10 Key Actions for Enterprises in An Epidemic

The outbreak COVID-19 is impacting Deloitte's clients, professionals, and the communities in which we live and serve. To help, we put together a collection of resources to inform our community and assist with preparing and responding to the risks associated with this global health crisis. 

At this moment, with world fighting an epidemic, many enterprises are actively fulfilling their social responsibilities. As key contributors to the country's economy, the basic social responsibility is to conduct business well and organize employees properly. In the face of the current epidemic, Deloitte believes that the greater the urgency, the more rules need to be in place to face challenges calmly.

The ongoing development of the new coronavirus has prompted the World Health Organization (WHO) to discuss whether the epidemic is a Public Health Emergency of International Concern. (PHEIC). Meanwhile, enterprises could face various strategic and operational risks, such as delayed or interrupted supplies of raw materials, changes in customer demand, cost increases, logistics shortages leading to delays in delivery, employee health and safety protection issues, insufficient manpower, and logistics and settlement challenges related to import and export trade. 

Based on our analysis of the leading practices of multinational companies in Business Continuity Planning (BCP), emergency and major emergency management of infectious atypical pneumonia, H1N1 influenza, Ebola hemorrhagic fever and other major infectious diseases, we recommend companies to take the following 10 actions to address future uncertainty:

1. Establish emergency decision-making teams. 

·       An enterprise should immediately set up decision-making teams for temporary major issues, such an "Emergency Response Team" or "Major Emergency Management Committee", to build the whole objectives and emergent plan and ensure the fastest possible decisions can be made in various situations. 

·       For committee members, enterprise should evaluate its own professional strengths and, if necessary, bring in professionals to match its business and regional characteristics.

2. Assess the risks and clarify emergency response mechanisms, plans and division of labor. 

·       Many multinational companies have established "emergency contingency plans" or "business sustainability plans", usually implementing these immediately in the event of a major emergency. 

·       If a company has no such plan, it should conduct a comprehensive assessment of all risks straight away, including employee, outsourcing, government, public and supply chain issues. According to risk assessment, the company should respond to issues around office space, production plans, procurement, supply and logistics, personnel safety and financial capital, as well as arrange other major matters related to emergency plans and division of labor.

3. Establish a positive information communication mechanism for employees, customers and suppliers, and create standardized communication documents. 

·       It is important to stabilize supply chains and the mindsets of internal employees and external partners, as well as strengthen the management of publicity and customer services to avoid negative public opinion caused by negligence or inconsistency. 

·       At the same time, a company's existing information system should be used to collect, transmit, and analyze epidemic information and issue prompt risk warnings.

4. Maintain the physical and mental wellbeing of employees, and analyze the nature of different businesses and jobs to ensure appropriate resumption of work. 

·       According to Deloitte’s latest human resources survey on epidemic responses (click for the report), 82% of companies believe "flexible work arrangements" are now the most important means of employee management. We recommend companies immediately establish flexible vacation and work mechanism, using technical means to establish non-face-to-face or off-site work parameters during special periods. 

·       Besides enterprise should establish a staff health monitoring system and keep employees' personal health information confidential. 

·       Enterprise should ensure the safety of working environments by strictly cleaning and disinfecting workplaces in accordance with national and regional public health authorities' hygiene management requirements for periods of major infectious diseases. 

·       Enterprise should strengthen epidemic safety education, establish fact-based employee self-protection guidelines, and increase awareness of safety and risk prevention.

5. Focus on supply chain risk response plans. 

·       Multinational companies usually arrange to utilize "redundant" office facilities, production capacity plans, and raw material procurement channels in multiple countries or regions in advance, so the work in the "infected area" can be quickly undertaken or production will not be stopped due to lack of capacity or raw materials. 

·       In inventory management, organizations must consider the prolonged inventory digestion cycle caused by blocked consumption, the corresponding increase in financial costs, and pressure on cash flow. At the same time, in industries with long production cycles, organizations must prepare in advance for a rebound in consumption once an epidemic has eased to prevent the risk of insufficient inventory.

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