Preparing For A Pandemic
http://www.forbes.com/logistics/200...s-investment-biz-logistics-cx_ek_1116amr.html
Eric Karofsky 11.16.06, 7:00 PM ET
During the past year, there was much hype around whether or not the H5N1 bird flu virus would mutate into a human-transmissible form. While the debate on whether or not it will mutate has subsided, ignoring the possibility of a pandemic or other low-probability, high-impact event is not a strategy--building a risk management framework is.
What may surprise decision makers is that there are several quick-hit investments that will benefit the organization as a whole, regardless of whether, or when, a disaster happens. Being proactive is about near-term and long-term benefits. So where should one focus?
In a pandemic, people will avoid others for fear of infecting themselves or transmitting the virus. Five proactive investments will increase a corporation’s readiness:
--Contact center applications: Increasing customer service capabilities for companies so that people can shop and work at home.
--Self-service applications: Allowing constituents to access and update information from a database and create workflow limits interaction requirements.
--Knowledge management and e-learning: Creating a cross-trained workforce, similar to the military, so that workers can perform disabled colleagues’ tasks.
--Supply network design tools: Understanding and optimizing the nodes in the supply chain in case large geographies are more affected than others.
--Financial modeling: Evaluating scenarios for corporate-wide financial risk for right now, the near term, and the future.
Note: The discussion below represents technology investments that can yield relatively quick wins to prepare for a pandemic. As such, niche applications and service providers, providing immediate functionality and service, are the focus as opposed to long enterprise deployments.
Contact centers
As people stay at home, more business will be conducted via phone. Increased capacity and functionality will be needed for contact centers to handle complaints, manage cases, access help desks and product information and dispatch service personnel. Traditionally, this functionality is deployed for retail-oriented businesses. However, suppliers and employees will need to access information as traditional points of contact may not be available.
Results of this investment in a pandemic: Commerce can continue, allowing companies to achieve revenue.
Results of this investment without a pandemic: Better customer service, decreased cost of sale and redundant operations in preparation for future economic, social or natural disasters.
Self-service applications
Some companies may choose to accelerate their ongoing efforts to allow their constituents to conduct business electronically. This can be in the form of employees updating HR records, customers ordering product or suppliers accessing payment information. The design of a system that minimizes human intervention in completing order fulfillment will be beneficial to sustaining ongoing operations with limited staff.
Results of this investment in a pandemic: Business continues with limited in-house staff.
Results of this investment without a pandemic: Reduced labor costs in fulfilling routine orders.
Knowledge management
Information is lost as employees and functional groups face a pandemic. Whether it’s information for a specific sales account, knowledge to fix a particular manufacturing machine or payroll information, when the ability to perform simple functions disappears, a company is paralyzed.
Results of this investment in a pandemic: Continuing to function as a viable business with little disruption as replacements are found for employees and groups that are not available to work.
Results of this investment without a pandemic: Collaboration between employees allows for innovative solutions and time-to-market advantages. It reduces the chance of making the same mistake twice and mitigates the inevitable loss of knowledge because of an aging workforce. Also, skills-based succession plans will decrease the effects of losing key workers.
Supply chain modeling
Sooner or later, a node in your supply network will fail. This is true whether the failure is because of a pandemic in the supplier’s region or simply a procedural failure--examples include labor disputes, port closures, quality problems and disasters. All organizations with extended supply networks should have modeling systems in place and in use.
Designing the flexible supply network means that the organization has alternative nodes that can act as suppliers or logisticians should the primary node fail. Working in simulation, the organization can determine the impact of such changes, answering key questions: What is the change in lead time? Cost? Quality? Reliability?
Results of this investment in a pandemic: The risk of switching to alternative sources has been examined. Prenegotiated agreements can potentially block out competitors from using this source.
Results of this investment without a pandemic: Having an alternative source can provide negotiating power as well as mitigate risks of smaller disasters and local disruptions.
Risk management
The projected cost of taking action now for something that may never happen must be considered in analyzing any risk management program.
Many companies already have some form of risk management in place after investing in tools for compliance, analytics and business intelligence (BI) to process management. Companies need to apply the same processes used to evaluate investments (payback/ROI/NPV) to evaluate the risk of rectifying a potential problem because of a pandemic.
For instance, cash will become an issue in a disjointed world. Customers may be booking their own orders, but companies must consider cash flow. Are customers’ payables departments at full staff? Are they paying bills on time? These scenarios should become part of the modeled cash flow projections.
Results of this investment in a pandemic: Continuing operations because of informed choices, strong cash management and appropriate proactive investment.
Results of this investment without a pandemic: Informed choices for all investments and enhanced auditing capabilities.
Conclusion
Remember that no strategy is not a strategy. Companies that proactively invest create the opportunity to increase readiness should a pandemic or other catastrophe occur. If, however, the world is spared such a catastrophe, at a minimum these companies will benefit from increased flexibility, smoother processes and the opportunity to operate more effectively.