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Business Plan for a Pandemic?
Manufacturing is especially vulnerable, said Michael T. Osterholm, an epidemiologist and former adviser to the Department of Health and Human Services. Factories increasingly rely on parts made in numerous places, which are then shipped, often from overseas, and assembled into finished products.
In February, the University of Minnesota's Center for Infectious Disease Research and Policy, which Osterholm heads, sponsored a pandemic-preparedness conference for businesses. More than 200 companies sent representatives. Osterholm goes into metaphor overdrive when describing what he told them.
"This is a global blizzard of potentially 12 to 18 months' duration," he said. "This is the grain of sand that is going to bring the huge gear of the just-in-time economy to a stop."
Chelsea C. White III, the chairman of industrial and systems engineering at the Georgia Institute of Technology, agreed, saying many companies have supply chains that are "fragile and subject to ungraceful degradations." One of his favorite examples is Toyota. In 1997, fire damaged a factory that made brake parts, stopping production. Within 12 hours, every one of Toyota's Japanese plants had to stop or slow the assembly of cars, White said.
There may be lessons from history that today's companies find useful. But the teacher isn't the 1918 Spanish flu, which killed an estimated 50 million. It's SARS.
Severe acute respiratory syndrome emerged in China in November 2002. By the following July it had spread to at least 28 countries, infected 8,437 people and killed 813, including nearly 350 in China and 300 in Hong Kong.
Canada had only about 40 SARS deaths. But the outbreak caused a 14-week emergency in Toronto, where 30,000 people were quarantined at home or in hospitals. The city lost nine conventions and 12,000 jobs, and the economy lost $1 billion and took two years to fully recover. Yet in public health terms, the city's response was a nearly unqualified success, and globally SARS was a bullet dodged.
A year ago, the CDC Foundation in Atlanta held a two-day meeting with two dozen Toronto business leaders to talk about SARS. To encourage candor, the meeting was not recorded. But the 13-page report that came out of it, while stripped of company-specific anecdotes, is full of observations about work during a time of plague:
Business becomes a co-leader with government in the public health response to an epidemic. Fear is worse than disease, so communication is key. Password-protected Web sites are a good way to communicate with employees. Companies are better than government or medical institutions at rotating fresh people onto crisis-management teams. Fear of lost wages is the single biggest concern when workers are asked to home-quarantine, so companies should have clear policies in advance.
Thinking about operational decisions -- not buying drugs and equipment -- is the most important thing, the experts said.
Who can work at home? Who needs IT upgrades in advance to make that possible? Who needs to come in? What lines of production or service can be shut down without jeopardizing the entire enterprise? Who are the fourth and fifth understudies, not just the first and second, for key positions?
Nevertheless, some firms are laying in supplies, too. Roche, the pharmaceutical company, reports that more than 50 firms have contacted it about building stockpiles of its antiviral drug Tamiflu (oseltamivir).