Supply Chain Now Episode 353

“The tropical storm season is coming regardless of whether we’re paying attention to it or not.”

– Shehrina Kamal Project Director of Risk Monitoring at Resilience360

 

If your company is starting to stabilize in the midst of the COVID-19 pandemic, and you aren’t overly concerned about the invasion of the so-called ‘murder hornets,’ don’t relax just yet. Hurricane season is just around the corner.

Shehrina Kamal is the Project Director of Risk Monitoring at Resilience360 and Jon Davis is the Chief Meteorologist at Riskpulse. Their organizations have partnered closely since January and are in the process of transitioning to a single brand that will focus on helping companies manage supply chain risk.

In this conversation, Shehrina and Jon provide commentary for Supply Chain Now Co-hosts Greg White and Scott Luton that connects the disruption we are already seeing with the disruption that is still to come:

  • Why the increased pace of business decision making requires unprecedented amounts of information from multiple sources
  • The value of predictive insights that empower supply chain managers to re-route a shipment or switch sources before a disruption even takes place
  • How companies can prepare and respond to the ‘surprises’ that will always take place, no matter how much planning and analysis they invest in

Intro – Amanda Luton (00:05):

It’s time for supply chain. Now broadcasting live from the supply chain capital of the country, Atlanta, Georgia, heard around the world. Supply chain. Now spotlights the best in all things, supply chain, the people, the technologies, the best practices, and the critical issues of the day. And now here are your hosts.

Scott Luton (00:29):

Hey, good morning Scott Luton here with you on supply chain. Now welcome back to the show. On today’s episode we’re going to be talking about hurricane season, which is just around the corner. And as we’ve seen time and time again, hurricanes pose significant challenges for global supply chains. But today we’re going to be offering insights, observations, and resources that will help you better manage and mitigate the risk ahead. So stay tuned as we look to increase your supply chain leadership IQ quick programming. Before we get started here today, if you enjoy today’s conversation, be sure to find us and subscribe wherever you get your podcasts from. All right, so we’ll welcome in our featured guests here today. First up, Sharina Kemal product director, risk intelligence with resilience three 60 Sharina. Good morning. Good morning. So great to have you back. We always love to have repeat guests back.

Scott Luton (01:23):

Uh, got so much good feedback from the webinars and podcasts. You joined us on. Great to have you back here on this episode. And you’re joined by none other than John Davis, chief meteorologist with risk pulse. John. Good morning. Well, good morning, Scott. I’ll tell you, you know, it’s not every day we’ll get a chance to interact with a chief meteorologist that knows supply chain here at supply chain now. So looking forward to picking your brain. Likewise. Likewise. All right, so let’s, before we dive in, let’s set the table a little bit and really, uh, establish a backdrop a bit. So great. Again, great to have you both on the show. As we mentioned, Sharina, we love our repeat guests. Um, but let’s give today’s audience an opportunity to get to know you both a little bit better. So, um, you know, Serena, let’s start with you. Let’s refresh our audience’s memory. Let’s talk about where you’re from and give us a story or two from your upbringing.

Shehrina Kamal (02:20):

Great. Um, so Scott, thanks for having me back. It’s always great fun to be on these conversations. Um, I’m originally from Baldez and I’ve lived and worked in three continents and am now currently based out of cologne, Germany. So growing up in Bangladesh has shown me the incredible devastation that natural disasters can have on local population infrastructure and businesses. And what really fascinated me as I got older was learning how Bangladesh has exceedingly improved on its disaster management abilities in the last 30 odd years and much of its experiences are learned in disaster management courses worldwide now. And that’s something I’ve tried to carry into my professional life as well. Trying to understand and address supply chain in the context of limited but efficiently managed resources.

Scott Luton (03:04):

Hmm. What a great personal connection there. Um, and I’d love to, I’ll tell you in the future episode, we’re going to have to dive into a case study of how uh, Bangladesh has been able to do that. Um, really quick before we switch over to John, give us just a reader’s digest version just to make a couple of key aspects of your professional journey leading up to your current role.

Shehrina Kamal (03:27):

So I’m an economist by education and a supply chain professional by trade. I’ve been part of the logistics industry for more than 11 years. I started my career in role spatting development, consultancy, communication, logistics, innovation, and found myself drawn to this new startup. We were incubating that Deutsche post DHL eight years ago to address customer concerns around managing supply chain risks. And here I am today talking to you.

Scott Luton (03:54):

Love it, love it. Um, and, and talking to us for a third or fourth time. We’ve enjoyed each one of those. Uh, alright, so let’s switch gears over to John Davis. John, tell us a little about where you’re from and, and you got to give us the goods on your upbringing a little bit.

Jon Davis (04:12):

Sure. So I grew up in the Chicago area and then went to college in Madison, Wisconsin. Uh, spent five years in New York out of college, then back to Chicago for most of my working career. And then just about nine months ago, um, my family and I, we moved to Barcelona, Spain, so most of my time has been in Chicago. But then kind of now in Barcelona is we moved last August here from Chicago to Barcelona. Um, I guess kind of thinking back a little bit from a standpoint of kind of my upbringing is that I spent all my summers as a kid, uh, on the family farms back in South Dakota. Um, my parents were both farm kids from South Dakota. They both became high school English teachers, moved to Chicago. That’s where the jobs were, but all the summers were kind of out on the farm, on the family farms. And it was all of those years kind of of watching weather, just incredible things that I would see. And that’s kinda how I got the weather bug. And as many meteorologists are kind of a weather nerd. And so I’m one of those individuals that, you know, from the time I was five years old, the only thing I ever wanted to do is be a meteorologist. So, and I still do that today. So kind, kinda my hobby is my profession and you know, beyond that. So

Scott Luton (05:33):

love that. Wow. Um, and you know, I spent a couple years in Wichita, Kansas and, um, and I’m a bit of a weather nerd as well, and it is fascinating that the Midwest of the country from a weather standpoint is just absolutely intriguing. Hey, uh, real quick, um, uh, two quick questions. Johns, we close out this first segment. First up, uh, being from Chicago, uh, w socks or cups? Cubs. Cubs. Okay. Alright. And then, uh, more importantly, uh, you’re talking about some of your recent moves and certainly your passion. Um, give us just, you know, like Sharina did in a nutshell, your professional journey leading up to your current role. Sure.

Jon Davis (06:15):

Um, I graduated college. I’ve been, uh, in 1985, so I went right from college in Madison, Wisconsin. My background is all meteorology. Then went right to wall street. So I spent 18 years at the commodity divisions of city group, um, and never thought I would leave there. And at the end of that, then I was chief meteorologist for city group, kind of looking mainly at agriculture, energy risk management. And then after that 18 years, I spent 10 years at Chesapeake energy, um, kind of involved in their hedging operations and all of their kind of weather decision making that they had to Chesapeake, kind of on the physical side, if you will. And then after that, the last six or seven years then have been at risk Paul’s. So I’m in kinda my 35th or more a year, uh, from that, but I’ve really kind of done the same general thing. And again, it gets down to applied meteorology, applying weather and climate to things like supply chain, like energy, like agriculture. And that’s really been my focus in my forte.

Scott Luton (07:20):

Love that. Okay. Um, alright, so before we dive into what I’m sure is going to be a ton of expert insights and perspectives, um, let’s get to know your organizations a little bit better, especially for our audience. So Sharina we’ll start with you. Tell us more about resilience. Three 60.

Speaker 5 (07:39):

Okay.

Shehrina Kamal (07:39):

So in a nutshell, resilience three 60 helps customers answers questions such as, where do I need to invest my risk management efforts? Even the most resource heavy organizations need to find a way to prioritize and by acquiring visibility into their supply chain networks, customers that are using resilience three 60 try to figure out how to avoid supplier failures, avoid production outages, avoid loss sales, reduce premium freight costs or maintain order volumes and essentially limit reputational loss by staying ahead of supply chain disruptions.

Scott Luton (08:11):

Love that. It’s lot easier to manage all those issues if you can avoid them all together. Right? That’s right. It’s the name of the game. Alright, so John, if you would do the same, tell us about risk pulse.

Jon Davis (08:23):

Sure. Well, just a quick history on risk Paul. So it’s been around over 10 years and initially was devised is a hurricane tracking software company. There were no meteorologists there, but that’s how it kind of started out and it’s changed in more over the last, you know, six or eight years to get into other arenas. The big one really being, you know, supply chain or risk management, um, in logistics. And that happened about four or five years ago. Um, when numerous companies came to us and they were losing a product. Actually beer in this case, uh, during the cold winter of 13 and 14, it was so cold that the beer was blowing up and six packs and kegs and they lost huge amounts of money, millions. And they came to us and said, can you help us manage that? So now we build software and we go through and we help clients detect, analyze, and then make decisions on their overall shipments and products both domestically and globally.

Scott Luton (09:26):

Love that and bringing it forward. I was reading just a week or so ago about a lot of the, uh, beer that’s at risk today given kind of the, the shelter at home conditions and the global pandemic and all the events that have been canceled. Uh, the beer that had been produced for a lot of that surge in demand and the events and uh, you name it, uh, it could a law that could be lost. Well, so interesting times, uh, especially in some of those sectors that could be in your blind spot. Right? Absolutely. Um, all right. So Sharina interesting to me is, is the relationship between resilience three 60 and risk pulse and, and how you, you, you team up to really serve the market, serve the industry. Uh, tell us a little more about, you know, how you’ve seen organizations leverage the combined solution to fill gaps and of course drive success.

Shehrina Kamal (10:20):

So we’re very excited about bringing our unique strengths and coming together as one organization to help customers manage supply chain risks. John and his team have done some incredible work around weather analysis that is truly unique in the market. And resilience three 60 is pretty good at monitoring comprehensive risks across the world. So we’re hoping that once the two organizations merge fully, uh, our customers will have even more predictive capabilities around how natural disasters and weather affect their operations and build on their current risk management processes with a view to incorporate other issues such as of course, a pandemic trade Wars report congestions that can impact supply chains.

Scott Luton (10:58):

Outstanding. Moving from the V six to the VA, it sounds like, John, what have you seen in this regard?

Jon Davis (11:04):

Well, I think a lot of it comes down to, and the thing that’s really been evident over the last couple of months since we’ve gotten together is that the people in both companies are so good and so talented. So on the three 60 side, their expertise, Turinas team and others in the company, their expertise at supply chain logistics, overall global structure of what they do and you know, the background that they’ve had over the last 10 years to analyze data. And then you combine that with our data analytics and risk polls and the kind of weather and climate team, um, here, um, and the people involved in that. You really have a powerful team here going forward, you know, to help clients within the industry.

Scott Luton (11:51):

Outstanding. And that’s the name the game. Um, alright, so let’s switch gears here. I want to dive into today’s primary topic and the primary segment of the conversation. And that is the 2020 hurricane season outlook special report. Um, want to get some background first and I want to say, you know, uh, before we get started Sharina I loved your personal connection and both of y’all had personal connection to weather and, and how that can impact business. And I grew up in South Carolina. My dad spent over 30 years in the national guard for the state of South Carolina and you know, clearly what still stands out and, and my childhood memory is hurricane Hugo, which devastated the Charleston area, uh, back in 1989, I believe it was. And of course my dad has his natural guardian. It was called up to go, go in and, you know, clear roads and, and, and get massive trees off homes.

Scott Luton (12:46):

I mean, it was just a devastating one of those things that you just don’t ever forget about. So, um, fast forward to today, uh, as weather has gotten more uncertain, certainly, uh, more disruptive. This is, I think, really a fascinating discussion where we’re, we’re poised to have here today. So, um, so John, for starters, how did the idea for a coauthored report come about? Well, we, we knew that the season was going to be incredibly unique, the most unique hurricane season we’ve ever had because at a time when we’re starting to recover over this summer and fall from what’s happened with the pandemic, you know, ongoing right now you’re going to have the added issue of disruptions from a tropical or hurricane standpoint out there. And in the last couple of months we began talking about that integration or that interaction. So beginning to get out of, you know, kind of a supply chain, disruptions from Colvin and then getting into the hurricane season.

Scott Luton (13:50):

And we thought that bringing both teams together in doing a report that talks about the integration of those two, again, probably the most unique situation we’ve ever been in was a really good idea. And we bring the expertise of both teams in and do a webinar and report and so on and so forth. The timing was just perfect. Absolutely. And, uh, and, and information, if you’re a global supply chain leader, uh, looking to, you know, uh, going back to what Sharon was talking about, avoid risk and, and as much as you can and then when you have to engage it, manage it and mitigate it, you’ve got to pay attention to the weather. So getting great insights on all the different risks that, that weather plays is, is intriguing. Alright, so dealing with a hurricane by itself though is no easy task for an organization supply chain, which is why we’ve got to get our finger on the pulse.

Scott Luton (14:45):

So when you add in the fact that we’ll also be dealing in this season with Kuvan, 19 for, for some time to come, you know, we all probably have, uh, talked about the new normal that will be, you know, a lot of things will be much different in the immediate aftermath and a lot of other things unfortunately may permanently change. So a high probability that some part of the nation are going to be dealing with both disasters at the same time. Really a high probability that many parts of the globe will be dealing with, with both disasters at the same time. So big potential for a multiplier effect. So Sharina you’re, can you walk us through some of the most challenging scenarios that organizations might face when dealing with both of these scenarios? At the same time,

Shehrina Kamal (15:35):

challenging aspect of dealing with this year’s tropical storm season is that we’re all only just getting used to the new normal that coven 19 has established for us. Uh, most organizations are still trying to figure out how to bring operations back online and ship their finished products to final destinations, submit the challenges around limited cargo capacity. So when you throw in a devastating tropical storm into that mix, which has the potential to shut down supplier locations. Once again, manufacturing operations in highly vulnerable areas will face a setback further to that tropical storms can cause poor closures and affected regions. And subsequently port congestions, we’ve seen a number of ports, particularly in Asia, highly congested due to a lack of workforce as a result of coconut 19 quarantine measures imposed by local authorities. And all of this can really snowball into a much bigger issue.

Scott Luton (16:26):

Yep. And we’re going to dive into a little bit more some of those things you mentioned about later in the episode. So John, what would you add here?

Jon Davis (16:33):

Well, it’s certainly some of the information that our clients have been sharing with us. Some of the things that they’re worried about, worker availability, which of course has been a major problem in things like some of the meat processing plants out there. And you know, if we do have an outbreak and processing plants close and then you would combine that with a tropical system that has its own sets of challenges. Again, a credibly unique situation. The other issue is product availability. We’ve heard so much about the amount of products, all kinds of products that are not available due to various reasons and those restrictions overall will be very challenging as you’re trying to bring product in before a storm hits water and things like that. And then after a storm hits in the recovery. So, again, just an incredible unique situation here coming up in certainly every storm and the impact will be magnified the season all over the globe.

Scott Luton (17:33):

Hmm. You know, and, and, and that, um, you know, the interesting thing, we’ve talked a lot about a lot of our shows here at supply chain now is, uh, the, the localization of hurricane damage or other natural disasters and, and, and the localization of that allows enterprises and supply chain organizations to reroute resources and whatnot. With the pandemic being the global impact. You don’t have that same, uh, oftentimes you don’t have the same flexibility, more or less. So, uh, these two massive challenges coming together, it’s going to present some, uh, some big obstacles here. Alright, so Sharina now that we’ve talked about the multiplier effect, how do you think, two part question here, how do you think managing the covert 19 environment and the hurricane season, uh, uh, and the hurricane threat will change the mindsets of business executives around supply chain management and in particular, what do you think we’ll get better or worse?

Shehrina Kamal (18:36):

Yeah. So what coven 19 has already demonstrated to business executives and supply chain practitioners is that risk management processes and tools are not simply nice to have. Sure. Coven 19 is a once in a lifetime, kind of a disruption with no proceedings in recent times, but tropical season comes around each year. If as an organization you’re still not preparing for it in advance, there’s a good chance that your competitors will and get ahead during a crisis. So many organizations already deal with multiple disruptions at the same time during the course of a year and this will show that in order to be able to deal with it effectively, there has to be a cultural shift and there has to be investments in processes, tools, and technology to help organizations manage these better. So while the outlook seems quite dismal at this point, I think this will be a way for organizations to realize how they can do things better in the future.

Scott Luton (19:31):

John, same question. How do you think the mindsets of business executives around the world supply chains, blockchain risk management will change and what’s going to get better or worse?

Jon Davis (19:42):

Well, you know, certainly with this unique situation upcoming then decision makers out there are going to more than any other time have to react quickly and be very agile in making decisions. And certainly those companies that aren’t good at those types of things, um, will be the ones that are kind of left behind. You know, as we’ve seen over the last couple of months, things change very rapidly in the companies and the business leaders out there and the um, individuals that are making decisions will have to react very quickly to upcoming things going on, whether it’s hurricane activity, whether it’s a product availability and of all those things here together, um, firms are going to have to be extremely agile in decision making. And you know, you just can’t wait around. You have to react very quickly,

Scott Luton (20:35):

which, which is even bigger imperative to make good data available right at your finger tips in the moment, just about, um, and all of the relevant data. That’s some interesting things. Going back to our previous conversations with, uh, the resilience three 60 team. Very interesting there. All right. So John, let’s get your take on this. Do you think supply chain risk management will become a new heightened priority in the way businesses are run? We’ve, we’ve spoke about uh, how risk management in general has gotten a new seat at the table in the last, I don’t know, 10, 12 years, it seems to me at least. But you know, what’s your take on an even new heightened role or, I think there’s no question that the companies will have to look at things a different way from this point, Don. Um, in other words, it’s not going to be business as usual.

Scott Luton (21:29):

So everything is different now. Everything has changed and everything that happens from a standpoint of things beyond the pandemic will have heightened, um, impacts and you know, heightened risk, you know, out there. But I think overall here, companies coming up then you know, are going to have to, you know, go through and certainly react to all those things upcoming. And I think that it’s going to be a different world of coming than anything that we’ve seen in those changes. A lot of those will tend to be in how do you manage risk and how do you mitigate risk? Interesting terrain and your thoughts.

Shehrina Kamal (22:09):

So let me start with one question. Scott. Remember the days when seat belts were optional? That was a while ago, right? There’s a reason why they’re required by law now. So similarly, the pandemic and the hurricane season will help supply chain practitioners see that in order to build agile supply chains, managing risks and recovering from disruption is key. I truly hope that many organizations will bounce back from this pandemic despite the gloomy macroeconomic outlook we see today when they do supply chain risk management will have to become an integral part of supply chain operations.

Scott Luton (22:43):

Hmm. It’s interesting. The seatbelt example, use the shifts in behavior, whether it consumer or um, you know, supply chain in general or supply chain leadership. So always a fascinating, almost psychological study. Um, all right, so moving right along. Look, we all know that companies have dealt with and continue to deal with and we’ll always deal with plenty of setbacks before, some more unique than others. For sure. You know, we can all remember what we lived through last year, uh, for that matter. So Sherina to that. And two questions for you. What were the biggest supply chain impacts from 20 nineteens hurricane season? And secondly, uh, how were global companies forced to adjust these supply chain risks in 2019?

Shehrina Kamal (23:31):

Wow. So honestly I sometimes have difficulty remembering what life was like before Cobra 19 but there were very few very significant tropical storms last year like psycho Anthony, uh, Typhon leukemia and Mongolia as well as hurricane story. And Barry and many of these had devastating impact on local infrastructure, caused extensive power outages and resulted in flight cancellations and poor closures. Um, freakin Berry for example, halted shipping on the lower sections of the Mississippi river for two full days. Hurricane Dorian on the other hand, damaged over 250,000 homes and businesses and coastal areas and they were left without power. Um, type and fuck shy in Japan, halted production at refineries, plastics, rubber and electronics factories in Chiba prefecture, which undoubtedly impacted the availability of materials and components downstream. And to answer a question about how global companies have been forced to adjust to these risks. Um, we’ve seen companies use their visibility on foreclosures and congestions to either reroute shipments or expedited through other means.

Shehrina Kamal (24:35):

Most notably, we’ve seen companies establish better processes to assess and analyze the impact of potential storm even before it hits on key. Customer driven feature that we’ve been developing for our solution is a what if scenario analysis. This allows organizations to quickly assess which suppliers transportation hubs and shipments can be impacted as a result of an approaching storm so that they can analyze a product revenue and eventually the bottom line impact in the organization and quickly mobilize resources for locations that need to be prioritized. We’ve also seen from previous hurricane seasons that organization, uh, especially in the aftermath of hurricane Maria that devastated Puerto Rico have worked to build in contingencies under operations, like having additional warehouse capacities to hold inventory on the U S mainland to minimize impacts from future hurricane. So those are just some of the examples that we’ve seen, at least, uh, the, the customers that we work with, uh, take on.

Scott Luton (25:30):

Hmm. It is interesting. I think a lot of folks have a hard time remembering back to the pre pandemic environment’s great point. Um, and the right as you said, some of those store names they were, it took me right back to how could I forget about some of these things. All right. So John, I think we have a little trivia question for our listeners. Right? So how many of the top 10 ports globally that are at risk of tropical storms, how many of those top 10 are in the United States? Actually it’s zero. So, so

Jon Davis (26:05):

when you look at the globe and you look at tropical storm activity, it’s the Western Pacific that is in breadth of seize the hotspot. It is the area of the world where there’s more frequent tropical storm activity than any other area. So if you look at all the major ports on the globe, the top 10 are all in a relatively small area. Many of them in China, Taiwan, South Korea, and then to Sri Lanka and Thailand. There’s not one in the United States. The next tier that the next 10, there’s a couple of those in the United States, but in the top 10, they’re all in East Asia.

Scott Luton (26:47):

Yeah, that’s going to surprise a lot of folks, especially folks in the States, maybe arguably in the Southeast where, you know, here we hear a lot about the growth of the port of Savannah down there. Right. And then for good reason, uh, and that being on the Southeast coast, that’s impacted with a lot of hurricanes, that really your perspective there puts out, adds a lot more context to the conversation. So it’s fascinating. Alright, so John equally as fascinating. Uh, I’m not sure and, and I’m usually the last person knows, sometimes. I’m not sure I’ve ever heard of supply chain companies using data analytics to determine what ports and airports are at the highest risk of tropical activity. It makes a lot of sense now as we uncover it now. But tell us more about that research and of course the porks themselves. Yeah. So,

Jon Davis (27:36):

um, you know, back a couple of months ago when we were thinking about doing some things for the upcoming tropical season, you know, we did have a couple of questions and we’d never seen the answer to this. For example, what is the one port around the world that has more risks than any other port? What is the number one airport for cargo that has more Tropic storm risk than any other airport. So the team, we kind of got together and they said with data analytics, we can look at this and we can determine, you know, any lists out there. So what we did is we looked at what we called grid points. Think of that is like [inaudible] point. That could be an airport, it could be a port, it could be a city, you know, it could be a, uh, any, uh, processing facility. And then on top of that, then we put in tropical historic activity, which we have large databases through our software that we can integrate that onto the lat-long situation.

Jon Davis (28:41):

So for any point around the globe, we can get an idea of the hurricane risk or is is one station or point more or less vulnerable than other areas around the globe. Then we took the list of ports for example, and then we can literally rank them from one to 20 or one to 50. And we did that for cities. We did that for air airports from our cargo standpoint. And so through data analytics, we made those lists and we answered the question, you know, what is the number one port of risk on a global basis? And actually it’s in Southern Taiwan.

Scott Luton (29:24):

Hmm. You know, uh, you have painted a perfect picture in my mind’s eye as you described that I can see the matrix, John, I can see the matrix and going back when you, when you, just to clarify for our listeners, um, Lee laun point, you’re talking latitudes and long longitudes across the globe, right? That’s correct. Yep. Yep. So it makes perfect sense. Now as you grid that out or map it out and map out all these locations and then overlay, you know, tons and tons of historic tropical activity. That makes a ton of sense. So, so Sharina bring you back into the conversation. Hey, would you speak more to the close your periods and financial damages from all of this comprehensive research?

Shehrina Kamal (30:07):

Yeah, so we’ve been crunching a lot of numbers just to kind of assess the kind of impact previous storms have had. And what we found was quite interesting, especially in light of what just Sean said. Um, so the Pacific, we’ve seen an average poor closure periods of one to three days. Uh, whereas ports around the Caribbean, Gulf of Mexico and the U S East coast have a notably higher closure period on average nine days. And then for ports around the Indian ocean, it is about an average, uh, one or two days. So, uh, given that none of the top, highest exposed, uh, ports are around the Caribbean and the Gulf of Mexico and the U S East coast. I found that very, very interesting in terms of damages, um, psycho and Fonny that effected, uh, Sri Lanka, Bangladesh in India last year, incurred about 8.1 billion us dollars in damages. Um, type one, the Kima had similar financial impacts that 9.2 8 billion us dollars were petrochemical, aluminum and steel industries in Shandong province in China were impacted. And of course, who can forget hurricane Dorian, um, for its intense and unpredictable path, um, had an overall financial impact of 4.6 8 billion in us dollars. And you can find a lot more of these impact data and our report that’ll be out next week.

Scott Luton (31:23):

Hmm man, there’s huge numbers and the stories behind those huge numbers are even more intriguing and, and devastating. So. Alright, so looking forward to the 2020 hurricane season outlook report and what can people hope to get out of the report? And John, we’ll start with you there. Yeah.

Jon Davis (31:43):

Well of different things. Um, number one, there’s a large section on what we call climatology, climatology, meaning you know, what is the seasonal, like when does it start, when does it end, when is the peak period? And we do that on a global basis for the Atlantic basin, the East Pacific, the West Pacific, and also in the Indian ocean. And with that climatology, again, we did that with data analytics. And with that climatology, you know that climatology can be looked at for years. So this is a report that can be kept for a long time because it gives all the general specifics of each season in each area of the globe. Next, it’s really the forecast and we go through and we talk about the variables that will be important in determining what areas of the globe will tend to have a higher risk of tropical

Scott Luton (32:40):

or a lower risk of tropical activity. And just to give a little hint here, Scott, there’s some good news and there’s some bad news. You know, I love, love that you put that, but you know, if you look hard enough, there’s always some good news. And, and I’m really looking forward to this report. Hey, have y’all, have you coined it? The H sore? You know, cause we all love our acronyms and supply chain. If we shortened it just yet or is it still the full hurricane season outlook report?

Shehrina Kamal (33:13):

I think we’re still trying to figure out a catchy name for it. Um, you know,

Scott Luton (33:18):

we will take, we will take, yeah, we’ll take possibilities or Scottsville Hey Sharina same question. I mean it sounds like this, this report is going to be just chock full of really actionable insights and informative insights for a wide range of supply chain professionals and leaders. But what else sticks out to you?

Shehrina Kamal (33:40):

So first of all, the tropical storm season is coming regardless of whether we’re paying attention to it or not. I really hope our readers will be able to use the report to get a better sense of the forecast for this year season. Thanks for the work that John and his team has been doing. Um, and be able to assess where the highest impacts are from a supply chain perspective. I hope organizations will use this to proactively plan contingencies well before the tropical storm season starts.

Speaker 6 (34:06):

Hmm.

Scott Luton (34:06):

Absolutely. That proactive planning, uh, in a is planning arguably has never been as important, uh, as is right now. And that might sound like a naive statement, but I think once all the data comes in from the pandemic environment we’re in and um, and a lot of those hard assessments that have already started, but there’s still some gaps I think in a lot of the data, uh, from the pandemic environment. Um, so much more proactive planning is going to have to be done. All right. So let’s talk about, uh, Sharina I’m going to get you to weigh in here. What lessons should companies glean from covert 19 that they can apply here to really this new challenge set before them?

Shehrina Kamal (34:50):

Very simple. Expect the unexpected. No one saw a global pandemic coming, shutting down our everyday lives and integrated supply chain. So those that are doing relatively well and had early warning measures in place were able to react quickly. The same goes for tropical storms. So no matter how predictable the season may appear, each storm system and its individual intensities as well as impact can vary. So companies should really be prepared with contingency planning of course, but should also be ready to adapt where necessary.

Speaker 6 (35:23):

Hmm.

Scott Luton (35:23):

Excellent. John, how about you? Same question. Yeah, I think the thing that’s been the biggest surprise here to me is the fact is how vulnerable or fragile the supply chain has been. Um, issue arena said no one

Jon Davis (35:38):

expected this, you know, six months ago ago, but we certainly have found out in the last couple of months the kind of disruptions that we had globally and really how vulnerable the supply chain is out there. And I think as we look ahead to the tropical storm season, it’s really the things that are the most important thing are the surprises. There are certainly things the last couple of months that have been a surprise as the pandemic and the impacts have played out. There will be that also in the tropical season here upcoming and again as Sharina said, be ready for the surprises, the things that are unexpected because those are the items that at times can have some of the biggest impact.

Scott Luton (36:22):

Yeah, great point there. Okay, so I want to shift gears a bit here. John will stick with you for a minute because you know as from what I’ve been observing and tracking, it appears at risk. Pulse is really doing some big things, driving innovation and supply chain. So Hey look for the non data scientists like myself, I’d like to better understand a few components in the equation. So John, first up, how was the data gathered and use to determine the areas for, you know, the most tropical activity?

Jon Davis (36:54):

Well, what we do is there are large databases out there that cover tropical activity to a very specific degree. Those databases go back 50 years. There’s other databases that go back 100 years. So we can take that information of intensity. And tracks in exactly where a storm tends to hit an area or not. And then we can download that into our software. Then we can analyze that and this is kind of classic applied meteorology. We can look at that data and then do things with it. You know, we can talk about the things we discussed before as to the risk at specific locations around the globe. But we can also look at trends that are changing with time. You know, there have been some interesting trends in the last 10 or 15 years that are a little bit different than they used to be. And so some areas tend to have more or less risk because of that.

Jon Davis (37:56):

Um, and on a global basis, each of the main basins out there or whether it’s the Westpac, the most active hurricane area or tropical cyclin area in the world or the Atlantic, you know, in all of those areas you can get a pretty good idea of how things are changing with over time. So it really comes down to taking all the data out there and there’s many different sources for that data. Laying that data down, looking at specifics of tropical activity or you know, what water temperatures are as storms travel over them. And then comparing that in, relaying it here. Two different issues out there, you know, whether that’s chain issues, whether it’s areas impacts on land and different things like that. But it’s all comes down to data analytics.

Scott Luton (38:43):

Hmm. As often. So many things are these days. So you touched on this a little bit here, but what makes this data different than the day that that that is already out in industry?

Jon Davis (38:55):

Well, it’s really the integration of Azure coming up. So you can get databases where you look at tropical activity for example. It’s really what you do with that information. So I’ll give you an example. So from a forecasting standpoint out there, we can take the data of tropical activity and then overlay that with ocean water temperatures. You know, the fuel that storms tend to get overall. And then we can look at how that impacts overall storm development or how rapidly a storm tends to intensify. And we can integrate those data sets together to get a good idea from a forecasting standpoint as to what may happen in similar situations as we go through the next tropical storm season. And that information then can be relayed, you know, to the clients out there.

Scott Luton (39:47):

Hmm. Alright. So no spoilers here, right? We don’t want to give, give away the goods, but yeah, just give us a few teases a little bit here. John, what are some of these top places that you list in the 2020 hurricane season outlook report?

Jon Davis (40:02):

Sure. So from a standpoint of the top places kind of out there and some of the areas, so let’s take a look at airports. So we looked at all the airports via cargo and the number one airport in the globe, cargo wise, that has the highest risk of tropical activity. It’s Hong Kong. And so that is the number one airport out there from a standpoint of, you know, risk of cargo and interruptions here from a standpoint of, uh, during the tropical season. What’s interesting about that list, there is a U S airport in the top 10, of course, most of them in their West Pacific, but Miami is in the top 10 of the airports here ranked by cargo. And again, we’ll kind of finish up with a us situation. Um, you know, we did look at all the U S ports out there and we ranked them by tropical storm risk and certainly not a surprise, but the port or city with the highest risk of tropical activity. Lot of your listeners can probably guess this would be new Orleans in the Gulf of Mexico.

Scott Luton (41:08):

Hmm. Well I certainly hope they are spared, uh, after, uh, the recent challenge they’ve had there in recent years. Um, but really appreciate you sharing some of the, some of the, some of the things that folks can, can certainly glean from this report. Alright. So as we look to start to wrap up the interview on a wrap up on these last couple of questions here and Sharina we’ll start with you. Uh, how will global companies need to mitigate these hurricane risks moving forward in 2020 beyond what we’ve already kind of shared. Uh, and, and of course, if there’s one phrase that will be between my ears leaving this conversation, expect the unexpected, all our big brother. But you know how, how can global companies take the additional steps to mitigate these risks?

Shehrina Kamal (41:56):

So firstly, no where you operate, where you have supplier locations in which transportation modes and hubs you typically use, um, that can get deceptively easy sounding task. But many companies fall short inquiring this visibility. Secondly, make sure that locations and supply chain entities that are exposed to the storms have contingency plans in place. On a very basic level, consider this, do you have backup generators? Do you have communication mechanisms established if, uh, if the site is affected, do you know your inventory levels in any given location? On a more strategic level, consider questions like, do you have alternate suppliers in place? Should a critical supplier be affected? Do you have mechanisms in place to take a quick decisions on moving critical cargo in case you need to expedite shipments prior to a storm making landfall and finally monitor storm system movements in real time? The path can change frequently as we saw with hurricane Dorian last year. So keeping abreast of updated information will be necessary.

Scott Luton (42:58):

Yeah, good stuff there. Hey John. Uh, same question. How will global companies need to mitigate these hurricane risks moving forward in 2020?

Jon Davis (43:06):

Yeah, just really adding to Charania his comments. Again, it really is kind of keeping up and planning ahead, you know, for possible scenarios as we go through the season and as fast as things happen. You know, like even more so nowadays and it seemed like they used to be, if you have a plan going forward, let’s say if a system impacts the East coast of the U S or impacts the coastal areas of China, you’re that much better off from a standpoint of planning ahead of time and mitigating some of that risk here overall. And once you get in this season, if you have a good plan preseason, then it’s much easier to deal with those situations. And as we go through it really comes down to, you know, detecting or making a plan and then analyzing risks as we go through. And then having time to decide as an mitigate that risk as a tropical system is getting close to an area or impacting an area.

Scott Luton (44:11):

Yeah, great stuff there. You know that if you can, the more minutes or gosh, hours of time you can, you can add to make decisions that is such a luxury in today’s environment. Right John? Oh, no question. Absolutely. Absolutely. Okay. So Sharina before we make sure our audience knows how to follow with both you and John. So as the covert 19 recovery takes place, I know we all want to be in that, uh, that recovery phase as soon as we can, even if it is going to be presenting new challenges and, and a different new normal, you know, we want to get there soon. How should companies prepare their supply chain to mitigate the impact of tropical storms on their business beyond what you’ve already shared.

Shehrina Kamal (44:56):

So Scott recovery from coven 19 is something we should be cautiously optimistic about. As governments around the world ease restrictions on lockdowns and economies restart their engines. There’s a very real worry that a second wave of infections can undo all the great work that has gone into managing independently. So the situation is far from over. Organizations need to make sure they’ve got their eyes on developments on both fronts as we approach the start of the tropical storm season. And this can be done by combining supply chain data like locations of your suppliers, warehouses, ports and airports with tropical storm data as well as coven 19 case data as well as the lockdown and restrictions imposed by authorities. Organizations should also consider cross functional team setups across procurement, transportation compliance and business continuity to ensure that there is a cohesive and collaborative response in place as an organization to the disruptions.

Scott Luton (45:52):

Love that and you know, as as important as we have talked through today of um, using these insights from the report. And a lot of other, uh, data analytics that, um, that are out there that, that all your team provides and, and other than to protect supply chain operations is it’s equally, if not even a lot more important to take care of the supply chain workforce, whether that’s um, you know, protecting them and insulating them from the pandemic, uh, covert 19 conditions and environment or these natural disasters and hurricane season themselves and what they pose. So, um, you know, the tough times ahead for sure. Uh, and Sharina I like your point, made data-driven mind you about the second wave and, and the threat that that is not just here in the States but globally. Um, alright, so let’s make sure our audience knows how to reach back out to each of you and, and learn more about your respective organizations and the combined enterprise. So, so John, how can folks, you know, check in on risk pulse and also connect with you? Yeah.

Jon Davis (46:58):

On our website is [inaudible] dot com so real easy and all the information is on there and there’s a way to connect. So any questions anyone has, please feel free to reach out.

Scott Luton (47:12):

And John, we’ve got an upcoming webinar I think May 14th, that’s gonna offer some of the highlights of this report. Right,

Jon Davis (47:19):

right. So that will be next Thursday, 11:00 AM Eastern time. And um, yeah, so individuals can, it’ll be on our website, the

Scott Luton (47:30):

invitation so people can go out and they can sign up for the that and um, if you do have one invitation to that, then we can certainly send that to you and on the websites of either company, then you can go through there and get the sign up form here for that webinar. But yeah, it’ll be, um, a week from today, uh, May 14th at 11:00 AM Eastern outstanding. And, and having been a participant and a collaborator in a previous risk, Paul’s resilience, three 60 webinar, hope folks are bringing their, uh, legal pads called this chalk full of information that you want to capture and we’ll make it even easier. We’re going to put the direct link to the webinar in the show notes of this episode. So make it really easy for folks to plug in with that. Alright, so Serena, how can folks learn more about resilience risk 60 and connect with you

Shehrina Kamal (48:23):

so you can follow the resilience three 60 page on LinkedIn and Twitter for updates on our latest reports and insights. We’re also conducting weekly webinars on the coven 19 pandemic and its impact on supply chains, which you can sign up to on our website resilience three 60 dot the atrial.com and on a personal level, I’m also happy to connect with our listeners on LinkedIn.

Scott Luton (48:46):

Outstanding. Well, I really have enjoyed these conversations. Uh, so we, we made it through a lot of ground in a short amount of time, but really looking forward to the 2020, um, uh, hurricane, um, uh, seasoned Alec report and, and all the insights that law for so appreciate. Uh, your time today is so big. Thanks to our guests today. Sherina Kemal product director, risk intelligence with resilience three 60 and John Davis, chief meteorologists, meteorologist with risk pulse. Thanks so much for your time. Okay. So lastly to, to our audience, hopefully you’ve enjoyed this episode. As much as I have a lot of practical insights, actionable insights, and, and even more be included in the report we’ve talked about. I hope you can carve out some time to join us on May 14th for the webinar. I know, I will be. Um, so again, a big thanks to our guests. Thanks for our audience for tuning in. You know, lastly, be sure to check out our wide variety of industry thought leadership at supply chain now, radio.com fondness and subscribe wherever you get your podcasts from on behalf of the entire team. Scott Luton. Wish you a successful week ahead. Stay safe and know this broader days. Certainly lie ahead and we’ll see you next time here on supply chain. Now, thanks everyone.

Would you rather watch the show in action?  Watch as Scott welcomes Shehrina Kamal and Jon Davis to Supply Chain Now through our YouTube channel.

Shehrina Kamal leads Resilience360’s Risk Monitoring function, where she spearheads the solution’s risk identification, monitoring and alerting capabilities. In this capacity, she manages a global team of analysts and is responsible for product development & strategy, intelligence coverage, and strategic partnerships. Shehrina has 11 years of logistics industry experience and a background in international development consultancy and communication. She studied Economics at North South University, Bangladesh and holds an MBA from Mannheim Business School, Germany.

 

Jon Davis is based in Barcelona, Spain. Jon brings over 35 years of experience and is widely considered one of the foremost experts on the impact of weather and climate on global commodities (energy and agriculture) and supply chain logistics. After graduating from the University of Wisconsin-Madison with a degree in meteorology, he spent 18 years on Wall Street in the commodity divisions within Citigroup focusing on risk management in agriculture, energy, and the financial sectors. At the end of Jon’s tenure, he was Chief Meteorologist at Citigroup. At Citigroup, he was recruited by Chesapeake Energy in 2003 and spent 10 years as Chief Meteorologist responsible for monitoring global weather/climate and its impact on energy and agriculture. Since 2014, Jon has been Chief Meteorologist at Riskpulse.
In 2015, Jon was given the prestigious Award for the Outstanding Contribution to the Advance of Applied Meteorology at the national AMS (American Meteorological Society) meeting for a distinguished career in applying meteorological and climatological knowledge to the energy, industrial, and agricultural sectors. In 2017, Jon was awarded the Kenneth C. Spengler Award for outstanding vision to advance to role of meteorology in the new energy economy and outstanding leadership of the AMS Energy Committee and its conference. Jon was founding member and first chair of the AMS Energy Committee starting in 2004.

 

Scott W. Luton is the founder & CEO of Supply Chain Now. He has worked extensively in the end-to-end Supply Chain industry for more than 15 years, appearing in publications such as The Wall Street Journal, Dice and Quality Progress Magazine. Scott was named a 2019 Pro to Know in Supply Chain by Supply & Demand Executive and a 2019 “Top 15 Supply Chain & Logistics Experts to Follow” by RateLinx. He founded the 2019 Atlanta Supply Chain Awards and also served on the 2018 Georgia Logistics Summit Executive Committee. He is a certified Lean Six Sigma Green Belt and holds the APICS Certified Supply Chain Professional (CSCP) credential. A Veteran of the United States Air Force, Scott volunteers on the Business Pillar for VETLANTA and has served on the boards for APICS Atlanta and the Georgia Manufacturing Alliance. Follow Scott Luton on Twitter at @ScottWLuton and learn more about Supply Chain Now here: https://supplychainnow.com/

 

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