At the heart of the news, one story exists. And boy, I wish it was a fictional one. It was reported this morning by and NBC News that a 23-month-old Mexican child is the first swine flu death occurrence in the United States, having died in a Houston hospital (the full story). The child was visiting family members in Texas when he began to develop symptoms. There is said to now be almost 100 cases of the swine flu currently in the United States and that number could increase before you finish reading this blog. Mexico has been hit the hardest by the outbreak, having reported more than 150 deaths and 2,400 illnesses. More cases have appeared in other countries as well and the World Health Organization is considering raising its pandemic alert level to phase 5.

I do not want to repeat what several blogs have already touched upon regarding this outbreak. Supply Chain Matters and Spend Matters are just a few blog sites that have already discussed the impact the swine flu could have on companies’ supply chains. Great emphasis should be placed on assessing the risk this outbreak may have on your company. As global panic escalates, supply chains may weaken.

To try to make light of the situation at hand, I thought I would compare the story of “The Three Little Pigs” to the swine flu outbreak and discuss how the old folktale relates to a company’s supply chain. The main characters of the rapidly changing swine flu story, however, are not protagonists and there is no happy ending in sight. I will assume that you are familiar with the story, but I will provide a quick rundown to refresh your memory. Three little pigs are sent out to live on their own and provide for themselves. Their first instinct is to find materials to build a house. The first pig comes across a man with straw and asks (I like to think the pig negotiated) for some straw to build a house. The second pig does the same but uses sticks and the third pig chooses brick. A wolf on the hunt for some pork comes along and simply huffs and puffs and blows down the straw and stick houses and eats up the two pigs. The wolf then makes his way to the third little pig’s house and attempts to blow the house down but is unsuccessful. After several blown efforts to con the pig out of his house, the wolf decides to enter the house by way of the chimney. The pig realizes the wolf’s plan and sets up a boiling pot of water at the foot of the chimney. The wolf falls into the pot and the pig places a lid on it, and boils the wolf for dinner.

Imagine the three little pigs as being three different companies. And imagine their houses as supply chains and the wolf as the swine flu. Building a strong supply chain is like building a brick home. When you stack brick upon brick it’s similar to having a plan A, B, C, D, etc. for when there are risks to your supply chain. The challenge is trying to identify those risks and developing plans to avoid or lessen them. Sometimes, the only way we are able to fully identify a risk is by facing a supply chain failure. Did your supply chain fail or face a disruption after the SARS outbreak or Hurricane Katrina? If so, did you adjust and plan for possible similar occurrences in the future? The difficulty is you are being asked to expect the unexpected and take into account all possible risks that could impact your supply chain.

At a time like this, you need to ask yourself, what would happen if my main supplier went bankrupt? Have I provided myself a cushion to withstand a supply disruption without serious repercussions? Am I able to allocate ample resources to create a risk mitigation strategy?

Take a look at the following series posted this past summer regarding risk management and all the factors that go into having a strong supply chain:

Are You A Gambler?
How Much Are You Betting and What are the Chances of Losing?
Gamblers Anonymous

This series discusses what your company should focus on when it experiences a major supply chain failure. It also directs you on how to begin to identify risks in your supply chain. The benefits that come with a risk mitigation strategy are also touched upon. These discussions dive deeper into what your company may be facing as the swine flu poses a severe threat. Hopefully, these posts will help you be prepared for the unexpected, even for when a wolf attempts to blow your house down.
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Kathleen Jordan

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