If you are one of the millions of people that have watched Netflix’s new show “Stranger Things”, you’ll find a well-crafted supernatural sci-fi thriller drawing heavily from '80s movies and television. It just so happens to draw many parallels from how most companies act in the midst of a supply chain crisis.
While the odds of encountering a Demogorgon from another dimension are extremely low, the probability of your company experiencing a major supply chain incident in the next three years is guaranteed. From assembling a crisis management team to quickly mitigating a disruptive event’s impact, we explain how exactly Netflix’s hit show relates to a real life crisis.
Establish Roles and Guidelines for the Crisis Management Team
The “crisis management” team in Stranger Things is primarily made up of Will’s best friends: Michael, Dustin and Lucas. When Will goes missing, the team of friends quickly assembles and begins assessing the crisis. With no predefined roles, each of them takes on a specific task during this discovery phase. Unfortunately, the team has a hard time agreeing on the best course of action and momentarily dissolves into chaos. This mimics a typical response to a crisis, where a team is reactive when responding to crises. As such the crisis team emerges out of necessity with paltry risk management resources. Furthermore, there may be several groups within your supply chain group working on the same problem. In Stranger Things, Will’s family, Nancy, and the town sheriff have each discovered critical information on their own. If they hadn’t taken an entire season to combine efforts with Will’s friends, they would have resolved the issue much faster.
As a best practice for your own risk team, define roles and guidelines before crisis hits to maintain clear communications channels.
(Example of an improved 'Stranger Things' Crisis Management Team)
Prioritize Supplier Relationships and Multi-Tier Visibility
Suppliers are much like the show’s “Department of Energy” in that they spend most of the season trying to contain the disaster and mitigate their own risks first. When suppliers withhold information during crucial times of crisis, the customer suffers. An excellent relationship does not always provide transparency. A supply chain impact can grow in magnitude the longer a company stays in the dark, and the methods of discovery are not always illuminating. In ‘Stranger Things’, Will’s frantic mother Joyce resorts to using Christmas lights to find out more information, which is similar to combing the web for further reports on a natural disaster .
A best practice to improve supply chain visibility is to gain visibility into your supply chain by mapping out your multi-tier supplier sites. When monitoring a crisis, knowing those critical dependencies is crucial.
Centralize Risk Data to Reduce Discovery Time
While the boys searched for answers on their own, it is not until Eleven, a girl with mysterious powers and psychic abilities, arrives that they are able to develop a real plan to save Will. As in real life, a crisis management team can spend countless hours on discovery and research before they can begin to recover. Fractured data results in more time spent researching the scope and impact each time an event occurs. As such, this cuts into the time an affected company could be reaching out to suppliers, re-routing freight, and finding alternate sourcing. Maintaining a central repository of all risk data is critical to rapid crisis response. Furthermore, while a crisis team can pride itself on taking swift action, without full visibility they could be wasting time and resources. If the discovery phase reveals there is little impact on the company’s supply chain, the manpower alone could end up costing more than the revenue at risk from a potential impact.
Best practice is to adopt a PROACTIVE approach to events. Time spent on discovery is almost eliminated, and the severity and impact of downtime is minimized.
Prepare for a Black Swan Event
Much like the show’s terrifying monster dubbed the “Demogorgon”, a disruptive crisis is something that can appear out of nowhere, even with extensive preparation. In many respects, the wrath of the Demogorgon is akin to the unexpected disruption and latency to supply chains caused by events the world could not have predicted, also known as a Black Swan event. In Stranger Things, Nancy and Jonathan prepare for their final encounter with the Demogorgon by setting up booby traps, dousing the house in gasoline, and spiking their baseball bat with nails. Many companies have robust risk management programs, but when there are so many moving parts, it is important to be aware of the proper modes of preparation. There are always more effective, resilient ways of bolstering a risk response beforehand. The longer it takes to make proper preventative arrangements, the worse the outcome of a disaster can be than if there was adequate preparation.
Considering the inevitability of black swan events, or even just the imminent hurricane season, a best practice is to prepare for disasters through simulated events, creation of playbooks, and active discussions with suppliers.
Delayed Risk Response Leads to Worsened Consequences
As a result of the Department of Energy's aggressive (and sloppy) cover-up, Nancy's best friend Barbara inadvertently attracts the monster and is pulled into the alternate dimension known as the "Upside Down”. If Barbara had more details on this crisis, she would have had a better chance of avoiding further consequences by modifying her actions. As in Stranger Things, the longer companies take to contain the crisis the higher chance of negative consequences. Paying higher prices for critical parts, shipment delays, and loss of revenue can occur with more time spent in the discovery phase.
The faster companies can move out of the discovery phase, the sooner they can make key sourcing decisions before the market heats up.
Tying It All Together
While most companies will likely never be faced with fighting off a Demogorgon, it is likely that a major supply chain disruption will occur. Nevertheless, companies are able to gain a competitive advantage following a major crisis when they have created a crisis management team, implemented multi-tier supply chain mapping, gone through crisis simulations and centralized their risk data. When your supply chain risk management program is equipped with best-in-class supply chain visibility capabilities and 24/7 event monitoring, you will be able to quickly prioritize and mitigate impacted parts.
Feel free to reach us at email@example.com , if you are considering a risk management solution or have more questions on what it means to implement one in your organization.
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Projected Viewer Count: McAlone, Nathan. 10 August 2016. "Millions of people have already watched 'Stranger Things,' and it's one of Netflix's biggest hits" (http://www.businessinsider.com/stranger-things-netflix-ratings-2016-8)
Image credits: Stranger Things. Created by The Duffer Brothers. Perf. Winona Ryder, David Harbour and Finn Wolfhard, 21 Laps Entertainment and Monkey Massacre, 2016. Distributed by Netflix, 2016.