@ Supply Chain Management


Swine flu and Preparedness

As you very well know, Swine flu is in the news and its effect on the supply chains of the world is a foregone conclusion regardless of whether it peters out and dies or it becomes a full blown pandemic. As I’ve said numerous times on this blog, extended multi-country supply chains increase the number of uncertainties that get to act on the length of the supply chain. However, at least from the point of view of the  United States, this is happening next door – which only goes on to show that even shorter supply chains suffer from the same kind of risks.

But I have a very different sort of observation to make. Apparently, if these news reports are to be believed: Panasonic Sends Workers’ Families Home on Flu Risk, Nikkei Says.

Feb. 10 (Bloomberg) — Panasonic Corp. has instructed Japanese workers assigned to parts of Asia, Africa, Eastern Europe and South America to send family members back to Japan because of the risk of outbreaks of new influenza strains, Nikkei English News said, without citing anyone.

The Osaka-based electronics maker has asked workers’ families to return home by the end of September, the report said, adding it was not known how many people were affected by the decision.

Please note the date of the report: February 10th, 2009. Today is April 28th, 2009. Curiously, this was also picked up by CIDRAP (Center for Infectious Disease Research and Policy) here: Panasonic’s pandemic-related move fuels questions, concern.

Michael T. Osterholm, PhD, MPH, director of the University of Minnesota Center for Infectious Disease Research and Policy, publisher of CIDRAP News and the CIDRAP Business Source, said he fielded a number of calls today from people in several business sectors who were worried about the significance of Panasonic’s move. "They wanted to know if this is for real," he said.

Penny Turnbull, PhD, senior director for crisis management and business continuity planning for Marriott International, Inc., said she was surprised and perplexed by Panasonic’s decision, given that there has been no significant change in the number, location, or transmission of avian flu infections in humans. She said the implications for other companies aren’t clear.

"Companies might wonder on what intelligence Panasonic based this decision, but I find it hard to believe that any will be following suit in the near future, though they might start monitoring the news more closely for some time to come," said Turnbull, who is also an editorial board member of the CIDRAP Business Source.

Osterholm said heightened concern over the Panasonic news is a reminder that a company’s decisions can have far-reaching unintended consequences and that in the early days a pandemic is likely to generate hysteria, not factual or science-based information.

He also said that Panasonic’s decision isn’t a breaking news story, because the company reportedly issued the new policy in December. "If this was a real pandemic concern, companies would have minutes to hours, not weeks to months, to prepare for this," he said.

Panasonic’s decision to repatriate the families of employees in some of its locations raises more questions about the company’s motives or if its risk assessment is seriously flawed, Osterholm added. "This tells me how ill prepared some of these companies are," he said.

As you might very well note from the above, Panasonic’s move didn’t happen in a vacuum – there were other firms that observed it and decided that the factors on the ground didn’t warrant such a move. Perhaps, Panasonic was only lucky or perhaps their risk assessment model led them in an altogether different direction – that is what I’d like to know about. But one thing is for certain, if you had been waiting for CNN, you’re dealing with a wholly different set of scenarios.

Keep safe!!

Category: Personal Observations, Strategy, Supply Chain Management


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April 2009