You've just gotten word of an avian flu outbreak among workers at your contract cell phone manufacturing plant in China. You and your colleagues on the emergency response team have a lot of decisions to make. For example, how are you going to get your American employees home? How will you deal with cargo handlers who refuse to deal with a shipment from that plant? And what are you going to do about the company executive who boarded a plane for home just hours after visiting the plant and is unaware that he may have been exposed to the flu?
These and other tough questions were posed to a panel of eight executives participating in a simulation at the Massachusetts Institute of Technology's Center for Transportation & Logistics (CTL). The simulation, held in mid-April, was part of CTL's day-long symposium on business disruption and recovery. It was designed to demonstrate how readily a flu outbreak could disrupt a global supply chain and provide examples of the issues the emergency response team would confront as news of the plant's closure rippled through the global supply chain.
Before an audience of 200, the panelists—executives from Intel Corp., EMC Corp. and Arnold Communications—responded in real time to the unfolding emergency, which was shaped by prompts and prescripted news bulletins delivered by a moderator. Among other things, panelists had to decide when to call in a secondary supplier and how to reconfigure the distribution network on the spot to reflect a change in suppliers. They also had to figure out how to keep lines of communication with the CEO open and how to respond to calls from the media and financial analysts.
CTL Director Yossi Sheffi says the center devised the exercise to get companies thinking about contingency plans for global disruptions such as an avian flu pandemic." In this interconnected world where supply chains span the globe," he says, "companies must examine what actions they will need to take to protect employees, customers and the operational integrity of the enterprise ..."
Food inside
At least one of the companies represented on the panel has already mapped out its course of action. At a time when few businesses have begun preparing for a pandemic (84 percent of the respondents to a recent DC VELOCITY poll had yet to develop a flurelated contingency plan), Intel Corp. has not only drafted a plan but has also begun implementing it.
Over the past 12 months, for example, the chipmaker has upgraded its infrastructure to allow nearly half of its 105,000 employees to work from home if necessary. It is also socking away enough food at its major facilities to feed onethird of its employees for three days.
Why is Intel investing time and money to plan for something like a pandemic outbreak, which could be six months—or six years—away? "It's like buying insurance," says Steve Lund, director of the company's crisis response team. "Hopefully you never have to cash it in. Yes, we are considered a cost [on the balance sheet]. And not all companies are willing to invest that money. But we still provide a service that allows you to be much more profitable in the future [should a crisis occur]."
Gartner, Inc.