Global supply risks

First Ebola, Now Zika – Disease Outbreaks Disrupt Global Businesses

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As most of Latin America, especially the summer Olympics host nation Brazil, grapples with the Zika virus outbreak, a number of businesses around the world are beginning to assess their risk exposures.

The explosive spread of the Zika virus has caught most global businesses and their suppliers by surprise. With WHO declaring the outbreak a global public health emergency, the travel industry is looking at mounting customer care problems with several airlines having announced refunds to travelers. While the airlines industry is largely impacted, there are growing concerns for a number of global organizations that rely heavily on the LATAM markets, like Citigroup (Brazil alone makes up 25% of its sales), Colgate Palmolive (30% of sales come from these impacted regions), as well as major electric and railroad companies in the US.

A number of Zika infected locations are considered favorable nearshore destinations for US-based global enterprises and also host delivery centers for a large number of major IT/ BPO service providers. In addition to heeding travel advisories, these businesses should also prioritize educating employees that work in these regions on recommended precautions, ensuring that their facilities are virus free, as well as preparing for HR issues related to employees seeking relocation or refusing to travel to these areas for business. Needless to say, employers are facing multiple challenges rising from this often-neglected risk factor.

While some organizations that were exposed during the Ebola crisis in 2014 revisited their business continuity plans and enhanced their risk monitoring to stay informed of similar potential outbreaks, most others were caught off-guard by Zika. In hindsight, better monitoring of health risks in their global locations could have helped better readiness and a timely execution of their BCP and crisis resolution initiatives. As there are growing concerns of the spread of the Zika virus to Asia-Pacific countries, Supply WisdomSM continues to constantly monitor local health alerts across the region and keep its customers abreast of the risks to their global offices and suppliers.

In addition to risk monitoring, organizations must also review their employee communication programs to effectively communicate valuable health information during such instances and formulate a crisis communication plan, review technology disaster recovery plans and emergency action plans. These activities must be accompanied by a Business Impact Analysis for global locations to evaluate exposure to such localized business impacts.

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