Author: f1224mtorelli

Hurricane Sandy Causing Problems for Small Businesses

Posted on by f1224mtorelli

When compared to major corporations, small businesses have it rough.  They don’t have the staff, resources, or logistical capabilities of larger companies.  Imagine, then, the nightmare that so many small business owners awoke to after Hurricane Sandy devastated the East Coast.  It’s for this reason that I’ve decided to discuss small businesses and the logistical difficulties they are facing after Hurricane Sandy – especially in regard to their supply chains.  The following New York Times article is one of the few I found that exposed the grim reality so many small businesses will face in the coming months.  Below is a synopsis.

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A small business owner stands amongst the devastation caused by Hurricane Sandy.  Click the image to be taken to the article.

The article begins with a story that perfectly illustrates the dire circumstances so many business owners found themselves in after Hurricane Sandy passed through the East Coast.  Kristy Hadeka and Sean Tice – co-owners of Brooklyn Slate Company, a company that produces slate cheese boards – had been preparing for the holiday season when Sandy hit.  As a small business, the company depends on the revenue generated during this time of the year.  According to the article, holiday sales typically make up 75% of the company’s annual revenue.  Instead, they found themselves dealing with a litany of other issues – a depleted staff, damaged inventory, halted UPS shipments, and even customer emails requesting arrival times for orders.  Kristy and Sean even had to locate missing merchandise that was being transported to a Whole Foods store in Massachusetts.

Another small business, Linda the Bra Lady, had a similar experience. While the company did not experience any physical damage, co-founder Carl Manni explained that they did suffer financially as a result of the storm.  Manni explained that due to damage sustained to several of his vendors’ warehouses, he was unable to procure the inventory he needed to fill online orders.  He consequently had to back out of the orders – a decision that will cost him approximately $50,000 for this week alone.

Outside of lost inventory and stifled supply chains, the looming issue is that many of these business owners did not have insurance that covered a disaster of this nature.  Consequently, many small businesses will have to file for bankruptcy if they do not receive disaster relief funds from the government.

Ultimately, I feel that small businesses have a much harder time dealing with catastrophes of this nature.  Whereas large retailers can reroute their supply chain or reorganize resources to soften the punch Sandy packed, small businesses do not have the necessary resources to reroute orders or replace inventory – especially given the current state of the economy.

* The information provided in this post was drawn from the following New York Times article:

http://www.nytimes.com/2012/11/08/business/smallbusiness/after-the-storm-business-owners-assess-damage-and-ponder-lessons.html?smid=pl-share

Questions to Consider

  1. How do the logistical challenges faced by small businesses differ from those faced by major corporations?
  2. In the aftermath of Sandy, who has the rougher road – large corporations or small businesses?
  3. Put yourself in the shoes of a small business owner, how would you have reacted to a disaster of this nature?
  4. Should the government help small businesses recover from this disaster?

Concerning Environmental Sensitivity: Where Does Responsibility Fall?

Posted on by f1224mtorelli
Bill Hoffman – owner of Aptos Jewelers
Click the above image to be taken to the New York Times article associated with this post.

As students in an operational management class, we study all issues involved with operating a business.  We are taught that operating in an ethical manner is paramount and all-encompassing.  That an organization’s leaders must be cognizant of the impact their decisions have internally and externally – specifically in regard to the environment.  The article used for this post describes what happens when the government forces businesses to function in a certain way.  I found this article intriguing and in reading it, I found myself extremely conflicted.  Below is a brief synopsis.

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More than two-dozen cities in California have enacted a ban on the use of plastic shopping bags and have begun charging between 5 to 10 cents to use a paper bag.  The movement has created a divide between shop owners like Bill Hoffman – owner of Aptos Jewelers in Aptos, California – and their counties.   Hoffman, who has been one of the more vocal opponents of the regulation, feels that charging his customers (who are often spending thousands in his store) for paper bags is crass.  Hoffman also is of the belief that the way he packages his product is part of the experience he offers.  He is offering a high-end product that requires high-end packaging.  After filing with Santa Cruz County for an exemption from the ordinance, Hoffman was turned down.

The push toward reusable bags has also upset the plastics industry, which is pursuing legal action against counties in California that have enacted a plastic bag ban.  Industry representatives claim that there is insufficient evidence to support that banning plastic bags will have any drastic impact on the environment.

Stephen Joseph, who is the primary voice and attorney for the Save the Plastic Bag Coalition, has argued that bans in cities that have a high tourist presence (such as San Francisco – which is initiating a plastic bag ban this month) will be particularly ineffective because tourists typically don’t travel with reusable shopping bags.  This has led Joseph to deduce that tourists will begin buying reusable plastic bags when they arrive in a location, and will dispose of them upon their departure.  This, of course, would make a huge dent in the purpose of the ban.

When questioned, many consumers voiced a frustration with the ban/paper bag charge, but expressed that it’s ultimately necessary.*

Questions to consider:

  • How do you feel about a movement of this type?
  • Should the government step in and ban materials that are harmful to the environment?
  • Should it be up to the business owner to ensure he/she is operating his/her business in an environmentally responsible manner?
  • Should consumers take the responsibility?

 

* The information provided in this post was drawn from the following New York Times article: http://www.nytimes.com/2012/09/29/business/energy-environment/communities-curb-use-of-paper-and-plastic-shopping-bags.html?pagewanted=all