APRIL 2020 CORONAVIRUS
Manufacturers
must assess
the impact
of disruption
across the entire
organisation
Run new risk assessments
Given the uncertainty inherent to this pandemic
(its transmissibility and seasonality, for example)
it is critical that companies re-run any risk
assessment that they have in place, using three
diff erent scenarios:
One to two months of circulating virus and a
short-term fi nancial impact to your company
More than two months of viral impact and a
global economic slowdown
A sustained global recession
The risk assessment should fi rst focus on
critical business operations – this especially
includes people. The human, fi nancial,
technological and operational implications within
each scenario should be fully understood. For
example, within a food company, companies
should ensure that full sterilisation of all
assets take place during the recovery, to
proactively manage any concerns about product
contamination. And they should be prepared to
prove it, thus pre-empting public doubt or fear.
These are distinct from any impact
assessments during the Response phase, and thus
should be run as a separate exercise.
Take a realistic view of supply chain
disruptions and customer implications
The pandemic has wreaked havoc on the supply
chains of many companies. For example, Hyundai
suspended production in South Korea because of
a shortage of parts manufactured in China, and
that was before the coronavirus hit the country
itself. Even Apple, which earns about a quarter of
its operating income in China, temporarily closed
its stores and assembly plants and faces supply
chain problems as 290 of its 800 suppliers are
based in China (https://bloom.bg/2whQLFE).
As more companies take measures to contain
community spread, supply shortages will become
more pronounced and far-reaching. As such, it is
critical that companies get an accurate picture
of the inputs that they can expect from existing
suppliers, and what can be sourced elsewhere in
order to deliver according to production targets.
Companies may be optimistic in their ability to
deliver, so eff orts to get a realistic picture will be
paramount. Companies do not just face supplier
fulfi lment problems, but the actual transport of
goods may be even more heavily impacted.
Concurrently, companies must also provide
pragmatic projections to their customers, and
not over-promise. It is natural that companies
want to reassure their customers, but over
promising breeds distrust. There may be staff
shortages, should staff still be under quarantine
or recovering from any illness or family matters
related to the disease.
Review operational risks and integrity
During any unplanned shutdown, there are risks
that are inherent to start-up; indeed, process safety
incidents are fi ve times more likely to occur during
start-up than during normal operations (https://bit.
ly/2WoiaAd). To mitigate such
risks, a full restart assessment
should be done on all critical
risks to ensure integrity of all
assets and processes before
restart. Policies and procedures
should be updated and fully
documented as well. Some
of the assets were likely not
maintained according to
schedule, so they should be fully
checked in accordance with
all lockout/tagout procedures,
and any maintenance work
completed before start-up.
Control processes that have
been digitised should also be
tested. Finally, a detailed prestart
up safety review should be
completed.
Use time productively
As operations slow or come to
a halt, there is an opportunity
to harness home-bound staff
to maximise the preparedness
of your operations for the
Recovery stage. They can
update procedures and training;
review contractor planning
and potentially onboard new
contractors for the surge of
work during start-up; create
start-up checklists; conduct
people planning, and how to
staff the scale-up of operations.
It is also an ideal time to build
skills among the workforce
on how to better manage and
mitigate operational risk by
deploying virtual training or
relevant eLearning modules.
Focus on external
communication
If the virus has impacted
your company – be it an
impacted employee, confi rmed
transmission in the workplace,
an imposed quarantine or even
a perception that the company
has not done enough - there may
be some reputational damage.
As such, proactive measures
to reassure all customers,
stakeholders, community
members and the general public
should be deployed. External
audiences want to know what
happened, what mitigation
eff orts were put in place and how
the company can ensure that
they will be able to deliver in line
with expectations. By showing
that the company is ‘open for
business’, it reassures employees,
communities and investors, thus
contributing to improvement of
the wider economic outlook.
Conclusion
While many companies
believe that they are prepared
to respond to a business
disruption, insuffi cient
emphasis is given to recovery.
And this is even more prevalent
in the case of the coronavirus
because Response blends into
Recovery. It’s never too early to
begin planning for recovery. The
actions recommended in this
article should be an extension
of response eff orts, rather than
a new or separate initiative.
While it may be the same team
executing the work, recovery
eff orts are distinct from
response eff orts. During the
Response phase, the goal is to
limit the impact on your people
and operations. In the Recovery
phase, the focus is on resuming
critical business functions
quickly and minimising loss
of customers. It is critical that
companies place ample focus
on recovery planning and turn
risk into opportunity by being
prepared and proactive.
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