Many organizations are seeking ways to prepare for the next wave of Delta variant, as well as other variants that may be in the pipeline. How should your organization prepare? What needs to be done today? In general, I don’t believe that a single “playbook” is right for every type of organization. But here at least are some basic elements that we discussed in a Harvard Business Review article that we published earlier this year.
Many organizations, such as hospitals, often do not have an extensive supply chain risk planning team, and are often constrained by budgetary issues and cost pressures. As such, here are some basic steps that should be addressed to begin development of a playbook.
Establish a cross-functional crisis response team to create and continually update contingency plans. The team should include people from security operations, emergency management, supply chain management, inventory and warehouse management, IT, legal, finance, audit, and quality. To avoid bombarding employees with conflicting messages from different sources, one person should be put in charge of communications.
In consultation with the organization’s top leaders, the team should develop a playbook that clearly defines roles and accountabilities during a crisis. The team should organize scenario planning, simulations (“table top exercises”), and training. Remember that the most-critical employees may not be the most high-ranking – they might include the sanitation, security, and IT staff that everyone must rely on in an emergency. The crisis response team’s playbook should feature deployment plans for the entire workforce, and the plans should be tested and updated periodically. This is also the team that will “go into action” during a crisis.
Give the crisis response team the power it needs to act quickly in an emergency. It should have a direct line to top management and the autonomy to rapidly enact emergency sourcing procedures as soon as the organization declares an emergency. The team should also plan to meet on a daily basis, which means relieving the individuals working on this team from their “day job” responsibilities, as the crisis will likely consume a good amount of their time.
Several of the organizations I’ve spoken with have begun establishing post-pandemic resilience plan that are more reliant on these concepts. During COVID, many of them established response forums that brought together the commercial, logistics, operations, and procurement executives into daily planning meetings. In an emergency, agile responses to sudden new intelligence is imperative, and conditions were changing in a matter of hours, and a single daily meeting was often not frequent enough. As one executive noted:
We saw this thing was deteriorating in February, and immediately got everyone around the table. The demand signal for manufacturing was all over the place. Demand for some products were going through the roof, others were plummeting. Forecasting was useless. We created a steering team including quality that could plan across division, for products that had demand shooting up and those that would fall away. We had to determine which sites to gear up and which to gear down where the bottlenecks were occurring. The steering committee met daily and got better at decision-making. We kept it going for 6 to 9 months.
Develop a basic stockpile policy and budgeting for emergencies
Stockpile enough PPE and critical materials to cover the most-essential employees for at least two weeks, which should be (barely) enough time to get the organization’s PPE supply chain moving. Some companies have acquired six months’ worth of supplies. If you are carrying a lot of inventory, the risk is that expiration dates will catch up, so a plan for rotation of materials should also accompany this stockpile plan.
Many organizations I interviewed have built up 90 days or more of PPE. As noted earlier, I believe it is more important to develop approaches for stockpiling in partnerships with local state and private sector organizations locally, perhaps through a shared virtual warehouse. Alternatively, contracting arrangements with distributors could be developed, which requires visibility to inventory that is owned by the organization in their facility, and which the distributor is responsible for rotating to ensure that expiration dates do not pass.
Make funds available for emergency actions. In a crisis, ready cash may be a necessity. In the spring of 2020, many organizations faced a cash-flow crunch when PPE suppliers started requiring customers to pay for orders in advance. Most state agencies don’t allow pre-payments, so procurement officers had to obtain emergency approval for funds to pay anywhere from 50% to 100% of the cost of the order upfront.
Decide which areas of the business are critical for maintaining operations. In addition, create a clear prioritization of the order in which functions should receive things like PPE, Covid-19 tests, and vaccines. Remember that the people who manage and distribute PPE also need PPE, and that we need to vaccinate the vaccinators. And in general, vaccinate everybody!