As the volcanic eruptions in Iceland seem to be calming down, the long-term economic implications and costs are still to be determined. In a world that is becoming increasingly interdependent we often see how a disaster, natural or manmade, can impact the rest of the world.

I decided to write this article after talking to my brother in the U.K.  and thinking about the effects on his business and lessons we should have learned from the terrorist attacks of 9/11.

How many businesses know what the Maximum Acceptable Outage period is for supply of key inputs that are coming from outside suppliers? The attacks triggered many companies to look closely at their supply chain. How many have kept their risk management and business continuity management plans for their supply chain up to date since?

With that in mind, let's go back to my brother in the U.K., who is a fresh produce wholesaler and, as you can imagine, has been hard hit by the grounding of the airlines. He can't get produce, and as we talked it over, it dawned on me how widespread the effects will be. He had been expecting a very large delivery of Mexican onions that because of the delay was now going to be sold to the U.S. market at a greatly discounted rate to move the product, which in turn will put pressure on the prices domestic producers can command, which given the fragile economy, is the last thing we need. 

One can also only imagine the effect this is having on our fresh produce companies that export to Europe. In the short term there may not much he can do about it, but in capital intensive industries you may want to look at your minimum inventory levels, especially spare parts that have probably been run down given the economy.

However, I did suggest to my brother that he is really in the distribution business, and perhaps he should look into dehydrated foods as a complementary line. In a business it is commonly accepted that having more than 20 percent of your business with one client is not a good idea. This should also theoretically apply to geographic markets, modes of transportation and product mixes. How dependent are you on one supplier or one market?

Stories such as this are not limited just to fresh produce or supply chains in general. There may be opportunities out there for you to capitalize on if you keep your eye on the ball. I have seen a couple of comments that the grounding of the airlines is affecting the Greece Euro bailout as key meetings had to be canceled, and the resulting delay could lead to a downgrade of the Greek debt, which in turn could raise the cost of the bailout.

Now, if this is true then there has to be an opportunity for Web-based communication companies to offer the Greek government their services and probably industry in general much as they did after 9/11.

Let's look locally, too, where we are very fortunate that only 6.6 percent of our visitors come from overseas, and so this major cog in our economy will not be impacted. However, should we be front-loading and gearing our advertising to address those Americans who were going to vacation in Europe this year and might now consider a domestic vacation instead?

It is very difficult to give answers to every scenario as each industry is different. However, I would like to leave you with two thoughts. One, if there was a disaster, how would your company fair? Do you have enough inventory on hand to withstand a reasonable delay? Secondly, are you constantly thinking outside the box so that when an opportunity presents itself you are able to take advantage of it? No one wants disasters to occur, but they do unfortunately, and you need to be prepared for their occurrence.


Nigel Hartley is the president of Commonwealth Advisors and is an accredited associate of the Institute for Independent Business, a CMT senior mentor and a certified behaviors coach working primarily with small and mid-size business owners. He can be reached at 707-573-7154, or you can e-mail him at nigelhartley@cmtmentors.com, www.nigelhartley.com