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Pandemic planning and your Supply Chain

01 September 2009

If nothing else, the H1N1 virus has to make us realise how much we depend on the supply chain and how vulnerable that supply chain is in reality. We may very well develop and implement the best of pandemic plans for our organisation; we will never be totally sure how well our critical supplier will be prepared, even if they think they are. Still, the threat of pandemic is looming…

What to do then? Here is a list to help you start working on this:

1)       Identify and separate critical suppliers from other suppliers

 What you need to do here is list only the suppliers you cannot do business without. If you have a recent BIA, you can start by looking at the suppliers for your critical business functions. If you do not have a recent BIA and do not have the time to perform one, you should identify your critical products and services and, from these, identify the suppliers supporting them.

 2)       Analyse agreements with critical suppliers to identify the gap between “expected” and “agreed”

 For each critical supplier, define clearly your expectations in terms of support, delivery delays, stock maintenance, expertise, quality, quantity, etc. Then, read the contractual agreements and understand how the suppliers are expected to perform during a pandemic situation as per the contractual agreement. Identify the gap between what is expected and what is agreed.

 3)       Discuss / negotiate / agree changes to existing agreements

 This is where you need to work very closely with your legal team and procurement team. They need to understand that a pandemic situation is not business as usual and that regular clauses for operational problems may not be applicable in this case. A good example is the “force majeure” clause found in most contracts that could get the supplier “off the hook” in a situation like a pandemic.

There is no magic here; negotiation is likely to be intense, and even difficult in some cases. After all, your critical suppliers also have their issues to deal with. Do not be surprised if they require additional fees to cover your pandemic related requirements. You may also find out that some of your suppliers are not in a position to support these requirements. Tough decision may have to be taken then.

4)       Review implementation of changes with critical suppliers

So, you have reached agreements with your suppliers. Detailed implementation plans and deadlines must be defined and agreed. And you have to follow-up on these until implemented to your satisfaction.

5)       Exercise with critical suppliers

Then, exercise with your suppliers and see how your plan and theirs work together. Identify problems, get them resolved and exercise again until satisfied with the results.

 6)       Maintain frequent contacts with critical suppliers

Throughout the process, and after, always maintain communications channels open and deal swiftly with issues as they arise. You need to work closely with your critical suppliers at all times. They may even need your help to be able to help you.

Remember, we are all in this together.

Denis Goulet, BCCE, CBCP, MBCI
ContinuityLink
denis.goulet@continuitylink.com 

About the author
Denis Goulet is a recognised expert in the Business Continuity Management (BCM) field with over 20 years of experience, focusing on the Financial and the Telecommunication industries, but covering as well Pharmaceutical, Manufacturing, Distribution and Government organisations. Over the years, Denis has helped these organisations with the definition, the development, the implementation, the maintenance and the testing  of their Business Continuity program.

Experienced and enthusiastic speaker since 1994, Denis has spoken on various subjects like BCM exercises, Business Impact Analysis (BIA), selling BCM to senior management, etc. He has developed over time the required communication skills for presenting to all types of audiences (technical staff, business representative, managers, executives, etc.) in the private and public sectors.