Risk Management Integrated Emergency Planning

An Emergency Risk Management Plan for a Large Supermarket in the UK

Emergency Planning in the UK

Risk Identification and Qualification

PESTEL Framework

Risk Identification Table

Risk Qualification Matrix

Risk Quantification

Disaster Management Plan

Situation Mapping of Hazards, Vulnerabilities and Impact

Vulnerability Table

Loss Estimation

Resource Inventory

Communication Management Plan

Monitoring Plan

This emergency management plan has been created for a large independent supermarket chain in the UK. The supermarket is comprised of six locations in total and all of the facilities have petrol facilities at each of the locations as well. Besides the locations themselves, the retail operation is entirely dependent on a well-developed supply chain in order to provide consumers with fresh food, supplies, and petrol. Therefore to maintain any level of operations, the entire supply chain and emergency supplier alternatives must be considered as well in this emergency management plan.

1.1 Emergency Planning in the UK

The UK represents a modern society with an economy that is heavily dependent on external sources for the importation of goods and services to maintain it living standards. Yet access to foreign resources also makes the population susceptible to a natural or man-made emergency situation. Not only could natural disasters such as an earthquake disrupt the flow of goods, but other factors, such as the state of the economy, must be include in a comprehensive plan. In fact, within the last few years many of the leading supermarket chains in the UK prepared an emergency plan in regards to many businesses going bankrupt due to the financial recession (Wood, 2008). If any of the primary suppliers would have ceased their operations then this would have left a big hole in their product mix that they could not easily fill.

2.0 Risk Identification and Qualification

Risk identification is determined by the possibility that the emergency will occur and the probability of the occurrence as well as the potential impacts that such a scenario may create. The various emergency scenarios may be classified under three different categories; natural, technological, and social. They may further be classified by utilizing a PESTEL framework; this includes political, economic, social, technological, environmental, legal, and natural.

2.1 PESTEL Framework

Political

Tariffs, Embargos, Sanctions

Economic

Double Dip Recession, Suppliers Going Under, the Debt Crisis in the EU

Social

Terrorism, Riots, Revolt

Technological

Failure of IT system, failure of infrastructure to preserve the freshness of perishable items

Environmental

Disease, Infected Goods, Pollution

Legal

Lawsuits from customers, lawsuits from suppliers, labor union issues

Natural

Earthquake, flooding, drought, climate change, blizzards

Figure 1 -- Risk Identification Table

Number

Class

Probability

Impact

1

Natural

Earthquake High: The UK rests atop a major fault line that could produce an Earthquake

High

The could disrupt all infrastructure systems

2

Natural

Medium: Extreme weather events are predict to become more common due the effects of climate change

High

3

Natural

Medium: Avian Flu or other similar outbreaks

Medium

4

IT

Medium: Failure of supply chain management IT system

High

Could make it difficult to obtain key resources from suppliers

5

Social

High: Terrorist Threats

Could target food supply or disrupt flow of goods

High

Would lose confidence of consumer base

6

Riots/Looting

High: Social inequality and mass demonstrations could result in loss of order

High

It might take weeks to repair damages and restock items

7

Political

Medium: Sanctions or tariffs

Sanctions, such as the one's currently placed on Iran, could potential disrupt the supply of resources

Low

It is unlikely that the supply chain could adapt to such an event.

8

Economic

High: Recession/Economic downturn

High

This could limit customers/suppliers in their ability to purchase/sell.

9

Legal

Medium: Lawsuits

Medium

The business has enough resources to fend most damages from lawsuits

10

Legal

Medium: Labor Union Issues

High -- A strike could shut down operations temporarily

Figure 2 -- Risk Qualification Matrix

Probability

High

1,5,6,8

Medium

3,9

2,4,10

Low

7

Impact

Low

Medium

High

3.0 Risk Quantification

Risk

Prob.

Impact

P*I

Strategy

1

Earthquake

4

6

24

Have risk mitigation plan prepared and practice frequently

2

Climate Change

5

6

30

Disruptions should be sometime into the future, follow the scientific development

3

Avian Flu

3

2

6

Work closely with suppliers and health official

4

IT

2

6

12

Major disruptions are unlikely but minor ones are more likely. Work with IT to develop mitigation strategy

5

Terrorism

4

5

20

Work out response strategy for food related terrorist acts.

Network with contractors and have a response plan in place.
7

Trade Disruption

2

3

6

Have alternative suppliers in place in the event of a trade disruption.

8

Recession

4

6

24

Could cause major financial impact. Diversify assets to minimize financial impacts.

9

Lawsuit

3

2

6

Could temporarily disrupt operating income.

10

Unions

4

6

24

In the event of a strike operations could cease entirely for a period of time.

4.0 Disaster Management Plan

A disaster management plan begins with the goal of mitigating the emergency as much as possible. Given that the grocery business provides consumer products that are vital to their well-being, in the event of a disaster the goal will be to provide these goods as effectively and as fairly as possible to ensure that local community can meet their needs.

4.1 Situation Mapping of Hazards, Vulnerabilities and Impact

Mapping the various factors that are involved with any potential risk can provide a clear overview of the mitigation strategies needed. In the event of an emergency, this tool can also serve as a quick dashboard for items that must be considered when things get hectic.

Figure 4 -- Vulnerability Table

Risk

Prob.

Human Impact

Property Impact

Grocery Impact

Internal Resources

External Resources

Total

1

5

5

5

5

2

5

27

2

5

3

3

3

3

5

22

3

3

4

0

3

1

5

16

4

3

1

4

4

5

3

20

5

3

4

4

4

4

5

24

6

3

3

5

5

5

5

26

7

2

1

1

2

1

3

10

8

4

4

3

4

2

5

22

9

2

1

4

3

1

4

15

10

3

5

1

5

5

1

20

5.0 Loss Estimation

Loss estimation is such a critical component of emergency preparedness that researchers are currently researching the topic and trying to create models that can access damages in real time (Eguchi, et al., 1997). However, this is an extremely difficult task because of the complexities involved in such efforts. However, if a loss estimation plan is prepared beforehand then it simplifies this process significantly. Even if modifications have to be made to the plan, it still expedites the process because the response team will not have to start from the very beginning. There are three primary categories of different types of losses; loss of life or injured people, the loss of physical capital and buildings, and economic losses or losses to revenue streams. Each of these categories can effect an organization in a variety of different ways.

6.0 Resource Inventory

Deterring what types of resources that must be mobilized immediately can also help expedite the response in the event of an emergency. Types of disasters may include natural disasters, social emergencies, or technological disasters. In the event of a natural disaster the most needed resources are those which sustain life such as food, water, shelter, medical services, etc. Many other resources may need to be mobilized afterwards; however these are the most immediate concerns. In the event of a social disaster, generally the most immediate resources will most likely be services from external organizations such as the police, firefighters, and ambulance or health care organizations. In the event of a technological disaster, the most immediate response will be from supply chain managers to mitigate the problems associated with any supply chain disruptions. Management should have a list of alternative processes or suppliers that can help fill needs in case of a technological disruption.

7.0 Communication Management Plan

A communication management plan will help response professionals by letting them know who needs to be contacted first in the event of an emergency. Without this information being prepared beforehand, response teams will try to piece together this information on the fly which can add considerable delays. Furthermore, it should not only consider who is to be contacted but also how they are to be contacted. In the event of an emergency there may be limited access to communication technologies and therefore having as many potential communication mediums mapped out ahead of time can also prevent delays in the response.

8.0 Monitoring Plan

A central monitoring crew should be initiated immediately to monitor the progress of the response. This allows for a team to have knowledge of the entire response effort so that they can coordinate different efforts effectively. Without centralization then the response can be fragmented and inefficient. Furthermore, there needs to be a source to be contacted to relay any relevant information to about other potential hazards that response team members might face.

9.0 Conclusion

In conclusion the supermarket should conduct a comprehensive emergency management plan to prepare it for future incidents with the criteria included in this preliminary report. It is highly likely that the organization will face some form of emergency in the future and thus preparation for a range of different possible emergencies can ensure…