Responding to risks resulting from Coronavirus (COVID-19) outbreak

Whilst the escalating medical and macro-economic implications of the virus rise, there are also increasing concerns regarding the impact on global supply chains and an unprecedented business continuity risk for companies. The continued spread of the virus may lead to larger and prolonged quarantined zones coming into effect. In this unknown, rapidly changing global environment, the team at Partners in Performance want to provide active help and support to organisations.

Conversations with clients and leading global experts have highlighted five risks:

Inbound supply constraints

With factories across China and other affected regions operating below 100% capacity, forecast shortfalls in materials and parts (particularly packaging, textiles and electronic components) could extend for several months.

Skill and knowledge gaps

With the World Health Organisation declaring a pandemic, there is a very real risk of key personnel becoming subject to quarantine due to infection, carers leave or self-quarantine.

Operational constraints

Operational capacity could be limited as a result of mass absenteeism from unplanned leave due to localised quarantine activities.

We are working with companies to develop a pragmatic, rapidly deployable and flexible response plan

COVID-19 response planning

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1. Prioritising the safety of their people and their families

This means:

Enacting clear policies and procedures to respond if someone is affected
Educating your workforce on symptoms and self-quarantine steps
Following the steps below to take opportunities to protect people

2. Rapidly assess key risks

Work through each element of your business value chain (supply, people, process, system) to understand where risks might occur. Assess likelihood and potential impact for each, to focus planning on key risk areas. Examples of risk assessment activities:

Trace key inputs to determine possible impact of COVID-19 on availability
Engage with customers to identify any changes to consumer purchase behaviour early
Map and monitor sales team travel

3. Plan for escalations

“What happens if…” is a key question management teams must ask to identify escalating, but plausible scenarios. This will ensure business continuity plans are prepared, communicated and embedded into the organisation. Scenarios we have seen include:

Infected employees force quarantine for multiple people
Local outbreak in a community results in school or aged care facility closures
Teams travel to higher risk areas

4. Take action quickly

Minimise risk by undertaking appropriate actions quickly, such as:

Cross-skill where key person reliance exists
Increase safety stock for critical high-risk categories
Talk to your customers – what compromises can be made? What is valuable to them right now?

5. Deliver agreed actions

This is key to ensuring business continuity:

Prioritise effectively to ensure your business is not swamped
Stop some activities to create space for key employees to deliver on priority actions
Measure the outcome and impact of actions

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Responding to risks resulting from Coronavirus (COVID-19) outbreak