Doug French

Mayor Mike Bloomberg's plan for New York City with hurricane Irene bearing down on the Big Apple was to evacuate residents and force businesses to close in low-lying areas. Move in with friends and relatives living on higher ground, stay out of the way, so government's first responders can handle real emergencies was the message.

The result, as one of my friends who lives in Manhattan wondered, "They closed down the city, and all we get is a rainstorm?"

Meanwhile, as Irene ravaged other parts of the eastern seaboard, causing millions to be without power, the eatery of last resort, Waffle House, kept its doors open in many locations, using generators and serving a limited menu designed specifically for emergency situations.

"Hurricane Irene knocked out power in Weldon, N.C., on Saturday evening," writes Valerie Bauerlein for the Wall Street Journal, "but as the sun rose on this tobacco-farming town at 6:30 the next morning, the local Waffle House, still without electricity, was cooking up scrambled eggs and sausage biscuits."

The venerable Waffle House has learned a thing or two about responding to crisis, given their locations up and down the eastern seaboard. Panos Kouvelis, PhD, the Emerson Distinguished Professor of Operations and Manufacturing Management and director of the Olin's Boeing Center for Technology, Information, and Manufacturing explains, "The companies that are most frequently exposed to supply-chain disruption are the ones that have the best risk management plans."

Kouvelis instructs his students about the "Waffle House Index" first coined by Federal Emergency Management Agency Director W. Craig Fugate in the wake of the Joplin, Missouri, tornado in May this year.

If the index is green, Waffle House is open with a full menu. If Waffle House is only serving a limited menu, the index is yellow; and if Waffle House is closed, the index is red.

A red index is rare. Waffle House management will do anything not to close.

"They know immediately which stores are going to be affected and they call their employees to know who can show up and who cannot," Kouvelis says.

Doug French

Doug French is is president of the Mises Institute and author of Early Speculative Bubbles & Increases in the Money Supply and Walk Away: The Rise and Fall of the Home-Ownership Myth

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