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Customer input key to manage supply chain risk

Most businesses know what they’d do in the event of a power outage but many have not considered how they would manage their business impact if they had a water disruption. One water utility is working with its customers to address this challenge, as a means of building a more resilient water future.

Presenting at the Australian Water Association NQ Conference this week, Queensland Urban Utilities Resilience Specialist Michelle Snell and Commercial Account Manager Bronwyn Batch said true resilience requires managing both upstream and downstream supply-chain risks.

The case for change originated from Queensland Urban Utilities’ involvement in preparing for the Brisbane G20 Summit in 2014.

Batch said by working directly with venues hosting G20 dignitaries, QUU was able to understand network vulnerabilities and venue contingencies.

“We built strong relationships with each venue and implemented controls to minimise network disruptions and respond quickly if one occurred,” Batch said.

Following G20, the Customer Resilience Program was formed and piloted with hotels, shopping centres and entertainment venues.

The program involved discussing the resilience and contingency arrangements available to both Queensland Urban Utilities and its customers, and identifying opportunities to improve those arrangements.

“We aim to deliver reliable water and sewerage services to our customers. However, utilities all around the world face challenges such as burst water mains, which can disrupt supply. The rectification can be simple or quite complex and sometimes it takes time to fix,” Snell said.

“When we have outages, how do we manage the impacts and engage with our customers? What do these disruptions mean for our commercial customers and do they have plans to manage potential impacts?

“When we started having these conversations, we found that almost everyone had a contingency plan for the loss of power, but very few could say they had a plan in the event of a water supply or sewage service disruption.”

Snell said this reality points to a need to change the way supply-chain risks are managed, as many customers expect the utility to manage all of the risks.

“We have a case for change: we can’t keep doing business as usual. We need to engage in supply-chain resilience discussions with our customers to ensure we deliver an effective operating model both today and into the future,” she said.

“It’s about understanding the unique needs of each customer and how they use water, and explaining to them that there is a risk that transfers down the supply chain from us to them.”

Batch said the Customer Resilience Program worked well to help educate commercial customers about supply-chain risks and the consequences of failing to have a plan in place.

“It was really an education piece. A lot of customers, particularly in my portfolio, hadn’t considered the risk of a water outage because our supply chain is so reliable,” Batch said.

“People expect power outages and therefore have backup plans. But because our service supply chain is robust, on the one-off chance there is an outage, it catches many customers off-guard.”

Snell said that customer-focused risk management is an important aspect of creating more resilient networks into the future.

“Strengthening our relationship with our customers has broader benefits, because it helps us manage challenges and maximise opportunities,” she said.

“We can plan for a resilient water future with our customers by incorporating their projected market growth into our planning and suggesting solutions to meet their individual business needs.

“We are customer-centric, and this program has proven the value of having an open and transparent discussion with our customers to manage supply chain risks together. Working with our customers we can collectively invest in building resilience. We can’t build resilience without their input.”

Review the Australian Water Association NQ Conference program here.