Whether it is fire, hurricane or even raids from Immigration and Naturalization Services, serious business disruptions have been no stranger to the pallet industry.
Increasingly, business continuity planning has become a focus for larger companies, including plans for hurricanes, earthquakes, and now flu pandemic.
Flu pandemic planning is rapidly becoming a requirement for many larger customers, pushed down to the distribution center or plant level by corporate headquarters. Many large customers are preparing contingency plans for a H5N1 flu outbreak; if one occurs, it could have serious impacts not only on their business but on society at large.
The U.S. Department of Health and Human Services has a Web site — www.pandemicflu.gov — devoted to information about avian and pandemic flu.
According to the Web site, “An especially severe influenza pandemic could lead to high levels of illness, death, social disruption, and economic loss. Everyday life would be disrupted because so many people in so many places become seriously ill at the same time. Impacts can range from school and business closings to the interruption of basic services such as public transportation and food delivery.”
While the impact of any outbreak will hinge on such factors as the virulence of the flu strain and how widely it spreads, the Canadian Council of Grocery Distributors estimates that over 280 employees per 1,000 will likely become ill with the virus in a new serious outbreak and that more than 28 will die. The employee group will lose approximately 40 immediate family members per 1,000 employees.
A flu pandemic would be a disruption fundamentally different than other disasters. Unlike fire, earthquake or hurricane, there is no crippling damage to plant and property. Unlike an immigration raid that could eliminate a large portion of a company’s workforce, the rest of the labor pool at large is not unaffected. Translation: the rest of the labor market takes a hit, too. After an immigration raid, the supply of labor is still normal. In the face of a pandemic, not only is a company’s workforce hit, but so is the entire available labor pool. In the event of a flu pandemic, pallet business owners should anticipate a number of challenges, including:
1. Widespread absenteeism and mortality. Experts caution that absenteeism rates could reach 25%–30%
with plant-level pockets of absenteeism up to 50%.
2. Disruption to supply delivery. Absenteeism or fuel shortages could result in disruption to incoming supplies of lumber, nails, pallet cores and other materials.
3. Disruption to customer demand. While volume of some accounts will decrease, essential services, including food and medical suppliers, will be required to soldier on in the face of a severe flu outbreak. In the midst of their own staff shortages, they may not have the staffing for non-core activities such as sorting or retrieving pallets, and they may actually require more pallets than usual.
4. There will be variability of demand within market segments. Anticipate that chain grocery retailers will be stronger than food service distributors with a lot of restaurant business. People can be expected to avoid restaurants, public transit, and social events where unnecessary public interaction takes place.
5. In addition to drivers, fuel may be in short supply. Large food distribution centers are making arrangements with emergency services planners for priority access to fuel in the case of an outbreak.
6. Some drivers may not want to deliver into particularly hard-hit areas.
7. There is the danger of cross-infection among co-workers or employees of other companies in the course of doing business. Control and management of infection at the worksite may be of extreme importance.
8. Some employees may be afraid to go home.
Now is the time to start planning how your company will respond to a flu pandemic, both internally, as well as externally. As part of your continuity plan, begin the process with staff, customers, and suppliers.
For customers, ask them if they are developing a flu pandemic plan and how they envision what changes may be required of you in your role as a pallet provider. For example, food distribution centers are bracing for anticipated driver and warehouse staff shortages.
A pallet company might have an opportunity to pool resources as well as obtain fuel. Many customers also are building inventory levels of key supplies or materials. Some customers may want to increase on-hand pallet inventory for essential business activities either at their location or yours as part of their pandemic planning.
In my next column, I will look at plant-level pandemic management planning in order to mitigate the impact of a flu outbreak and help maximize staff confidence in your preparedness.
For more information, visit www.pandemicflu.gov.
