Pharma Company’s Achilles’ Heel: CFO’s Claim Their Organizations Are Getting Better At Managing Risk . . But Are They Really?
The idea of crisis management in companies is as old as civilization – but the function is still immature in practice. While leading executives claim that they are managing their company’s crisis management successfully, there is no standard for Business Continuity (BC) often present in companies, which is symptomatic of a less-well established function.
Although training frequency goes hand-in-hand with response effectiveness, more than 60% of companies conduct emergency response training only once or twice a year – or not at all. To top it all off, less than a third of companies train monthly or even quarterly. As a result, many companies are trying to safeguard their supply chain and optimize crisis management capabilities in order to continuously meet quality standards and regulations.
Bio-Pharmaceutical and medical device leaders are re-evaluating their crisis management preparation and processes in light of recent major disasters that have disrupted supply chains and global manufacturing operations, according to analysts at research and consulting firm Best Practices, LLC.
Companies must be prepared for a crisis in any branch at any time. A classic example of crisis management can be seen in the Nokia and Ericsson crisis in 2000. A small fire contaminated millions of chips produced by the Dutch company Philips in their microchip plant in Albuquerque, New Mexico. The microchip plant was used by both Nokia and Ericsson, and the way that both companies handled the crisis impacted each company immensely. While Nokia pursued a more proactive approach to the situation, dealing with the fire and finding solutions for the shortage of chips immediately, Ericsson took a reactive approach and ultimately suffered for it. Learning how to effectively manage and prepare for a crisis, regardless of the type of industry you are involved in, is essential and can ultimately seal the fate of your company.
It is now, more than ever, crucial for executives to manage and adjust supply chain operations, sole-source suppliers, and examine future trends in contingency planning. Biopharmaceutical manufacturing leaders can apply this research to best reduce risk and enhance response time in the quickly changing healthcare industry.