Tag: Contingency Planning for Lean

Contingency Planning For Lean Organizations – H1N1 (Swine Flu) – Reference

In our first post on Contingency Planning For Lean Organizations, we made reference to the current situation regarding the H1N1 virus or Swine Flu. We also suggested that history may provide relevant information that can be used to aid in future crisis event planning.

Michael A. Roberto, author of “Know What You Don’t Know” copyright 2009 by Pearson Education Inc., presents a case surrounding the 1976 “swine flu” incident to exemplify how faulty analogies can have devastating effects. In his book, Michael Roberto cites research of Richard Neustadt and Ernest May.

An excerpt from the book, reference pages 77-78, reads as follows:

“In that situation, President Gerald Ford and his advisors drew an erroneous analogy to the infamous flu epidemic of 1918. The faulty analogy led them to dramatically overestimate the seriousness of the problem they faced. As a result, they embarked on a very comprehensive and unnecessary immunization program. Roughly five hundred people experienced a serious side effect that was linked to the immunizations, and twenty five people died.”

This may explain the slow, seemingly uncoordinated, pace of the government to address the current H1N1 outbreak. Many people remain skeptical as to whether the immunization process is safe. This skepticism may be warranted. Again, referencing Michael Roberto’s book “Know What You Don’t Know” (page 78), “More people died from the immunization than from the flu itself.”

The experts of the day advised that this could be another epidemic. Two prior non-swine flu outbreaks, one in 1957 and the other in 1968, caught the government off guard. It is more than noteworthy that an estimated twenty million people were killed world-wide by the virus during the epidemic of 1918.

With mounting pressure from the Centers for Disease Control to avoid history repeating itself and in an effort to be pro-active, immunizations were ordered and given to an estimated forty million people. What would you have done?

For more information we recommend reading “Knowing What You Don’t Know – How Great Leaders Prevent Problems Before They Happen” by Michael A. Roberto, copyright 2009 by Pearson Education Inc., publishing as Wharton School Publishing, Upper Saddle River, New Jersey 07458 (ISBN: 0-13-156815-9), Pages 202.

Also see Warner, J. “The Sky Is Falling: An analysis of the Swine Flu Affair of 1976.” http://www.harverford.edu/biology/edwards/disease/viral_essays/warnervirus.htm

Until Next Time – STAY Lean!

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Contingency Planning For Lean Operations – Part I

Contingency Planning For Lean Operations – Part I

Lean operations are driven by effective planning and efficient execution of core activities to ensure optimal performance is achieved and sustained.  The very nature of lean requires extreme attention to detail through all phases of planning and execution.  Upstream operations simply cannot tolerate any disruptions in product supply or process flow without the risk of incurring significant downtime costs or other related losses.

Effective risk management methods, contingency plans, and loss prevention strategy are critical components of successful operations management in a lean operation.  Risk management and preventing disruptions is the subject of contingency planning and requires the participation of all team members.

Successful contingency planning assures the establishment of an effective communication strategy and identification of core activities and actions required.  Contingency plans may require alternative methods, processes, systems, sources, or services and must be verified, validated, and tested prior to implementation.

Understanding and assessing the potential risks to your operation is the basis for contingency planning with the objective to minimize or eliminate potential losses.

Inventory represents the most basic form of contingency planning.  Safety stock or buffer inventories are typically used to minimize the effects of equipment downtime or disruptions in the supply chain. 

The levels of inventory to maintain are dependent on a number factors including Lead Time, Value, Carrying Cost, Transit Time (Distance), Shelf Life, Minimum Order Quantities, Payment Terms, and Obsolescence.

Why is this relevant?

Material and Labour represent two key resources that may be influenced by external factors that are beyond the control of any company policy or practice.  Internally controlled or managed resources such facilities, equipment, and tooling are less susceptible to unknown elements.  For the purposes of this discussion, we will examine Labour in a little more detail.

The H1N1 virus, originally known as the Swine Flu, is the latest potential health pandemic since the outbreak of SARS only a few years ago.  The government has been struggling to organize mass immunization clinics and to engage the media to aid in the cause.  In the meantime, the potential impact of the H1N1 virus on your operation remains to be an unknown. 

Experts have commented to the media that the lessons from the SARS outbreak have still not been learned.  One would expect that past practices would have already been adopted into new best practices from our experiences with other similar events in our history.

Government agencies at all levels (Federal, Provincial, and local) have mismanaged the activities required to procure and distribute the vaccine, and failed to provide an effective communication and immunization strategy to ensure the risk to public health was minimized and the at the very least understood.

The lack of coordination and accountability for the success or failure of the communication strategy, procurement and distribution of the vaccine, and other related activities are strong indicators that the planning process did not consider the infrastructure requirements and relationships needed between levels of government.

The lack of an effective communication strategy introduced confusion and speculation in the media and the general public.  Mass education only seemed to become more aggressive as incidents of severe H1N1 complications and related deaths were reported in the media.

If this really was a pandemic event, many operations today would (and may still) be adversely affected due to direct or indirect (supply chain) labour shortages.  Do you have contingency plans in place to address this concern?

It could be argued that “if we are affected to this extent, then our customers will be as well.”  This is not necessarily true unless your customers and / or suppliers are located in the same immediate area or region of your business.

People travel all the time, whether they are commuting to work from out-of-town or traveling to or arriving from a foreign country on business.  The source of exposure is beyond your immediate control. 

What other elements can directly impact labour?  We will explore some of these in our next post.  In the meantime, keep your hands washed and remember to cough into your sleeve.

Until Next Time – STAY Lean!

Unexpected and Appreciated – Uncommon Courtesy:  This morning, a person cut into the drive through lane ahead of us – not realizing the gap in the line was there for thru traffic.  Recognizing the error in drive through etiquette and to make amends, we were pleasantly surprised by the “free” coffee at the pick up window.  Thank you ladies!