2 SET UP A CONTINGENCY PLAN Companies also need to plan for how to deal with a possible COVID-19 outbreak in their own facilities. If this should occur, the local authorities are ready to assist, e.g. Danish Patient Safety Authority or Swedish Civil Contingencies Agency. However, we highly recommend that you also make sure to have a contingency plan in place for if an outbreak should occur in your business. The plan should state which actions to take to run the business in the event that a high number of employees is quarantined for 14 days. These actions should be as specific and detailed as possible to allow for a swift response. Virtual meetings and knowledge-sharing platforms such as Microsoft Team, Skype, etc. should also be part of the contingency plan. And we recommend that you immediately ask your IT department to ensure that these virtual platforms are fit for running the business remotely as of now. At the end of the day, keep in mind that a plan is nothing, but planning is everything. 3 MONITOR THE FULL SUPPLY CHAIN The supply chain is a potential weak point for companies in a global crisis such as the one we are in now, in particular for manufacturing companies. We recommend business leaders to establish an end-to-end war room for the purpose of monitoring the full supply chain from suppliers to manufacturing/production and to customers. This is a cross-functional task to be led by all C-levels to ensure a cross-functional view on your supply chain situation at any given time. The war room (physical or virtual) should have mandate to take concrete actions; both upstream (suppliers), midstream (production) and downstream (customers). UPSTREAM MIDSTREAM DOWNSTREAM The CPO needs to stay in control of supplies and take immediate action and follow up on suppliers of critical components. • Reactive risk management is needed if a supplier of parts has already declared a shutdown. Now is the time to activate the dual sourcing plans • Preventive risk management should map out any potential disruptions if the COVID-19 spreads to new regions, potentially closing down other factories • Logistics need to consider alternative means of sea/rail/ road/air transportation. As an example, one high-end automotive manufacturer is flying out critical components in suitcases from China to secure production The COO needs to take control of the planning. This planning should cover: • Compliance issues with respect to local labour laws in case a production site is closed down for a longer period of time • Considerations on how to secure critical parts and managing stock controlling • Strict monitoring of raw materials and finished goods inventories needed The CCO needs to take measures and precautions to closely monitor the behaviour and performance of key customers. • Look for any new demand patterns that should be taken into account • Look for changes in sales channels as well. In China, online retailing has surged during the outbreak • The Sales & Operations Planning (S&OP) manager needs to keep a close eye on the market – a situation like this is stress-testing your S&OP process for real • Take a close look at the inventories of finished goods so they do not spin out of control and hurt your cash flow • Consider changing the cadence of your monthly S&OP meetings to a weekly basis, and let meetings be monitored by the C-suite in the war room 3
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