Supply Chains Need Risk Management Modern disasters take many different forms. They may not necessarily be forces of nature or spectacular fires, though such events certainly qualify. If the U.S" /> Supply Chains Need Risk Management Modern disasters take many different forms. They may not necessarily be forces of nature or spectacular fires, though such events certainly qualify. If the U.S" />

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Supply Chains Need Risk Management

February 11, 2013

paragraphHeader"> Supply Chains Need Risk Management
Modern disasters take many different forms. They may not necessarily be forces of nature or spectacular fires, though such events certainly qualify. If the U.S. Securities and Exchange Commission accuses your company’s CEO of insider stock trading, that is as much a crisis or disaster as an earthquake, tornado or tidal wave. Maybe you received a subpoena from the U.S. Department of Justice about billing policies or overseas sales practices. Maybe the U.S. Food and Drug Administration issues a “black box” warning about your device. Maybe a television news program airs a sensationalistic expose about your device and its alleged hazards. Perhaps the company’s product has been maligned as defective in a class action lawsuit.

Disasters assume many shapes. A disaster recovery plan can be useless unless key vendors, suppliers or contractors your organization depends upon are informed about your recovery plans. Manage contingent business interruption risks by strengthening your supply chain. For starters, medical device firms preparing for a rebound should know their supply chain.

Here are some tactics:
  • Identify in advance all your key suppliers to your production facilities in your supply chain;
  • Identify the raw materials, utilities and components on which your production facilities depend;
  • Identify the locations of your suppliers’ suppliers; and
  • Make advance arrangements with contingency suppliers.
According to Alan Weiss, Ph.D., a corporate productivity and performance consultant, “Most companies think they have a Plan B for a key person leaving, a key customer defecting, a power outage, bad publicity, and so on. But it’s usually dusty, rusty and musty.” He concludes that companies need to review and test their Plan Bs.

For the device firm’s management and executive team, a disaster is the equivalent of a pro athlete’s game day. This is what they are paid for. Here they are on center stage, in the spotlight. The pros who win on game day are the ones who not only have the will to win, but the will to prepare in the months before the test.

So it is with risk management. For medical device companies, what determines a disaster recovery plan’s success will not just be efforts during a disaster and its aftermath, but the weeks and months before the event. How well did the device firm’s management team use this opportunity to get ready?

The time to fix your roof is when the sun is shining. Medical device executives need not become doomsday preppers or fringe fanatics to protect their companies. Smart medical device management teams will use “calm” times wisely to prepare themselves and their organizations for the unthinkable.

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