Tag: risk management methods

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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Lean Contingency Planning For Lean Operations – IT and the BSOD

Coincidentally, we are having a first hand experience with the Blue Screen of Death or BSOD with one of our laptops today.  The completely unexpected critical system error that renders Windows completely helpless.  If this isn’t on your list of IT concerns, it should be.

In our case the error appears to be video related – driver or card.  Most IT specialists know how to deal with these types of errors but for the average user, the message that appears is enough to make you sweat.  If the system can’t fix the error, you may very well end up staring at a Black Screen – just as we are.

How is it that we were still able to produce this POST?  Well, we are currently executing our contingency plan and using another system that is operated independently.  Most companies back up their data to prevent or minimize loss.  Another concern that is often overlooked is accessibility to that back up data in the event the system goes down.

What have we learned?

We are not the first to experience this problem.  We did a Google search using some brief terms such as “Computer Black Screen”, “Laptop Black Screen”, and we even Googled parts of the error message that appeared on the screen.  The result?  Thousands of people have experienced this same error.

The point of this post is to demonstrate that you do not have to re-invent the wheel to determine potential solutions or to discover problems that may occur.  Quite likely, they may already have happened and solutions are already developed and available.

There are two probable solutions to our video issue:

  1. Update the video device driver (Free)
  2. Replace the video card (Cost $)

Hopefully, the first solution is the answer to our problem.  Video cards are not sitting on our shelf and the downtime may be extended if we can’t find something locally.

It is noteworthy that we have not yet identified the root cause of this failure.  We haven’t loaded any new software or experienced problems in recent history.  This may be the topic for a future problem solving post.

Regardless of the outcome of our present dilemma, we have learned that it is a good idea to keep device drivers up to date.  As a planned activity, this may prevent some of you from having to experience the BSOD as we have today.

The loss incurred for this event is more than just the cost to repair.  This computer may be down for a few days.  How much is the down time worth?  Unless we play out the scenarios that may threaten or pose a risk to our business, we may never have the opportunity to prepare for the event until it actually happens.

Keep an open mind and use the resources available to you to help solve the problem.  In some cases a simple Google search could confirm your concern in a matter of seconds.

Until Next Time – STAY Lean!

Contingency Planning For Lean Operations – Part III

Contingency Planning for Lean Operations – Part III

 

Deaths spark huge crib recall” was the main headline of today’s Toronto Star (24-Nov-09).  This recall was the result of 4 infant deaths and affects up to 2.1 million units sold.  Click here to access the full article.  This announcement has made headlines throughout North America and is certain to be featured on all of the major network news stations.

Managing a major product recall is likely one of the more significant events where contingency plans are fully executed and developed.  As tragic or unfortunate as the events may be, it is imperative for a company to manage the recall event in professional and responsible manner.  While it may seem difficult to prepare for an event that has not yet occurred, learning to anticipate the sequence of events to recovery and to script are necessary steps to developing an effective contingency plan.

What are the elements of an effective contingency plan?

We will be covering the elements of an effective contingency plan over the next few posts.  Before we get too far into the process, it is important to recognize that one of the critical skills required as part of the contingency planning process is the ability to perform an effective risk assessment.

It is not our intent to cover all aspects regarding risk assessments and analysis as this would require a book in itself.

A newly released book, The Failure of Risk Management – Why It’s Broken and How to Fix It, by Douglas W. Hubbard (copyright 2009) and published by John Wiley & Sons, Inc., provides extensive insight and resources to perform effective Risk Management Assessments and Analysis.  The reasons why some risk management methods fail or are susceptible to failure are also covered in detail.

As exemplified in the opening article, there is no real means to measure the net effect or impact of a recall campaign of this magnitude.  Elements such as Consumer Confidence, Brand Loyalty, Loss of Life, or Warranty are difficult to value in tangible terms.

Unfortunately, there are too many examples of crisis events where the knowledge was available to rectify or fix the situation before any tragic event occurred.  As heard in many workplaces, “Why is that nothing is done until something bad happens?”

An effective contingency planning is not only designed to manage tragic or crisis events, it should also aid to identify potential failure modes that can be captured and addressed before a product is ever released for mass production or to market.  Consider the following two scenarios:

  • Scenario 1: (Highly unlikely …)
    • Jill:  What if the part fails?
    • Jack:  We’ll recall it.
    • Jill:  How will we do that?
    • Jack:  We have an excellent recall management process

What if the dialogue took a different turn as follows:

  • Scenario 2:  (More likely …)
    • Jill:  What if the part fails?
    • Jack:  What could possibly go wrong?  It’s perfect.
    • Jill:  Engineering said it barely passed the tests.
    • Jack:  Well, maybe we should take another look at the design.
    • Jill:  Great, you know we can’t risk a recall.

Developing a Contingency Plan – The Process

1.  Corporate Responsibilities – Charter

If contingency planning ever concerns an individual person in the company directly, it is the Chief Executive Officer or the president who are personally at risk of significant legal ramifications and also the greatest level of exposure.

This past year Maple Leaf Foods experienced a major Listeria outbreak at one of their food processing facilities.  Contaminated product reached the market place resulting in illness and loss of life.  A major recall was initiated and the company immediately initiated corrective actions.  During this crisis, the CEO took personal responsibility for public relations, communicating the strategy, and ultimately overseeing the recovery process.

The CEO or President should be leading the charge for the development of contingency plans and to assure their effectiveness.  To this end, it is also imperative that the team responsible for formulating the plan includes a cross-section of people from across the company.

The CEO or President will also want to assure that everyone is trained to respond to events that pertain their specific areas of responsibility.

2.  Contingency Planning – Form a Team

As we mentioned in our previous posts, contingency planning is an enterprise-wide process.  The collective intelligence of the team is greater than that of any team member.

You should consider the skill sets that may be required to support the team.  Although we are not suggesting that you need to be an expert in probability theory or statistics, someone having exposure to these types of assessment tools or an outside consultant may be worth the effort.

It is not possible for one committee to prepare contingency plans for every area in the company.  When forming teams, how the skills and levels of expertise required to support the team in one area may be vastly different for another area.  For example, Product Engineering and Operations will have different failure modes to contend with.

To ensure the appropriate resources are available, we recommend that  executive management or a steering committee are assigned to oversee the contingency planning and development process.

Based on some of the scenarios cited in this post, it would stand to reason that most CEO’, Presidents, and / or owners are primary stake holders in the Contingency Planning process.

More will follow:

  • Performing Risk Assessments
  • Contingency Planning Tools
  • Do The DRILL
  • Publish
  • Review

Until Next Time – STAY Lean!