disruptions.

Automated Notifications

Automated notifications keep all stakeholders informed about the status of the supply chain. This ensures timely updates and helps manage expectations.

Data Backup

Data backup is crucial to protecting your information in the event of a disaster. Schedule regular backups and store them securely to prevent costly data loss.

How to Train Your Team for Disaster Relief

It's one thing to establish a disaster recovery plan. It's another to know how to use it. You must regularly practice and update your disaster relief procedures. Only then will your team feel ready to take action when needed.

One way to do this is to train your team using mock exercises. This might involve taking systems offline or temporarily disabling primary communication methods. 

During each exercise, define your goals and set success criteria. Pay attention to incorrect assumptions and gaps in your processes. For example, you might find that your backup communication services don't work as expected. Take action to resolve any hiccups and be sure to redo failed tests within the next few months.

How SEKO Logistics Can Assist with Logistics Continuity Planning

SEKO Logistics is your trusted partner, and we are just as committed to ensuring business continuity in logistics as you are. Our award-winning eCommerce solutions, freight forwarding, expedited shipping, and White Glove services mitigate risks across a global hub network.

Customer-focused and flexible, we adapt to meet your needs so you can overcome the hurdles specific to your business or industry. Plus, our advanced technology reduces your risk exposure with end-to-end visibility of your supply chain. Track your shipments in real-time and address potential issues fast.

Resilient operations start with the right software. Here at SEKO Logistics, we offer the security and stability your business needs in today's complex and interdependent world.

Contact SEKO Logistics. Let's make sure your business is ready for any challenge that comes its way.