Survey Reveals 68 Percent of Large U.S. Companies are Unprepared for a Pandemic

BOSTON -- AMR Research has released findings from a recent field study that revealed 68 percent of companies with more than $1 billion in revenues are not prepared for a pandemic, such as an avian flu outbreak. The survey highlights the fact that a majority of companies have not implemented a risk management strategy.

AMR Research identified several areas that companies could prepare and invest in order to lessen the effects of a pandemic. The following are brief descriptions of those strategies, as well as the percent of companies that have prepared for each strategy:

* Supply Risk Planning (22 percent) -- How prepared are companies to re-source supplies and goods from other areas? Understanding and optimizing the nodes in the supply chain in case large geographies are more affected than others is vital.

* Home Bound (38 percent) -- Companies must have the technology in place to support customers and employees that need to work from the safety of their own home.

* Self-Service (29 percent) -- Allowing employees and customers to transact business remotely and to create workflow will limit exposure.

* Training (22 percent) -- Workers should be trained in multiple jobs, similar to the military, so that there are many options should a colleague become disabled. Such cross-training not only helps in case of pandemic, but it also helps stem the ongoing brain-drain problem so many companies are having to deal with as skilled workers retire or leave for other jobs.

* Risk management (43 percent) -- Evaluating scenarios for corporate-wide financial risk for the present, the near term, and the future.

"Large businesses play a key role in delivering critical supplies and services in a global economy. Evaluating their ability to do so is vital to their operations," said Tony Friscia, president and CEO of AMR Research. "Ignoring the possibility of a pandemic or another low-probability, high-impact event is not a strategy -- building a risk management framework is."

The report highlights the need for a supply chain risk management strategy notwithstanding a pandemic. In recent history, businesses have experienced significant event risk in the form of port strikes, natural disasters, terrorism, and outbreaks such as SARS, in addition to increasingly constrained logistics, longer supply lead times, and more variable demand and supply. AMR Research has found that companies with an operational risk management strategy have seen a lower impact to business than competitors.

"Risk management is not just about creating a plan and sticking it in a binder on some executive's shelf -- it's about putting a program in place to assess the risks that your supply chain may face, and building a plan for mitigating those risks," said Mark Hillman, research director at AMR Research.

Source: AMR Research