Augusta’s Lessons from Hurricane Helene: A Call for Better Supply Chain Management
Augusta, like many cities along the East Coast, felt the impact of Hurricane Helene when it struck in late September. The storm wreaked havoc in North Carolina, leaving behind a trail of destruction, especially in areas like Asheville, where heavy winds and record-breaking floods resulted in tragic loss of life. In the wake of this disaster, Rick Franza, a business professor from the James M. Hull College of Business, believes it’s time to rethink our approach to supply chain management and disaster preparedness.
Understanding Risk in the Supply Chain
Franza, who specializes in supply chain management, notes that the ripple effects of Hurricane Helene are being felt not just locally but also nationally and globally. He draws parallels to lessons learned during the COVID-19 pandemic and earlier disruptions, such as the collapse of the Francis Scott Key Bridge in Baltimore. “Understanding and managing risk is really important for companies,” he explains. “They need to evaluate what could happen and the impact of those scenarios.”
He adopts a straightforward approach when it comes to risk assessment, utilizing a 2-by-2 matrix. For instance, if a situation has a low likelihood and low impact, companies might not worry much. However, when the likelihood of a disruptive event is high and the impact is severe—like hurricanes—the stakes become considerably higher. “We’ve got to start thinking about that,” Franza states firmly.
High Stakes in North Carolina
The devastation in western North Carolina significantly complicates logistics and transport. With two bustling ports located in Wilmington and Morehead City, this region offers prime transportation facilities, including easy access to major highways and railroads. However, with some roads washed away and interstates closed, questions remain about how to effectively distribute goods.
“Let’s break it into two pieces,” Franza suggests. “Are there alternative routes to get trucks into Asheville or western North Carolina? You have to think about how to get supplies into areas so that people have access to essentials.”
Outbound Supply Chain Disruptions
But it’s not just the inbound flow of supplies that’s concerning. Franza highlights problems faced by a manufacturing plant for Baxter International in Marion, North Carolina, which produces a shocking 1.5 million IV bags each day—60% of the nation’s supply. With the plant flooded, it had to shut down its operations, leading to potential bottlenecks in getting crucial medical supplies to healthcare facilities.
A similar issue arises in the quartz mining industry near Spruce Pine, where production is vital for the semiconductor industry. The two mines there produce over three-fourths of the world’s supply of super-pure quartz, essential for manufacturing microchips. The mines had to suspend operations just before the hurricane struck, leaving uncertainties about when production might resume.
Transportation Troubles and Recovery
While Georgia’s Port of Savannah dodged significant issues thanks to its geographical luck, damage to the state’s roadways remains a concern. The area surrounding Augusta has experienced numerous downed trees and power lines, but no major railroad damage has been reported so far. Unfortunately, the Norfolk Southern Railway tracks in Asheville are expected to remain closed well into 2025 due to substantial washouts.
Franza emphasizes that preparation for such extreme weather events is crucial. He pointed out that while Asheville’s infrastructure struggles, it’s become glaringly clear that cities and businesses must be better equipped to handle the unexpected.
Building Resilience in Supply Chains
As the uncertainties surrounding potential disasters increase, Franza argues it’s imperative for companies to adopt better risk mitigation strategies. “It’s about building redundancies into your supply chain,” he asserts. Over the years, many businesses have begun diversifying their sources to avoid being caught off guard by unexpected closures, such as during the pandemic.
Companies have learned that by shifting some manufacturing closer to home, they can alleviate some of the pressures associated with international shipping issues. This proactive approach allows businesses to continue operations and meet consumer needs, even during challenging times.
Conclusion: A Path Forward
While no one can predict the future—whether it’s a pandemic or a powerful hurricane—what remains crucial is that businesses continually adapt. Franza encourages companies to prepare for both high probability/high impact and low probability/high impact scenarios, emphasizing that risk management should be a top priority moving forward. “You can’t anticipate everything, but you must try to mitigate as much as you can,” he concludes.
