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The Coronavirus Checklist: Nine Steps to Protect Your Company

Rachel Conn, a labor and employment lawyer with Nixon Peabody LLP, suggests establishing a communicable illness policy.

The Coronavirus Checklist: Nine Steps to Protect Your Company
Illustration: Patrik Mollwing For BloombergBusinessweek

(Bloomberg Businessweek) -- The business world was caught off guard by Covid-19. According to a report by Dun & Bradstreet, 94% of Fortune 1,000 companies are experiencing supply chain delays—not to mention workplace absences, lower productivity, travel cutbacks, and reduced trade and investment. “Many companies had plans for floods or earthquakes, but their backup factories were in another region of China,” says Razat Gaurav, chief executive officer of Llamasoft Inc., a supply chain software provider. “This should be a wake-up call for a lot of industries.”

Bloomberg Businessweek talked to a dozen crisis planning and supply chain experts about how to prepare for continued complications from the coronavirus, as well as future disruptions. Tony Adame, an associate director at Aon Plc, says many executives are good at planning for short-term crises, such as an active shooter or power outage, and ignore long-term impacts. Follow this checklist to make sure you’re doing both.
 

The Easy Stuff

 
1. Know the basics. Depending on the crisis, Adame says, business disruptions require four types of responses:

A) Emergency response and safety. This is making sure people and facilities are safe.

B) Crisis management and communications. Analyzing the situation and informing staff, media, suppliers, and customers of the crisis and the plan.

C) IT recovery. The tech department protects corporate information, hardware, and software.

D) Business continuity. Keeping essential operations running.
 
2. Establish a war room—three of them. Start on-site, but have off-site and online options as backups. They should be “cross-functional,” Gaurav says, meaning they’re places to reach out for collaboration on, say, sharing a factory with another business.
 
3. Update your HR guidelines. “The policies shouldn’t be specific to any individual event,” says Doris Dike, a health-care attorney at Friedman & Feiger LLP. They should include remote work rules and family medical leave allowances.

Rachel Conn, a labor and employment lawyer with Nixon Peabody LLP, suggests establishing a communicable illness policy. It should include what sicknesses are covered, employees’ obligation to report them, sick leave rules, how the employer will communicate and keep workers informed in an outbreak, and travel restrictions.
 

The Medium-Hard Stuff

 
4. Identify critical operations. A finance department, says Adame, might have to pay vendors and employees, but its tax and audit work could be put off. Then figure out your critical needs, such as raw materials or subcontractors, and plan for how you would maintain those supplies and relationships.
 
5. Assemble skeleton staffs. “Prepare for situations when critical personnel are unable to come into work,” says Brion Callori, manager of engineering and research at insurance company FM Global.
 
6. Consider a digital supply network. Execs should spend their time making decisions, not calling Asia to track down what’s where. DSNs link businesses with suppliers, customers, and logistics companies.
 

The Hard Stuff

 
7. Work those connections with companies you rely on. Are you a priority—or client No. 168? Although there’s not much companies can do about pecking order during the Covid-19 crisis, building relationships in every facet of production now will help in a future disruption. “The power behind the supply chain is people,” says David Cahn, director of global marketing at Elemica Inc., a digital supply network. For example, China is requiring that factories obtain health department approval to reopen, and if you know the local inspector, getting a signoff could be a smoother process, says Rodney Manzo, CEO and founder of Anvyl Inc., another DSN.
 
8. Defuse your supply chain time bomb. Corporate risk is defined by the number of buffer days in your inventory and your short-and long-term options for sourcing, says Llamasoft’s Gaurav. Work on backups—and backups to backups. Industries with more regulatory oversight, such as pharmaceuticals, need even more buffering, because switching facilities requires time-consuming inspections.
 
9. Think creatively. Of Manzo’s hundreds of Chinese suppliers, 93% are affected by Covid-19, with an average manufacturing delay of 17 days. If inventory is held up, do you have alternative markets to sell in? AJ Mak, who runs Chain of Demand Ltd., an artificial intelligence supply chain company, says a clothing retailer could sell late-arriving summer wear in Australia, New Zealand, and Brazil.

Have you read ISO 22301?

The International Organization for Standardization’s guidelines include No. 22301, which deals with disturbances. It’s dense—“This document specifies requirements to implement, maintain, and improve a management system to protect against, reduce the likelihood of the occurrence of, prepare for, respond to, and recover from disruptions”—so just Google “ISO 22301 in plain English.”

To contact the editor responsible for this story: Bret Begun at bbegun@bloomberg.net

©2020 Bloomberg L.P.

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