As the world becomes increasingly digitized, the demand for reliable and resilient utilities is higher than ever before. Outages can have a major impact on both businesses and consumers, so utilities must have a robust supply chain that can withstand disruptions.

There are a few steps that utilities can take to build a more resilient supply chain:

1. Review supplier contracts

Utility companies should review their supplier contracts to ensure that there are provisions in place for dealing with disruptions. This could include clauses specifying minimum service levels or alternate suppliers that can be used in the event of an outage.

This is especially true in situations where utilities are using a variety of energy sources, such as wind turbines, natural gas, and solar power. The now well-known Texas energy crisis of 2021, when the ERCOT grid went down in mid-February, is a perfect example. Several causes were pinpointed, but it should be a stark reminder of what can happen if the supply chain isn’t fully supported.

2. Work with local suppliers

Where possible, utilities should try to work with local suppliers who are less likely to be impacted by disruptions further down the supply chain. This will help to reduce the impact of any delays or outages.

3. Invest in technology

Utilities are under increasing pressure to invest in technologies that will improve the resilience of their supply chains. Some examples include:

Automated Systems

Automated systems can help to identify potential problems, track shipments, and locate areas that need additional support so that alternative arrangements can be made if necessary.

Blockchain

One promising area of investment is in blockchain technologies. Blockchain is a distributed database that can be used to track and manage transactions. This could be used to track the movement of goods and materials throughout the supply chain, making it easier to identify bottlenecks and disruptions.

Smart Contracts

Smart contracts are digital contracts that can automatically enforce terms and conditions. This could be used to automate payments and approvals throughout the supply chain, making it more efficient and reducing the risk of errors.

Supply Chain Tracking

Finally, utilities can also invest in tracking technologies that will improve the visibility of their supply chains. This includes sensors that can track the movement of goods and materials, as well as analytics platforms that can help to identify patterns and trends.

4. Improve communication

Good communication is essential for maintaining a resilient supply chain. All stakeholders should be kept up-to-date with plans and contingencies so that everyone is aware of what needs to be done in the event of a disruption.

5. Plan for disruptions

No matter how well a supply chain is managed, there is always the possibility of disruptions occurring. Planning for these contingencies will help to ensure that any impact is minimized.

Given the increasing frequency and severity of weather-related disruptions, utilities must take a proactive approach to ensure the continuity of their operations:

• Identify potential risks and vulnerabilities. This can be done by conducting a hazard analysis and developing a risk management plan.
• Place measures to mitigate the impact of disruptions once threats have been identified. For example, develop alternative sources of power, install backup generators, and establish protocols for restoring service after an outage.

By taking these steps, utilities can increase their resilience in the face of severe weather events, changing regulations, and growing calls for a change to renewable resources. In turn, the resilience of the supply chain helps utilities minimize the disruption of service to their customers.

Ensure a resilient supply chain for your organization. ScottMadden has extensive experience in supply chain consulting, providing clients with expert strategies. Let’s get the conversation started.