High-Tech Impact of Typhoon Haiyan … Who Knew?

In my own mind, I have divided major disasters, usually resulting from natural events, into two distinct categories: those that impact supply chains and those that do not. Many catastrophes, which have the highest tolls in terms of human lives lost, are tragic and painful, but they often don’t have much effect on global supply chains.

Two examples of this phenomenon that come to mind are the Indonesian tsunami of December 24, 2004 with its huge count of over 230,000 dead, and the Port-of-Prince earthquake, which struck Haiti’s capital on January 12, 2010, with estimates of those killed ranging from 100,000 to over 300,000. The biggest tsunami hits were Indonesian vacation areas where the predominant industries are fishing and tourism. And Port-of-Prince is a poor city with little international industry. As a point of information, the Indonesian tsunami reached as far as India and I know of a case where the ocean surge came within 500 yards of a major software development facility.

On the other hand, some catastrophes have had major impact on supply chains, some with relatively low loss of life. The tsunami that hit the coast of Japan in March 11, 2011 was also tragic in its cost of human life, reportedly killing some 16,000 persons, but it also resulted in the destruction of the Fukushima nuclear power plant and many factories, some of which were primary sources for products supporting the auto and other industries. The floods in Thailand in the latter half of 2011 fortunately had relatively few casualties, but significant property damage. Factories that were major suppliers of electronic components, particularly hard drives, and manufacturers involved in automobile production were taken out for extended periods.

Of course, local and regional supply chains serving affected areas will regularly be disrupted when disasters occur. Having gone though Superstorm Sandy that tore through the U.S. north-eastern coastal areas at the end of October 2012, I am very much aware of how supplies of fuel, electricity, etc. can be disrupted within minutes and be out-of-action for weeks, months, and even years.

There is essentially no rhyme nor reason to these global tragedies. They occur with little or no warning and can have devastating effects on people’s lives and economic activity. But, in trying to understand the reach of their impact, we try to categorize such events as those that hit specific areas and those that affect world trade. And so, when Typhoon Haiyan ripped into the Philippines in early November 2013 and videos of the horrendous devastation appeared, the impression given was that the population affected consisted mostly of subsistence farmers. It was a surprise, therefore, to learn that among the destroyed facilities, there were call centers, which many of us have likely used. In the November 26, 2013 Associated Press article   “Typhoon ruined traditional, high-tech livelihoods,” available at http://enews.earthlink.net/article/top?guid=20131126/719fcb4b-844c-40f1-850b-64306014723c  we learned that a “call and data center” in the town of Palo was soaked and computers were destroyed. An interesting comment followed … “Bosses visiting from Manila ordered hard drives of some 1,000 damaged computers destroyed to protect confidential data of clients mostly in the U.S.” As someone with an infosec viewpoint, I have to wonder how well the data were protected in the first place and whether there was anyone with security responsibility onsite. Also, is this another justification for storing data in the cloud?

In another cited case, a billing-service company, called Accudata, an affiliate of Australia-headquartered CoreData, had offices in Leyte and claimed that it will take a year to restore the office. CoreData US services U.S. financial firms out of New York. Again, there are likely to be security consequences relating to the damaged facility.

One of the major issues relating to supply-chains and outsourced services is that the end-user organization is often not fully aware of all the locations and dependencies of the products and services that they are using globally. They are unlikely to have checked on how they might be impacted by catastrophes occurring in specific regions. The article quoted above seems to indicate that affected companies have Manila-based facilities and that the functions that have been destroyed, and the individuals performing those functions, could be moved to Manila. Maybe so, but a number of workers expressed reluctance to move for personal reasons.

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