One of the most visible incidents within the U.S. this week concerns the aftereffects of a tragic fire that eventually completely destroyed and sunk a drilling platform in the Gulf of Mexico.  Eleven workers are still reported as missing.  The offshore accident involving a platform owned by BP PLC has marshaled an all out effort by BP and other governmental agencies to control a spreading spill of crude. Some U.S. governmental officials are noting that if the oil spill is not contained soon, it may result in one of the greatest ecological disasters to ever hit the U.S.

While the fallout and ultimate implications for BP, the oil industry, and related marine and agricultural industries that rely on the Gulf are yet to play out, I thought it would be important to initially note one important tenet of supply chain disruption and crisis management, that being initial  accurate risk assessment.

Last Friday (April 23) I watched a number of U.S. media outlets reporting on this incident, including CBS News.  Coast Guard Rear Admiral Mary Landry, commander of the government response noted in a CBS Early Show interview that she had received assurances that no oil was leaking from either the ocean floor or the well riser.  She described this as good news, and that recovery efforts on the weekend would concentrate on containing the oil that had already spilled.

Obviously, that information was not accurate, and precious time may have been lost in mounting a proper response to the disaster.  It turns out the oil was indeed leaking from the damaged well, now estimated to be at a rate of 42,000 gallons per day. BP and Coast Guard personnel continue to scramble to ward off an environmental disaster, including today’s strategy of actually attempting to burn off the oil.

One of the most important aspects of managing risk at a time of crisis and disruption is the initial gathering of accurate assessment information.  That information often needs to be validated and corroborated, since people who are scrambling tend to rush too soon to judgment. Whether the crude was leaking initially or after the initial rig sinking, accurate information gathering, testing and assessment remains the most important need in times of disruption.

Bob Ferrari