This document provides an overview of a course on Disaster and Value Management. The course covers basic concepts of disaster risk management, identifying different types of disasters, assessment tools, planning procedures, implementation, monitoring and evaluation. It is taught by Zerihun Yohannes and covers topics such as understanding hazards and disasters, disaster risk theories and models, disaster risk management models, hazard and vulnerability assessments, and value chains. Common hazards in Ethiopia discussed include drought, flood, and volcanoes. Key concepts explained are disasters, risks, hazards, vulnerability, and the disaster risk equation.

1. Disaster and Value Management
Course description:
The course deals with the basic concepts of DRM, identify a range of
disasters, assessment tools, planning procedures & techniques:
implementation, monitoring & evaluation
Course code: PPM 542
Zerihun Yohannes (PhD)
Asst. Prof. in Env.Mgt., Institute of Disaster Risk
Management and Food security studies
BahirDar University
August, 2018

2. Course content
1.Understanding Hazards & Disasters
2.Disaster/Disaster Risk Theories & Models
3.Disaster Risk ManagementModels
4.Hazard/Disaster Risk/Vulnerability Assessment
5.Value chain

3. Understanding Hazards & Disasters
1.Concepts & Classifications of Hazards
2.Distribution of Common Hazards in the
Globe 3.Characteristics of Hazards

4. The Concept of Hazards
• A potentially damaging
event, phenomenon
physical
or human
activity, which may cause the loss of
life or injury, property damage,
social & economic disruption or
environmental degradation
• Some examples of hazards are
earthquakes, volcanic eruptions,
cyclones, floods, landslides, droughts,
& other such events.

5. Hazards Classification
1. Natural Hazards: Natural processes or phenomena occurring in
the biosphere that may constitute a damaging event
• Natural hazards can be classified according to their geological,
hydro-meteorological or biological origins
• Natural hazards comprise phenomena such as earthquakes; volcanic
activity; landslides; tsunamis, tropical cyclones & other severe storms;
tornadoes & high winds; river floods & coastal flooding; wildfires &
associated haze; drought; sand/dust storms; insect infestations

6. Classification of hazards cont….
2. Anthropogenic hazards: These are human induced
processes or phenomena occurring in the biosphere that may
constitute a damaging event.
• These hazards are the consequences of human activities
which may cause loss of life or injury, damage to property,
social & economical disruption or environmental
degradation
• Examples of human-made hazards mostly include
Technological hazards: such as the toxicity of pesticides to
fauna, accidental release of chemicals or radiation from a
nuclear plant. These arise directly as a result of human
activities.

7. Anthropogenic Hazards Cont…
•Another classification includes quasi-natural hazards that arise
through the interaction of natural processes & human activities.
• Environmental degradation(ED) is partly due to processes
induced by human behavior & activities in a way (sometimes
combined with natural hazards)
• ED damages the natural resource base or adversely alters
natural processes or ecosystems. E.g.. desertification

8. Origin PHENOMENA /EXAMPLES
Hydro-meteorological hazards
Natural processes or phenomena
of atmospheric, hydrological or
oceanographic nature.
•Floods, debris & mudflows
• Tropical cyclones, storm surges, wind,
rain & other severe storms, blizzards, lightning
•Drought, desertification, wildfires, temperature
extremes, sand or dust storms
•Permafrost, snow avalanches
Geological hazards
Natural earth processes or
phenomena that include processes
of endogenous origin or tectonic
or exogenous origin, such as mass
movements.
• Earthquakes, tsunamis
• Volcanic activity & emissions
•Mass movements, landslides, rockslides
liquefaction, sub-marine slides
• Surface collapse, geological fault activity
Biological hazards
Processes of organic origin
those conveyed by biological
vectors, including exposure to
pathogenic micro-organisms,
toxins & bioactive substances.
Outbreaks of epidemic diseases, plant
or or animal contagion & extensive infestations
Classification of Natural Hazards

9. Origin Phenomena/Examples
Technological Hazards
Danger associated with technological or
industrial accidents, infrastructure failures or
certain human activities which may cause the
loss of life or injury, property damage, social &
economic
degradation,
disruption or environmental
sometimes referred to as
anthropogenic hazards.
•Industrial pollution, nuclear
release & radioactivity, toxic
waste, dam failure, transport,
or technological
(explosions, fires,
industrial
accidents
spills).
Environmental Related Hazards
Processes induced by human behavior &
activities (sometimes combined with natural
hazards) that damage the natural resource base
or adversely alter natural processes or
ecosystems. Potential effects are varied & may
contribute to an increase in vulnerability & the
frequency & intensity of natural hazards.
Examples
degradation,
include land
deforestation,
desertification, wild fires, loss
of biodiversity, land, water &
air pollution, climate change,
sea level rise & ozone
depletion.
Classification of Anthropogenic Hazards

10. Natural Hazards Vs. Disasters
• A disaster is the result of the impact of a natural or human
made hazard on a socio-economic system with a given
level of vulnerability, which prevents the affected society
from coping adequately with this impact
• Natural hazards themselves do not necessarily lead to
disasters
• It is only their interaction with people & their environment
that generates impacts, which may reach disastrous
proportions

11. More Hazard Terminology….
1. Secondary hazards
• These are hazards that follow as a result of other hazard
events
• Examples of secondary hazards are:
Building collapse; Dam failure ; Fire; Hazardous material spill;
Interruption of power/ water supply/
transportation/ waste disposal; Landslide;
communication/
Soil liquefaction;
Tsunami (tidal wave); Water pollution…

12. 2. Chronic hazards
• A group of hazards that do not stem from one event but
arise from continuos conditions
• e.g., famine, resource degradation, pollution, & large-
scale toxic contamination, which accumulate over time

13. Hazard types & their contribution to deaths, 1900–1999

14. Deaths during disasters, listed by cause, 1900–1999
The Great Leap Forward famine in China (1958–1961), & then low estimates put
the number of deaths at 13 million & higher ones at up to 30 million or more

15. Total number of reported natural disasters between 1900 & 2015
Source: Author‟computation from EM-DAT: OFDA/CRED International
Disaster Database-www.emdat.be

16. Source: UNISDR 2016

17. Source: UNISDR 2016

18. Common Hazards in Ethiopia
Drought
Droughts are aweather-
related natural hazard,
which canaffect vast
regions for months oryears
- have asignificant impact
on acountry‘s economic
performance, particularly
food production.
-Contributed about 48.8%
of Nationally reported
lossesof lives (NRL)(1990-
2014)

19. Common Hazards in Ethiopia Cont…
Flood
Flooding is usually the
result of heavy or
continuous rain that
exceedsthe absorptive
capacity of the soil & the
flow capacity of rivers,
streams & coastal areas.
Typesof Flood :Riverflood,
Flashflood, Coastalflood
-contributed 38.9 %of NRL
1990-2014

22. Common Hazards in Ethiopia Cont…
Volcanoes
A volcano is an opening, or rupture, in the
planet’s surface or crust, which allows hot,
molten rock, ash & gases to escape from deep
below the surface.

23. Basic concepts in DRM
 A disaster happen only when a hazard meets a vulnerable
situation or people.
 People are vulnerable when they are unable to adequately
anticipate, withstand & recover from hazards.
Vulnerability refers to the characteristics of a person or a group
& their situation that influence their capacity to anticipate, cope
with, resist & recover from the impact of a hazard.
There are many aspects of vulnerability arising from various
physical, social, economic, & environmentalfactors
E.g. poor design & construction of buildings, inadequate
protection of assets, lack of public information & awareness

24. • Risk:is acombination of the probability of occurrenceof
events & their negativeconsequences.
• ―potential losses‖ for some particularcause, place &
period.
• people do notnecessarily share the sameperceptions of
the significance & underlying causesof different risks.
• a disaster is afunction of the risk process.
• It results from the combination of hazards, conditions of
vulnerability & insufficient capacity or measures to reduce
the potential negative consequencesofrisk.
• Disaster risk (R) =Vulnerability (V) X Hazard (H)/Capacity
(C)
Basic concepts in DRM …

25.  Definitions of risk are commonly probabilistic in nature, relating
either to:
 (i) the probability of occurrence of a hazard that acts to trigger a
disaster or series of events with an undesirable outcome, or
 (ii) the probability of a disastrous outcome, combining the
probability of the hazard event with a consideration of the likely
consequences of the hazard (Smith, 1996; Stenchion, 1997; Downing et al., 2001;
Brooks, 2003;Jones & Boer, 2003).
Disaster Risks

26. Disaster Risk Equation
Disaster Risk = Hazard (H) x Vulnerability (V)
Capacity (C)
OR
Disaster Risk = f(H & V / C)

27. Disaster Risk Cont...
It is:
• the likelihood of some kind of harm (illness, injury, death,
property & environmental damage, disrupted lives &
livelihoods)
• due to the interaction between hazards & conditions of
vulnerability.
• Risk = H x V x elements at risk/capacity

28. Disaster Risk Cont...
• Disaster risk is also
increased by vulnerability…
the conditions & processes
that increase the susceptibility of
a household, community or area
to the impacts of a hazard

29. Disasters are a complex mix of natural hazards & human
action.
Human livelihoods are often earned in locations that combine
opportunities with hazards. E.g. flood plains provide „cheap‟ flat
land for businesses & housing also causes disaster risk.
Basic concepts…

30. The Crunch model shows that a disaster happens only if a
hazard meets a vulnerable situation.

32. DRM con’t…
• Acc. to UNISDR (2009), a disaster is defined as:
• a serious disruption of the functioning of society,
causing widespread human, material or
environmental losses & impacts
• which exceeds the ability of the affected
community to cope using only its own resources
.

33. Paradigm Shift in Disaster Risk Management
Managing hazard events Managing disaster risks
Primary focus on
Relief & Response
Primary focus on reducing
disaster risks & prompt
Sustainable development
From T
o
Disaster/emergency
management
Disaster Risk Management

34. DRM cont..
Disaster Risk Management is an organised action on:
Disaster event
Pre-disaster or ...’proactive’
activities
Prevention Mitigation Preparedness
Relief/response
r
Post-disaster o
‘ ‘reactive’
Recovery/
rehabilitation

35. DRM Cont…
• In all of the stages, DRM includes a range of activities that
contribute to:
• increasing capacities & reducing immediate & long-term
vulnerabilities to prevent, or at least minimize, the
damaging impact in a community.
• DRR is the conceptual framework of elements considered
with the possibilities to minimize vulnerabilities & disaster
risks throughout the society,
• to avoid (prevention) the adverse impacts of hazardous
events within the broad context of Sustainable Development

36. DRR cont…
• DRR framework is composed of the following fields of actions:
 Risk awareness & assessment (hazard,
vulnerability/capacity)
 Knowledge development (education, training, research, &
information)
 Public commitment & institutional frameworks
(organizational, policy, legislation, & community actions)
 Application of measures (environmental management,
land use planning, protection of facilities, application of
science & technology, partnership & networking, &
financial instruments)

37. Disaster Risk Management Approaches
1. Prevention
 Measures designed to provide permanent protection …
or reduce the intensity of a hazardous event to a level that
does not cause a disaster…
 Covers activities designed to impede the occurrence o
f
a disaster event and/or prevent such an occurrence from
having harmful effects on communities & facilities.
 E.g. Safety standards for industries, flood control
measures,& land use regulations.
 Poverty alleviation & assets redistribution schemes such
as land reform, provision of basic needs & services such as
preventive health care, education, etc…

38. Major Characteristics of Disasters
• There is an important distinction between an event & a
disaster. Not all adverse events trigger disasters;
• There is no such thing ‘natural disaster’ but there are
natural hazards
• Disasters are described by socio-economic &
environmental consequences of adverse events.

39. Characteristics Cont…
• Disasters may be sudden onset or
‘creeping’ in nature.
– Sudden/fast/abrupt onset (disasters triggered
by earthquake, volcano, tsunami, flood,
tornado…)
– Creeping/slow/steady onset disasters
(disasters triggered by drought, famine, AIDS
epidemic, land degradation…)

40. Characteristics Cont…
• Disasters are not always limited to a single
hazard. Sometimes two or more completely
independent disasters occur at the same time.
• Disasters can be categorized into international,
national & local disasters based on the scale of
response required to manage its adverse
consequences.

41. Characteristics of disasters
Flood X Poorly
constructed
house
=
Life & Property
damage
Vulnerability Disaster
X =
Hazard/
Disaster Risks
Drought X
Crops that
depend on
rainfall
= Life loss

42. Key Concepts & Terminologies
• Hazard
• Disaster
• Vulnerability
• Capacity
• Exposure
• Susceptibility
• Disaster Risk
• Response
• Recovery
• Risk Mitigation
• Prevention
• Preparedness
• Disaster Risk Management
• Disaster Risk Reduction
• Adaptation
• Resilience /Resilient

43. Group Discussion
• Discuss DRR practices that are taking place within
your area
• Were their shortcomings if you evaluate them within
the lens of the current thinking of disaster risk
management?

44. 2. Disaster/Disaster Risk Theories and Models

45. Importance of Theory in DRM
• Before developing any disaster management plan, it is
important to understand what a disaster is and what the risks
of disaster in a particular place.
• Theory/Models: help to enhance our understanding through
simplifying complex and often interrelated phenomena.
• The Pressure and Release model (PAR model):
• The Access model
• Related-theories
- Resilience Theory
- Normal Accident Theory
- Chaos theory

46. 1. The Pressure and Release model (PAR model)
• A simple tool for showing how disasters occur when
natural hazards affect vulnerable people
• The basis for the PAR idea is that a disaster is the
intersection of two opposing forces:
 processes generating vulnerability
 the natural hazard event (or sometimes a slowly
unfolding natural process)
• The PAR model suggest that the hazard event is isolated and
distinct from the conditions which create vulnerability.

48. Vulnerability
• Vulnerability is the degree to which someone or something
can be affected by a particular hazard and depends on a
number of factors and processes:
physical (unstable locations, closer proximity to hazards,
fragile unprotected houses).
economic (no productive assets, limited income earning
opportunities, poor pay, single income revenue, no savings
and insurance).
social (low status in society, gender relations, fewer
decision-making possibilities, oppressive formal and
informal institutional structures, and political, economic and
social hierarchies).

49. Vulnerability
• The conditions determined
by physical, social,
economic, and
environmental factors or
processes, which increase
the susceptibility of a
community to the impact of
hazards.

50. Vulnerability
• Definition of Vulnerability- Exposure to risk and stress
and the lack of ability to cope with the consequences of
risk
• It is important to distinguish between the symptoms
and the causes of vulnerability

51. Vulnerability Is Not Static
Root
causes
Dynamic
pressures
Unsafe
conditions
Progression of vulnerability
Disaster
Hazards

52. s
of
fe
Processes and activitie
that ‘translate’ effects
root causes temporally
and spatially into ‘unsa
conditions’
E.g: Rapid urbanization,
violent conflict, foreign
debt and structural
adjustment programs,
rural-urban migration,
Disease outbreaks, etc..
Dynamic Pressures Unsafe Conditions
How the vulnerability of
population is expressed
in conjunction with
a hazard
- Living in hazardous
locations
-Being unable to afford
safe buildings
- Engaging in dangerous
livelihoods
Root Causes
Economic
Social
Demographic
Political/ideological
processes that affect
allocation, utilization
& distribution of
resources
The function of the
state and distribution
of power
 Natural conditions

53. Vulnerability Triggering Factors
• One needs to consider not just the fact that people live
in flimsy houses in hazardous locations (e.g. flood prone
areas),
• but why they live there, which could be the product of
such forces as:
– Poverty
– Rapid & unplanned urbanization;
population growth
– displacement due to economic
development
– Environmental degradation
– Climate change

54. Cont…
Poverty
Disasters hit poor people the hardest
53% of affected people by disasters
live in developing Countries
Over 95% of the people killed by
disasters lived in middle and low-
income countries,
Extensive research shows the poor
are more likely to occupy dangerous,
less desirable locations,
An estimated 1 billion people
worldwide live in slums and shanty
towns,
which are vulnerable to disasters.

55. Cont…
Environmental
degradation
Communities can all too often
increase the probability and severity
of disasters by destroying the
forests, coral reefs and wetlands that
might have protected them.

56. Cont…
Rapid & unplanned
urbanization
An estimated 1 billion people worldwide live
in slums and shanty towns, which are
vulnerable to disasters.
Significant proportion of the urban population
lives in marginal settlements or crowded
slums with inadequate access to clean water,
sanitation, schools, transport and other public
services

57. Cont…
Climate change
Increased drought will lead to
land degradation, Crop damage and
reduced yields; livestock deaths and
wildfire risks will increase, and
people dependent on agriculture will
face food and water shortages,
malnutrition and increased disease,
with many being forced
to migrate.

58. Cont…
• Legal/political issues, such as
– lack of land rights;
– discrimination;
– government macro-economic and other
policies; and
– other political features, such as the failure of
government and civil society institutions to
protect citizens.

59. Cause and effect in the Disaster Pressure model
• The most important root causes that give rise to
vulnerability (and which reproduce vulnerability over
time) are economic, demographic and political
processes.
• These affect the allocation & distribution of
resources, among different groups.
• Root causes reflect the exercise and distribution of
power in a society.
• Dynamic pressures are processes and activities that
‗translate‗ the effects of root causes both temporally and
spatially into unsafe conditions.

60. contemporary
• These are more
conjunctural manifestations of general
or immediate,
underlying
economic, social and political patterns.
• Dynamic pressures channel the root causes into
particular forms of unsafe conditions that then have to
be considered in relation to the different types of
hazards facing people.
• These dynamic pressures include epidemic disease,
rapid urbanisation, current (as opposed to past)
wars and other violent conflicts,

61. Conceptual frame-works of vulnerability:
The Double Structure of Vulnerability
Vulnerability: external- and internal
side;
External side relates to: exposure to
risks and shocks
PEA:e.g. social inequalities, assets control
by upper classes;
HEP: population dynamics and capacities
to manage the environment
ET: relates vulnerability to the incapacity of
people to obtain or manage assets via
legitimate economic means
Internal side relates to :capacity to
anticipate, cope with, resist and
recover from the impact of a hazard
C&CTh: control of assets and resources,
capacities to manage crisis situations and
resolve conflicts ;
ATA: how people act as react freely or as a
result of societal, economical or
governmental constraints;
MAA: mitigation of vulnerability via access
to assets.
Bohle’s conceptual Framework for
vulnerability analysis.

62. Vulnerability and its components (Cannon, 1994:21)

63. Applications of the PAR model
• Served as the basis for community based self-study of
vulnerability and capability
• communities and groups adopt the concept of vulnerability
to inquire into their own exposure to damage and loss
(Wisner 2003a).
• The concept of vulnerability thus became a tool in the
struggle for resources that are allocated politically. In
some parts of Latin America and southern Africa.
• such community-based vulnerability assessment has
become quite elaborate, utilising a range of techniques to
map and make inventories, seasonal calendars and
disaster chronologies

64. 2. The Access Model
• It is an expanded analysis of the principal factors in the PAR
model that relate to human vulnerability and exposure to
physical hazard.
• Focuses on the process by which the natural event impacts
upon people and their responses.
• It is a more magnified analysis of how vulnerability is
initially generated by economic, social and political
processes, and what then happens as a disaster unfolds.
• The Access model indicates more specifically and in more
detail how conditions need to change to reduce vulnerability
and thereby improve protection and the capacity for
recovery.

65. Access model…
• Capacity may include physical, institutional, social or
economic means as well as skilled personnel or collective
attributes such as leadership and management.‖

66. 3. Related theories: Resilience Theory
• Resilience is derived from the Latin word resilio, meaning
‗tojump back‗ (Klein et al., 2003).
• ‗Resilience‘ wasselected the global development buzzwordof
2012 by an aid industry website
• The term is applied in a number of fields, especially
disaster management
• The adoption of the Hyogo Framework for Action 2005–
2015—also known as ‗The Hyogo Declaration‗—by the
United Nations International Strategy for Disaster Risk
Reduction (UNISDR) is a positive move in underscoring
the concept.
• attention is on what affected communities can do for
themselves and how best tostrengthen them

67. Resilience theory….
• The concept of resilience helps us to obtain a complete
understanding of risk and vulnerability.
• It fills a void by addressing the ‗soft perspective‗ of vulnerability
and allows us to rethink the prevalent ‗risk = hazard x
vulnerability‗ equation.
Source: Béné/Wood/Newsham/Davis2012

68. …
• When referring to people, the essence of resilience centres on
quick recovery from shock, illness or hardship.
• A person who bounces back—unchanged—from exposure to
stresses and shocks (Vickers & Kouzmin, 2001).
• Disaster resilience is seen as the ‗shield‗, ‗shock absorber‗ or
buffer that moderates the outcome to ensure benign or small-
scale negative consequences.
• Indeed, the goal of disaster risk management is to guarantee
minimal loss of life and livelihoods and to allow the affected
community or system to return to ‗normal‗ within the shortest
possible time.

69. Capacity
• It is the combination of all the strengths and resources
available within a community, society or organization
that can reduce the level of risk or the effects of
disaster.
• It may
economic means as
collective attributes
well as skilled personal
such as leadership
include physical, institutional, social, or
or
and
management.

70. Capacity cont…
• Ability of an affected community to deal with a hazard
• Existing coping mechanisms
• Indigenous knowledge
• Resilience of a community
• Expressed in terms of:
– social (the family),
– political (decision-making ability),
– economical (wealth) and
– environmental (biodiversity, conservation and natural
resource) aspects

71. Resilience
• The capacity of a system , community or society potentially
exposed to hazards to adapt by resisting or changing
order to reach and maintain all acceptable level of
functioning and structure.
• This is determined the degree to which the social system is
capable of organizing itself
• to increase its capacity for learning from past
disasters for better future protection and to improve
risk reduction measures.

73. Resilience Cont…
• The ability of a person or a group to anticipate, cope
with, resist, and recover from the impact of a
hazard/disaster.
• Resilience refers to a person‗s or a community‗s ability
to bounce back or recover after adversity or hard
times, and to be capable of building positively on these
adversities.

74. Cont …
• Resiliency often is related to 3 different characteristics:
– The magnitude of the shock that a HH or community
can absorb and remain viable
– The degree to which the HH or community is capable
of self organization after the exposure to the hazard
to maintain an acceptable level of functioning and
structure
– The degree to which a HH or community can learn
from these difficult circumstances and adapt

75. Cont…
• In a resilient HH or community, change has the potential to
create new opportunities
• Vulnerable HH and communities have a propensity to suffer
from exposure to external shocks and stresses because they
are sensitive to such exposures
• Adaptive capacity is an aspect of resilience--it reflects
learning, flexibility and the development of generalizable
responses to a broad range of challenges

76. Cont…
• Community resilience refers to ―individual and collective
capacity to respond to adversity and change‖[2]
• When a community is resilient, it can ―respond to crises
in ways that strengthen community bonds, resources,
and the community‗s capacity to cope‖[3]
2Healy, K., Hampshire, A. & Ayres, L. (2003). Engaging communities for sustainable change: Promoting
resilience. Available on-line:www.bensoc.org.au/research/engaging_communities.
3Chenoweth & Stehlik cited in Healy, K., Hampshire, A. & Ayres, L. (2003). Engaging communitiesfor
sustainable change: Promoting resilience. Available on-line:
www.bensoc.org.au/research/engaging_communities.html

77. Measuring vulnerability/resilence.
 Different types of vulnerability: physical, social, economical,
environmental;
 Different levels of scale. Different levels of scale require
often different methods.
E.g. in the analytical models the data requirement
increases with more complex methods;
 Different hazard types. Not all methods of vulnerability
quantification are used for the different hazard types.
 Different hazard intensities & indicators for hazard intensity.

78.  Vulnerability indices:
 based on indicators of vulnerability; mostly no direct relation with the different
hazard intensities. These are mostly used for expressing social, economic and
environmental vulnerability;
 Vulnerability table:
 the relation between hazard intensity and degree of damage can also be given in a
table.
 Vulnerability curves:
 that are constructed on the basis of the relation between hazard intensities and
damage data
 Relative curves: they show the percentage of property value as the damaged share of
the total value to hazard intensity.
 Absolute curves: show the absolute amount of damage depending on the hazard
intensity; i.e. the value of the asset is already integrated in the damage function;
 Fragility curves:
 provide the probability for a particular group of elements at risk to be in or exceeding
a certain damage state under a given hazard intensity.

80. Methods of Measuring physical vulnerability

81.  Key characteristics of vulnerable groups in society are
social class, caste, ethnicity, gender; disability; age
and seniority.
 Gender and vulnerability
 Gender is a cross cutting issue which can qualify all
vulnerability dimensions.
 Unequal gender relations arising from patriarchal
structures can create new vulnerabilities or worsen
existing ones for women and girls in disasters.
 Men and women have different entitlements/access to
resources and abilities to reduce their vulnerability
through various coping and adaption practices

82.  The concept of resilience helps us to obtain a
complete understanding of risk and vulnerability.
 It fills a void by addressing the ‗soft perspective‗ of
vulnerability and allows us to rethink the prevalent
‗risk = hazard x vulnerability‗ equation.

83. 3. DRM approaches: a review
1. Sustainable Development approach
• SD multi-dimensional approach that highlights
the current needs and future limitations that
have direct relationships with disaster risks and
its pillars.
• As disasters cause harm and damage to people,
property, infrastructure, economies & the
environment, the goals of sustainable development
will be indanger
• Disaster recovery & rehabilitation efforts require
enormous funds  harmdevelopment

84. • Therefore, it is important that disaster
prevention/mitigation programs be an integral part of
developmental program
• efforts to enhance the capacities of communities
should cope with systems at various levels and
sectors towards self-reliance and self-sufficiency in
managing disasters effectively.
(human, social, economic,
& identifying various types of
and
• Understanding
vulnerabilities
environmental) as well as the nature of natural
hazardsare essential components of suchefforts.

85. • The SD view can facilitate the adoption
program at level that incorporates
of DRR
the
local
both structural & non-structural
application of
measures
• This protects population natural
susceptibility to
development designs &
hazards through better
efforts that enhance early warning & forecasting
systems.
• As a result, investments & efforts for social &
economic development can be protected & sustained
through this approach.

86. • Thekey strength of this approachis:
• The need to enhance the capacities of communities &
coping strategies at various levels & sectors towards
self-reliance & self-sufficiency!

87. 2. Disasters are human-made not natural (
Development failure)
• The characteristics of a disaster became more
associated with its physical impact than with the
natural hazard.
• Interest grew in the design and implementation of
ways to mitigate losses through physical and
structural measures to reduce hazards or to increase
the resistance of structures.
• Natural disasters are intimately connected to the
processesof humandevelopment.

88. • Natural hazards like tropical storm & earthquakes,
however intense, inevitable or unpredictable,
translate to disasters only to the extent that the
society is unprepared to respond & unable to cope,
and consequently, severelyaffected.
• Disasters triggered by natural hazards put
development gains at risk. At the same time, the
development choices made by individuals,
communities & nations can pave the way for unequal
distributions of disasterrisks.

89. • When disaster events happen, whether causedby
natural phenomena or human activities, is believedto
be adisaster asif the community or society affected
fails to cope (that is adevelopmentfailure).
• Thus, the vulnerability
assets to the impact
of communities and their
of natural hazards is to a
significant extent determined by human action or
inaction.
• Even the occurrence of recent climatic anomalies
attributed to global climate change is traced to
human activities as the emission of unmanaged and
extremely high green house gases(CO2,methane…).

90. • This school of thought sees disasters as the collapse
or failure/inadequacy of development activities &
the result of human activities that exacerbate the
existing natural hazards
• Therefore, disasters are essentially human-made as
development failure
• This notion of disasters as principally human-made
and not attributable to outcome presents a challenge
to practitioners to reconsider the common use of
―natural‖ and ―human-made‖ in typifying disaster
incidents.

91. • disasters can be prevented or their impact on peoples
& communitiesmitigated,
• & that human action or inaction to high risk &
vulnerability to natural hazards could spell the
difference!

93. 3. DRMcycle
• It is a concept applied in an integrated approach
towards a disaster event in which the management
cycle can be carried out through a sequence of
activities/ phases, each being responsible or designed
to address aspecific type ofintervention

95. • The relationship between relief & development as a
cycle reinforces the fact that disasters, however
inevitable, could be managed through adequate
planning and preparedness for response
• According to this paradigm, integrating the 4 aspects
into all parts of the development process contributes
to sustainable development & lessens post-disaster
loss of life, property & financial bankruptcy
• successful DRM requires the implementation of all
phases of the disaster management cycle as a
continuum approach

99. 4. DRM approaches: a review
1. Sustainable Development approach
• SD multi-dimensional approach that highlights
the current needs and future limitations that have
direct relationships with disaster risks and its
pillars.
• As disasters cause harm and damage to people,
property, infrastructure, economies and the
environment, the goals of sustainable development
will be indanger.
• Disaster recovery and rehabilitation efforts require
enormous funds harmdevelopment

100. • Therefore, it is important that disaster
prevention/mitigation programs can be made as an
integral part of developmentalprogram
• efforts to enhance the capacities of communities
should cope with systems at various levels and
sectors towards self-reliance and self-sufficiency in
managing disasters effectively.
(human, social, economic,
and identifying various types of
and
• Understanding
vulnerabilities
environmental) as well as the nature of natural
hazardsare essential components of suchefforts.

101. • The SD view can facilitate the adoption of disaster
risk reduction program at local level that incorporates
the application of both structural and non-structural
measures
• This protects population susceptibility to natural
hazards through better development designs and
efforts that enhance early warning and forecasting
systems.
• As a result, investments and efforts for social and
economic development can be protected and
sustained through thisapproach.

102. • Thekey strength of this approachis:
• The need to enhance the capacities of communities
and coping strategies at various levels and sectors
towards self-reliance andself-sufficiency.

103. 2. Disasters are human-made not natural (
Development failure)
• The characteristics of a disaster became more
associated with its physical impact than with the
natural hazard.
• Interest grew in the design and implementation of
ways to mitigate losses through physical and
structural measures to reduce hazards or to increase
the resistance of structures.
• Natural disasters are intimately connected to the
processesof humandevelopment.

104. • Natural hazards like tropical storm, and earthquakes,
however intense, inevitable or unpredictable,
translate to disasters only to the extent that the
society is unprepared to respond and unable to cope,
and consequently, severelyaffected.
• Disasters triggered by natural hazards put
development gains at risk. At the sametime, the
development choices
communities and nations
made by individuals,
can pave the way for
unequal distributions of disasterrisks.

105. • When disaster events happen, whether causedby
natural phenomena or human activities, is believedto
be adisaster asif the community or society affected
fails to cope (that is adevelopmentfailure).
• Thus, the vulnerability
assets to the impact
of communities and their
of natural hazards is to a
significant extent determined by human action or
inaction.
• Even the occurrence of recent climatic anomalies
attributed to global climate change is traced to
human activities as the emission of unmanaged and
extremely high green house gases(CO2,methane…).

106. • This school of thought sees disasters as the collapse
or failure/inadequacy of development activities, and
the result of human activities that exacerbate the
existing natural hazards
• therefore, disasters are essentially human-made as
development failure.
• This notion of disasters as principally human-made
and not attributable to outcome presents a challenge
to practitioners to reconsider the common use of
―natural‖ and ―human-made‖ in typifying disaster
incidents.

107. • disasters can be prevented or their impact on peoples
and communities mitigated, and that human action
or inaction to high risk and vulnerability to natural
hazardscould spell the difference.

108. 5. Hazard/disaster risk/vulnerability assessment
1. Hazard Assessment
• A range of natural hazards threatens lives and
development.
• By understanding and anticipating future hazard events,
communities, public authorities and development
organizations can minimize the risk ofdisasters.
• Failure to do socan be highly damaging to development
programmes and projects.
• Yet, development planners often fail to consider the
threat of natural hazards sufficiently, and hazard and DRM
is often carried out independently of development
activity.

109. How Natural scientists analyze
the physical risks:
Environmental processes
Causes and
precursors
Recurrence
Forecasting and
mitigation
Magnitude-frequency
relations

110. • Program and project planners and managers should
understand the characteristics, location, frequency and
magnitude of hazards and their potential impact on
property andpeople.
• They should understand which hazards present a risk in
the places where they work and the main characteristics
of thosehazards.
• Information on the following key features of natural
hazards is needed to identify past, present and potential
hazards and their effects:
• Location and extent. Is the program or project area
affected by one or more natural hazards, what types of
hazard, and where?

111. • Frequency and probability of occurrence. How often are
hazard events likely to occur (in both the short and the
long-term)?
• Intensity/severity. How severe are the events likely to be
(e.g., flood levels; speed of winds and; magnitude and
intensity of anearthquake)?
• Duration. How long will the hazard event last (from a few
seconds or minutes in the case of an earthquake to
months or even years in the caseofdrought)?
• Predictability. How reliably can we predict when and
where events will happen? Information about the speed
of onset of a hazard event is principally relevant to
disaster preparedness and early warning systems.

112. • Hazards are not static phenomena and hazard risk
exposure will change overtime.
• Ideally, therefore, one should understand future changes
in hazard risk over given periods: a ‗probabilistic‘ hazards
assessment, rather than a ‗normative‘ one based on
current conditions.
• This is particularly relevant to climate change, which may
have a significant effect on the patterns and trends of
natural hazards anddisasters.
• N.B: hazards can have positive as well as negative effects
(e.g.,floods deposit fertile sediments).Hazards information
should be used to support decision-making about how the
project will manage any hazard threats thatare identified.

113. • The project appraisal (or preparation) process involves
weighing up a number of different factors (environmental,
social, economic, etc.), aswell ashazards.
• Projects may have competing objectives that have to be
balanced.
• Planners must, therefore, agree explicitly and openly in
each case how much weight to give to particular hazards
in their designdecisions.

114. 2. Vulnerability Capacity Assessment ( VCA)
• VCA is a key component of disaster risk analysis. Its
purpose is to:
 identify vulnerable groups;
 identify the factors that make them vulnerable and
how they areaffected;
 assess their needs and capacities (and empower them
to assessthese);and
 ensure that projects, programs and policies address
these needs, through targeted interventions or
prevention and mitigation of potentially adverse
impacts.

115. • Economically and socially marginalized groups in society
generally suffer worst from naturaldisasters.
• Thisaspect of people‘s vulnerability and capacity in the
context of natural hazards is very important for
and
understanding the potential impact of disasters
making choices about how tointervene.
• Generally, socioeconomic vulnerability is also now seen as
a key to understanding poverty and designing poverty
reduction programmes.
• VCA considers a wide range of environmental, economic,
social, cultural, institutional and political pressures that
create vulnerability.

116. • In development projects, its main purpose is to provide
analytical data to support project design and planning
decisions,
• particularly in ensuring that risks to vulnerable people are
reduced asaresult of the project.
• Itcan be applied in anumber of different contexts
• (e.g., poverty reduction, sectoral development, disaster
management,
different levels
climate
(from
change adaptation),
national or program
and at
level to
community andhousehold).

117. • It can perform arange of functions: scoping or screening,
program or project design, research, baseline studies,and
monitoring andevaluation.
• Organizations working in disaster reduction mainly use
VCA to identify problems (disaster reduction remains the
most commonapplication).
• VCA commonly forms part of risk analysis or social
appraisal, focusing on a particular geographical area or
sector.

118. • Other development project planning tools, such as social
analysis and social impact assessment, and especially
sustainable livelihoods approaches, may address similar
issues.
• VCA is a diagnostic tool, but by facilitating understanding
of present and potential future situations it helps to direct
interventions.
• Actions that result from a VCA should take the form of
improvements to project design and implementation that
increase community resilience (including development of
new activities to support vulnerablegroups).

119. • In project planning, VCAfindings usually feed into broader
risk analysis.
• In practice, the distinction between risk and vulnerability
is sometimes blurred and some guidelines present
vulnerability and risk analysis asacombined exercise.
• VCA can also be a tool for monitoring and evaluation, by
identifying changes in baselineconditions.
• It is also useful to evaluate the VCAprocess itself and use
those lessons in subsequentassessments.

120. • Econometric Approaches to Estimating Vulnerability
Vulnerability as Expected Poverty (VEP)
• vulnerability is defined as the probability that a household
will fall into poverty in the future.
• Specifically, welfare can be defined in terms of
consumption (Chaudhuri et al., 2002)
• So that vulnerability of household h at time t – Vht − is the
probability that the household‟s level of consumption at time
t + 1 (cht+1) will be below the consumption poverty line, z
Vht=Pr(ch, t+1 = z)

121. Advantages of VEP
1. Can be used as a measure of the incidence or severity of
poverty. i.e. May identify households “at risk” who are not
poor (e.g. households lying just above the poverty line are
vulnerable to shocks).
2. The approach can be implemented using a single round of
cross-sectional data. So the data needs associated with this
approach are less daunting than those that require panel
data.
3. Relatively straightforward to calculate

122. • Estimating Probabilities of Expected Poverty
• This requires an estimate of the distribution of
consumption for household h,
• an assumption regarding the benchmark or threshold level
below which the household is considered poor and
• an assumption regarding the threshold probability at or
above which a household is considered vulnerable.

123. • Following Chaudhuri assume that consumption is
determined by the following stochastic process:
lncht = ßXh + eh, where
• where lncht is log consumption,
• Xh is a vector of household characteristics (e.g., location,
characteristics of head, assets, prices, shocks), ß is a vector
of parameters to be estimated and,
• eh is a disturbance term with mean zero.

124. Steps in calculating VEP
1.Predict consumption for each household.
2. Derive the variance of consumption for each household.
3.Make assumptions regarding the distribution of consumption,
the poverty threshold and the threshold probability value above
which a household is considered vulnerable.

125. Approaches to Measuring Vulnerability & Resilience
• The Livelihood Vulnerability Index (LVI) developed by
Hahn et al. (2009) can be applied to assess the
vulnerability of households in the study area
• The dimensions of vulnerability were systematically
combined with equal weights to create an index on a scale
of 0 to 1.
• As in the case of the computation of the life expectancy
index of the Human Development Index (HDI), the
computation of each indicator of the vulnerability index
followed the process of standardization (see Hahn et al.
2009)

126. Where, Iv is the standardized value for the indicator, Ia the value for the indicator I for a
particular householda, Imin is the minimum value of indicators across all households, anda,
Imax is the maximum value of indicators across all households. After each indicator is
standardized, the component average value was calculated using equation 2.
𝑃𝑎=
𝐼
𝑣
𝑁
(3)
Where Pa is the value for the component in household a, and N is the number of variables in
the component.

128. • Resilience is measured using the FAO‗s Resilience
Index Measurement and Analysis (RIMA) model
• This model takes into account the major determinants of
resilience that include:
• physical dimensions (i.e. income & food access;
access to basic services; assets; social safety nets;
• climate change;
• enabling institutional environment),
• capacity dimensions (adaptive capacity; & sensitivity)
(FAO, 2013: 4)

129. (1)
Where:

131. 5 :Disaster risk and value management
5.1. Managing/governing risk along the supply chain/ value
chain

132. 1. Defining Supply chain and/or Value chain
• Supply chain is a system of organizations, people, technology, activities,
information and resources involved in moving a product or service from
supplier to customer.
• Supply chain activities transform natural resources, raw materials and
components into a finished product that is delivered to the end customer.
• Value chain: the process or activities by which a company adds value to
an article, including production, marketing, and the provision of after-sales
service.
• A value chain is a set of activities that an organization carries out to
create value for its customers.
• The difference between a value chain and a supply chain is that a
supply chain is the process of all parties involved in fulfilling a customer
request, while a value chain is a set of interrelated activities a company
uses to create a competitive advantage.
• Due to its global nature and systemic impact on the firm’s financial
performance, the supply chain arguably faces more risk than other areas
of the company.

133. The World Economic Forum identifies the following 12 pillars of national
competitiveness
 Basic requirements: Key for factor driven economies
• 1. Institutions 3. Macroeconomic environment
• 2. Infrastructure 4. Health and primary education
 Efficiency enhancers: Key for efficiency-driven economies
• 5. Higher education and training 8. Financial market development
• 6. Goods market efficiency 9. Technological readiness
• 7. Labor market efficiency 10. Market size
 Innovation and sophistication factors: Key for innovation-driven
economies
• 11. Business sophistication 12. Innovation.

134. The objective of value chains associated with the DRR are:-
• Strengthen the capacities of the local team in the field of DRR
• Identify and analyse natural hazards and risk which might have anegative
impact on the project activities in the future
• Identify and analyse coping strategies and use them as a basis forelaborating
future interventions to strengthen the resilience ofbeneficiaries.
• Identify risks which might hamper specific value chain activities
• Identify within the team interventions which strengthen the social andeconomic
resilience of local communities and authorities
• Long supply chains offer more opportunities for disruption by
unforeseen events. Because of the impact on the corporation,
global supply chain strategies must include a thorough risk
analysis. But any impression that supply chain risk is an
exclusively global phenomenon should be quickly dispelled. For
example, in 2011 in the United States alone, there were 98 natural
disasters (severe weather, floods, earthquakes, and fires). These
events resulted in over $26 billion in business losses, with over 65
people losing their lives.

135. 2. Supply chain risk management
• Ghoshal (1987) classifies risks along the supply chain as follow:-
• Macroeconomic risks associated with significant economic shifts
in wage rates, interest rates, exchange rates, and prices;
• Policy risks associated with unexpected actions of national
governments;
• Competitive risks associated with uncertainty about competitor
activities in foreign markets; and
• Resource risks associated with unanticipated differences in
resource requirements in foreign markets.
• The risk events most noticeable to the global supply chain
managers interviewed were currency, transit time variability,
forecasts, quality, safety, business disruption, survival, inventory
(and tools) ownership, culture, dependency and opportunism, oil
price fluctuation, and risk events affecting suppliers and
customers.

136. Supply chain risk management strategies
Risk
events
Definitions Quotes from interviews
Currency Changes in exchange rates When you‟re dealing with international trade, certainly introduce the
currency risk
Transit
time
Mean and variability of time spent in transit
including
transportation time and port clearance
The problem with these long supply lines is they‟re also highly
variable. I mean, it‟snot just the mean, it‟sthe standard
deviation of cycle time.
Forecast Errors in predicting demand leading to
stock-outs or excess stock
There‟s the forecast error issue, too, over a long lead times (of
global supply chains). And, you know, the forecast error
multiplies exponentially as you extend the lead time.”
Quality Defective, damaged, or wrong product,
components or
materials; differences across multiple sites
“the assumption is that quality is a given, but, the reality of it is,
you do have quality difference betweensuppliers because, you
have variation across people as far as who‟s doing the audit and
you don‟tnecessarily have the same guy doing every audit
everywhere around the world, so, you know there‟sdifference
there.
Safety Products causing safety hazards “the problem is that when these suppliers are half a world away
from you, they don‟tnecessarily are used to operating with the
same quality and the same safety standards as we adhere to
over decades because quality and safety standards have been
developed in the US over decades and, and they have become
almost natural to domestic suppliers. But look at people in the
East, they are just starting up factories. I mean, they don‟thave
that history.
Business
disruption
Inability to produce goods or sell to
customers
I always used to put in my analyses some money for air
freight. I would assume that eventually we‟re going to
encounter a disruption”
Survival Firm going out of business/bankrupt “And what if you‟re outsourcing some component and right
safety standards weren‟t exactly (followed), or right testing
wasn‟t done and you bring in a component that starts burning
down people‟s houses, I mean, can you imagine the lawsuits?So
it could put an entire company at risk for survival”

137. 5.3 Disaster risk in agricultural value chains
• Agricultural value chains are integral components of the global food system. As
such, the vulnerability and exposure of agricultural systems to hazards can have
far reaching and cascading effects for global foodsecurity.
• Agricultural value chains are conceptualized as having the following
components:-
• Input suppliers (i.e. groups or businesses that supply producers with fertilizers,
chemicals, seeds and other inputs),
• Producers (i.e. the individuals or businesses that involved with primary
agricultural production),
• Intermediaries (i.e. commodity buyers or brokers who act as middle-people),
• Processors (i.e. business that are involved with the secondary production of food
goods from commodities), marketers (i.e. businesses that aim to sell the food
goods) and
• Consumers (i.e. those that eat the food).
• Implicit within the value chain are the relationships and social capital that exist
between the components (GTZ, 2008).

138. Agricultural value chain (from Jaffee et al.2010)

139. Exposure, Vulnerability and Resilience in agricultural value chain
• Vulnerability refers to the susceptibility to harm of a system as it relates
to a broad range of physical, social, economic and environmental
processes .
• Exposure refers to the components of a system that have the potential to
be impacted by the hazard .
• Resilience refers to the ability of the system to absorb shocks, learn and
adapt to changing or adverse conditions.
• Agricultural value chains are vulnerable and exposed to hazards due to
the disaster risk of each component of a value chain.
• Value chains operate as economic systems, and risks at certain nodes or of
certain components have implications for other nodes and components.
• Resilience is a property of the value chain as a whole, and is related to the
vulnerability of each value chain component. Table below provides an
overview of disaster risk and examples of resilience in agricultural value
chains…..
•

140. Pesticide Contamination:
• Pesticides are lost from farms in much the same way as nutrients.
• They can leach through the ground, run off or escape into theatmosphere.
• Some of their effects are well-known; since a large proportion of pesticides make
it into the environment, eg Carson‟sbook Silent Spring ( water, soil ,birds)
• Pesticides can have large detrimental effects, particularly on aquatic and avian
species (Newton, 2004).
• Pesticide residues are passed along the food chain, and inevitably reach humans
as well.
• There are many impacts from pesticide use that are poorlyunderstood.
• Exposure (sprayers), residues, consumer…(shorter term (acute) eg eye irritation,
skin irritation & long term (chronic) eg cancer, birth defect, respiratoryproblem.
• Developing countries often have less effective pesticideregulations
• The „circle of poison‟, however, referring to the trap of producers in loosely-
regulated countries using dangerous pesticides on food which is then sold to
consumers in strictly-regulated, no longer is of major concern.
• This is a sign that policies are improving, and although pesticide use is still
increasing, its growth is slowing

141. Principles of Enhancing Agricultural Resilience to Disasters
• Disaster risk reduction strategies can be implemented at a number of levels.The
most common levels used for analyzing these strategies in agriculture include
on-farm or household, community, regional, provincial, national and
international.
• Disaster risk reduction needs to be place-based, but could be guided bythe
principles highlighted below:-
1.Diversification: Diversification is an important part of disaster risk reduction in
agriculture. Diversification typically refers to introducing new crops and livestockto
agricultural systems. This approach reduces vulnerability by increasing the
commodity options for a producer.
2.Risk transfer and sharing : Risk transfer and sharing have been important parts
of disaster risk reduction in agricultural systems in many parts of the globe. This
form of disaster risk reduction involves, as its name suggests, shifting ordistributing
risk between or across different actors within an agriculturalsystem.

142. 3.Sustainable Intensification :Agricultural intensification has played a major part
in increasing productivity over the last century. Intensification has occurred through
a number of ways and has involved the following innovations: crop improvements,
agroforestry, soil conservation, integrated pest management, horticulture, livestock
and aquaculture. Intensification helps reduce disaster risk in the global food system
by increasing productivity and thus food supplies available in the case of a disaster.
In addition, there are a number of novel extension practices, such as farmer field
schools and modern communication practices (e.g. ICTs), that will be important.
4.Resource-use Efficiency: Efficient resource-use helps reduce vulnerability to
multiple hazards in a number of contexts. In a general sense, increased efficiency
typically leads to reduced vulnerability through decreased dependence on critical
resources (e.g. fertilizer, water) and more sustainable resourcemanagement.
5.Market Governance: The governance of markets, especially at the local scale, is
increasingly involving new actors. Access to value chains for small-scale
agricultural producers, as related to market governance, can contribute significantly
to their abilities to manage disaster risks by improving access to resources used in
coping or adapting.

143. Dimensions of corporate social responsibility in the food chain (adapted from Maloni
and Brown 2006).

144. Regional Differences in Logistics
First World Emerging Third World
Infrastructure Highly developed Under development Insufficient to
support advanced
logistics
Supplier operating
standards
High Variable Typically not
considered
Information
system availability
Generally available Support system not
available
Not available
Human resources Available Available with some
searching
Often difficult to find

145. 5.4 Recommendations to Manage Supply Chain Risk
• To manage supply chain risk in your company, you will have to develop processes
to Identify, prioritize, and mitigate risk.
(): Risk identification
– What can go wrong?
(ii): Risk assessment (read chapter 4)
– What is the likelihood it will go wrong?
– What is the magnitude of the consequences and overall impact on the firm?
– How quickly will the problem be discovered?
(iii): Risk mitigation and management
– What options are available to mitigate the risks?
– What are the costs and benefits of each option?
 Leading companies have a process that executes these steps continually overtime.
 In the dynamic global environment, change is a constant.
 Risks identified and mitigated today become obsolete (outdated)tomorrow.
 Risk management must be an ongoing process.

146. The three-step risk management process
A) Identify the risks: Listed below as thought starters are some risks your supply chain may
face:-
1.Routine supply chain risks: These involve events like unexpected transit delays, changes in
customers‗ orders, problems with suppliers, theft, and all of which can cause serious delays in
customer shipments.
2.Natural disasters: Although these are unpredictable, a few firms try to anticipate climatic
disruptions and develop contingency plans. If a company has a facility in a hurricane-prone
area, it can assume it‗s only a matter of time before the odds catch up with the location.
3 Quality problems: A long supply line often exacerbates quality issues. This risk often causes
companies to carry more inventory.
4.Forecast error: Long-range forecasts required by long global supply lines are notoriously
inaccurate. Forecast error over long global lead times often results in major availability issues
and excess inventory problems.
5. Damage: Whether you‗re importing or exporting, there is significantly more handling in the
supply chain that exponentially increases the chance for damage.
6.Political/civil unrest: While not a major concern, it should be on a company‗s risk list and
examined, depending on the countries of import and export.
8.Strikes: Strikes are a reality—for example, the 40-day Hong Kong port workers strike in
April–May 2013. Strikes could also occur at production plants or facilities that supply critical
parts.
9. Laws and regulations: Unusual or unexpected application of regulations in a particular
country must be considered, as must the Foreign Corrupt Practices Act in the United States.

147. 10.Customs or port issues: Customs regulations are always in flux( instability, change) .
Failure by shippers to understand the rules and regulations can often cause excessive
shipment delays and fines.
11.Terrorism: Although quite rare, acts of terrorism often result in the addition of additional
permanent costs to the supply chain far beyond the cost of the act itself.
12.Safety problems: How many times are safety recalls issued on top-name brands? There
may be opportunities with product liability insurance to mitigate risks, from product design to
manufacturing.
13.Changes in economics: For example, wages in China are escalating(rising) for a variety of
reasons. Some point to the ―one-baby” policy as a source of future increasing labor
shortages, even though predictions call for that policy to relax. As reported by China‗s National
Bureau of Statistics, wages rose 14 % for private-sector workers in 2012, compared with 12.3
% in 2011.This contributed to nearly a 70% wage increase in the past five years.
14.Price or currency fluxions: Extreme and unexpected changes in the price and availability
of critical raw materials wreak(cause) havoc(chaos) on a firm‗s financial plans, as do swings in
currency.
15.Intellectual property loss: This is a major problem that should not be underestimated.
Many firms, to their chagrin, have found they inadvertently created a new global competitor.
17.Pirate attacks: Piracy on the world‗s seas recently reached a five-year low, although it‗s
still a danger, with 297 ships attacked in 2012, compared with 439 in 2011.
18.Third-party risk: The way your suppliers do business could unexpectedly impact your firm
in a devastating way

148. C) Some elements that companies use in their risk mitigation plans include:-
1.Insurance: Firms need to work with insurance providers and create a plan to use insurance to
mitigate risk where appropriate, based on an objective cost-benefit analysis (described in more
detail later).
2.Best practices approaches: Companies would be well served to employ one of the best
practice models previously described.
3.Inventory: Some call this “the no-brainer” approach to mitigating risk. It is certainly the most
often used, either by design or accident. How much additional inventory results if a source is
moved globally without making systemic improvements in the supply chain process? Many of
those we talk to say 60 to 75 or more days of supply!
4.Expedited shipping: Some firms accurately realize that “stuff happens” and that they may
need to expedite shipments globally in spite of the best-laid plans. Therefore, they prepare
thoroughly for that day. In fact, some assume a percentage of the shipments will be expedited or
airfreighted when they initially plan for a global source. Knowing this, the proactive supply
chain manager may consider investigating different „ types of insurance coverage. Some
policies cover the costs of expedited shipments, depending on circumstances.
5.Import excellence: Leading companies realize that the better they become at global shipping,
the less risk they incur. They strive to achieve import excellence, get the highest-Fairtrade
certification, and optimize incoterms (international commerce terms, which specify liability and
responsibility throughout the global supply chain).

149. 6.Competent partners: Although it is potentially costly, some companies develop a second
domestic source that can be quickly ramped (risen) up. They insist on dealing with strong,
competent world-class suppliers, ideally with a “first world” parent. Those who have done this
effectively contend that it can take at least two years to develop and certify an excellent source.
7.Financially strong partners: One major buyer defaulting on a payment could spell disaster for a
small to medium-size enterprise. Trade credit insurance, used for many years throughout Europe, is
now becoming increasing popular in the United States.
8.Design for globalization: The simpler the product design and the fewer parts and SKU(stock
keeping unit)s involved, the less risk there is in a global supply chain. Leading firms design for
globalization. They minimize component parts and SKU s and have rigorous beginning of life
tollgates(entrance) and end of life processes for their products.
9.Supply chain event management: An early warning system is crucial if risks are to be identified
quickly enough to do something about them. Supply chain event management (SCEM) systems put
in place criteria that trigger alerts