The Coronavirus Pandemic is delivering an unprecedented challenge to the economic, emergency response, crisis management, and healthcare capacity of the global community. Much has been written about safety measures to curb the spread of the outbreak. Many nations are deploying various response mechanisms, National Guard deployment, school closures and nationwide state of emergencies are being implemented, enforced, and normalized.

The impacts of the Coronavirus are socio-demographic, political, multi-industry, and economic in nature. According to Johns Hopkins University, the total number of confirmed cases of the Coronavirus worldwide has topped 530,000 while the death toll has surpassed 24,000 as of 3/27/2020.

Table 1: Distribution of the Coronavirus COVID-19 CSSE on 3/27/2020 at 3:03AM-EST

Distribution of the Coronavirus COVID-19

Source: John Hopkins University, as of 3/27/2020. NLPA Office of Research, 2020.

Table 2: Distribution of the Coronavirus COVID-19 CSSE on 3/27/2020 at 3:03AM-EST

Distribution of the Coronavirus COVID-19

Source: John Hopkins University, as of 3/27/2020

The Fed has signaled that are fiscal disruption have been detected. Within 30 minutes the S&P lost 30% of its value on one occasion. Markets in Europe are heavily impacted with shares tumbling by 17% in Italy, 12% in Germany, and 14% in Spain.

Source: The Guardian: https://www.theguardian.com/business/2020/mar/12/us-and-european-markets-plunge-further-after-trump-travel-ban

Table 3: Financial Indicators on 3/27/2020

Financial Indicators - Market Report

 

NLPA has designed the S.F.I.A.R(T)Model to plan, cope, and respond to supply disruptions caused by crises like the dreaded SARS, Coronavirus, and others.

Definition of the NLPA’s SFIAR(T) Model:

SFIAR™ stands for: Supply Failure Impact Analysis and Response. The (T) in the model stands for the trends that are ongoing amongst the Disruption Categories. The model is based on Scenario Planning, Risk Management, and Response Optimization.

SFIAR™ is a powerful methodology for procurement leaders to think through, understand, and prioritize sustainable strategic responses to issues that negatively impact their Supply Mechanisms.

SFIAR™ is underpinned by a problem’s Supply Risk Priority Number (S-RPN).

  • S-RPN is an indexed calculation which signifies the degree of risk and negative impact, organizations, stakeholders, and customer will face.

The formula for S-RPN is:

S- RPN =S x O x D or Severity(of failure) x Occurrence(of failure) x Detection(of failure) on a scale of 1 to 10

Benefits of leveraging the SFIAR(T) Model:

  1. It provides a platform for continuous improvement
  2. It facilitates the realization of risk mitigation, a core component of the Procurement Function Mandate
  3. It facilitates a strategic and systematic prioritization of organizational and supply risks
  4. It can be leveraged at the process, product, strategic, tactical and operational levels
  5. It facilitates thinking things through and examining unintended consequences
  6. It facilitates the prioritization of resources for Strategic Risk Mitigation (SRM)
  7. It enables the study of Impact Trends and facilitates the leverage of Scenario Planning
  8. It facilitates the deployment of response solutions that mitigate supply risk at the root cause level

Table 4 : NLPA’s S.F.I.A.R(T) Model™ – Section A

NLPA’s S.F.I.A.R(T) Model

Table 5 : NLPA’s S.F.I.A.R(T) Model™ – Section B

NLPA’s S.F.I.A.R(T) Model

Note: Use the  S.F.I.A.R.(T)  Model in conjunction with other Frameworks like:

Process of the S.F.I.A.R.(T) Model:

Step 1: Identify the Supply Disruption Type

Step 2: Document the Failure Mode

Step 3: Identify and document all Failure Impacts on the organization, stakeholders, and customers

Step 4: Rate the Severity of Supply Disruptions on a scale of 1 to 10

Step 5: Rate your ability to Detect Supply Disruptions on a scale of 1 to 10

Step 6: Rate the Occurrence of Supply Disruptions on a scale of 1 to 10

Step 7: Determine the Root Causes of documented supply disruptions

Step 8: Plan and Execute Response Solutions | Assign responsibility for Response Plan Management

Step 9: Continuously Track Trends related to Supply Disruption Types

Step 10: Share Supply Disruption Type Trend information on a regularly scheduled basis

Step 11: Conduct regular Mock Response Plan Execution events to determine the organization’s ability to respond Supply Disruptions

Step 12: Hold everyone accountable

Related NLPA Articles:

Vendor Risk Management
https://www.nextlevelpurchasing.com/blog/vendor-risk-management.html

The Ripple Effects of the Coronavirus on the Global Supply Chain
https://www.nextlevelpurchasing.com/news/purchasing-articles/effects-coronavirus-global-supply-chain

Steps to Prevent COVID-19

  1. Wash hands often with soap and water for a minimum of 20 seconds
  2. Keep a distance between others and yourself
  3. Avoid close contact with a person who are sick
  4. Stay home if you feel sick
  5. Cover sneezes and coughs with a tissue, dispose of used tissue and wash hands
  6. Wear a mask only if you are ill or taking care of sick persons

Source: https://www.youtube.com/watch?v=9Ay4u7OYOhA&feature=emb_rel_end

NLPA Library: Looking for authoritative procurement templates, tools, webinars, and more?  Stop trying to create resources from scratch and start taking advantage of having exactly what you need right at your fingertips in the NLPA Library.

 

 

 

 

 

 

 

 

 

 

David Millington

David Millington M.Sc.QSM, NPDP, CL6σBB, SPP, SPSM3®, CM® Director of Education (Next Level Purchasing Association) A Certified Strategic Planning Professional, David Millington brings over 18+ years experience in the Strategy Execution, Product / Service Development, Organizational and Supply Chain Excellence Arenas. He is a Certified Supply Chain Professional, Certified New Product Development Professional, Certified Strategic Planning Professional, and a Certified Lean Six Sigma Black Belt. David holds a master’s degree in Quality Systems Management, from The National Graduate School of Quality Management, Falmouth MA, USA. This equips him with mastery of vast bodies of knowledge and best practices. David Millington brings hands-on experience at VP, Director, and Manager Levels, guiding and facilitating the development of strategic and tactical solutions to intricate organizational, product, and service challenges.

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