HMA News

March 26, 2020

JUST WHEN YOU THOUGHT MANUFACTURING WAS HARD…

…along comes the COVID-19 virus.  At HMA, we have defined our purpose as to “inspire vibrant and enduring manufacturing in the Hunter” and so in keeping with this goal, as directors of HMA, we will be sharing information monthly to assist in this regard.  So, the COVID-19 virus provides a great place to start this series because to endure you need to survive and that is what we are going to place our focus upon in this opinion piece.

Manufacturing in the Hunter is diverse, and so what follows is not a prescriptive “How to” model that will fit every business, but rather a framework or guide.  Ultimately each manufacturing business leader will need to make the right decisions for their business weighing up the interests of ‘what is best for my people and what is best for my business’ and the first thing we must all recognise is that the tipping point for these decisions will change as this pandemic rolls through our communities. What might have been the right decision last week may no longer be the case and preparing our workforces for regular change and communicating the reasoning will be critical for success.

To borrow the acronym from a great Australian business, the guideline for fortifying the people on your manufacturing site should be based upon S.P.C.: Separating, Protecting and ContainingSeparating key people and processes to improve redundancy and reducing the spread of the virus if it impacts one of your people, Protecting your people through good hygiene practices and developing the processes and systems beforehand to Contain the virus if it enter your business.

The work of Separation is mirroring the activity happening in the general community within your workplace and it has the dual purpose of making it less likely that one of your employees will contract COVID-19 and reducing the impact if it does happen.  In many respects most of these suggestions are a complete antithesis of what we have tried to do before where communication, collaboration and teamwork were our pillars. However we are not in normal times.  Measures could include:

  • having certain people work for home
  • implementing social distancing, minimum distances, no hand shaking
  • limiting travel between sites
  • changing start times and break times of certain groups to limit interaction in common areas
  • splitting teams into a “Blue” team and a “Green” team where possible
  • using technology to avoid face to face meetings
  • splitting critical team resources so that they work in different physical locations – if you have two IT people do you want them sharing an office?
  • limit and then screen visitors for risk factors or ban them entirely from visiting your site
  • avoid service providers visiting all areas of your facility

Now many of these measures will be more applicable to large sites with many employees but some can be adapted for all sizes of workplace.

Protecting your workforce again is not rocket science and good hygiene should already be in place in your workplace but we all remember the time we caught the flu or a cold off a work colleague who wouldn’t go home sick, right?   With COVID-19 cases being contagious before symptoms are evident this means taking hygiene standards to a new level.  Sites should be particularly vigilant where there are rotating work crews using common equipment, multi-tasking of employees and other flexible work arrangements. Consideration should go to:

  • having people operate consoles, keyboards, equipment controls with gloves and/or disinfecting these areas as people changeover
  • increased cleaning of changerooms, lunch / break rooms, kitchens
  • regular temperature checks for employees
  • put water bubblers out of service
  • clear policies about reporting illness and staying at home if you are ill
  • regular washing of hands and use of hand sanitizer (if you can get it)`

Another consideration is clarifying for the workforce the remuneration impact for people who are ill due to COVID-19 or are requested to self-isolate because of COVID-19, especially casuals and contractors.  If there is a financial penalty (i.e. no income) for people who would have to self-isolate this will be a disincentive for people to declare their illness and isolate themselves.

Containment is all about once an employee, contractor or visitor is found to be a confirmed case, how quickly and effectively can you identify other people who were in close contact with that person in your organisation and effectively remove them before the virus spreads.  Considerations should include:

  • if the person reports that they are positive at work, where will you take them, who will talk to them, what questions will you ask them. Hopefully the Health Department will lead this process but what if the number of cases exceeds their capability to respond in coming weeks?
  • do you have the emergency and out of hours contact details for all your employees if you need to contact them at home?
  • how will you know who they have been in close contact with (the contact trace)?
  • have you got contingency plans if you lose some key people for a period of a few weeks – are there people in other roles with the necessary skills to fill the gaps?

Depending upon when you read this document, you might be sitting there thinking “job done”, we have all these things in place, we have told everyone what they should do.  But the question then arises are people doing these things, or has the initial wave of enthusiasm waned and people are now getting complacent?  Random checks and audits will be necessary to ensure compliance and maintain good practices particularly when they are time consuming or difficult.  Reinforcing the positive benefits (hopefully!) of the new controls will be critical to keep people on-board.  Similarly testing the processes for contact trace would be a useful exercise and can be done simply by picking a person at random and testing how quickly and efficiently your team can determine their close contacts, as if they tested positive.

Once you have the basics of SPC in place, there are other key measures that each business should undertake to ensure the enduring survival of your business.  Traditional business models will be challenged. Supply chains that have worked effectively for years may become broken.  Access to some critical services may become restricted, or worse, no longer available for the immediate future.  In each of these events, a strong Business Continuity Plan (BCP) is essential to help reduce the impact of risks, material to your business.  The objective of any high quality BCP is to prepare your business for any disruption, and to restore operations to the fullest extent possible with minimum downtime.  The BCP identifies vulnerabilities in critical processes, recommends necessary measures and formalises workarounds to minimise impact and to ensure the continuity of those business processes.

Many businesses will already have a BCP in place.  For those businesses, it is essential now to review your BCP in terms of any changes you see to material risk factors.  For those businesses yet to do a BCP, there are a few key activities that you should be undertaking straight away:

  • Undertake a Business Impact Assessment (BIA). The BIA identifies essential processes and activities required for your business to continue to deliver its products and services. A good BIA features the following elements:
    • For each unit process in your operation, classify the inputs into the following categories:
      • Raw Materials, Semi-finished Products, Labour and Utilities
      • Enabling Technology
      • Premises and Equipment
      • QA Processes
      • Incoming and Outgoing Logistics
    • Identify and describe the activity, including what the desired output of the activity is
    • Assign an accountable member from your team to undertake the BIA
    • Assess the business impact without mitigation
      • Describe the impact of this disruption to your business. Is it material in size or is it an impact that can be tolerated?
      • Assess how long until a loss of this activity would have the assessed impact
    • Assess the business impact with mitigation
      • Identify any possible workarounds that you might have to minimise the impact of the business disruption
      • Compare the cost of the workaround versus the cost of the impact and decide if the workaround makes business sense. As an example, the cost of hiring a backup generator for a few days may be relatively small compared to your loss of profit should electricity fail for the same period.
      • Develop a plan to implement the workaround, including assigning actions and completion dates.
    • Once the BIA is complete, this provides all the key inputs for your BCP. For each key business activity, the following information should be captured for a good quality BCP:
      • List workaround supplier name, location and contact details
      • Estimate your Recovery Time Object (RTO). The RTO is the length of time before the loss of the critical process has a material impact on your business
      • Determine required inventories that should be (or can be) maintained to help meet the RTO whilst the workaround is being implemented.

A few things that you should think about in preparing your BCP, especially in the case of a wide scale disruption threat as in the case of COVID-19:

  • Ensure your BCP considers critical roles in your organisation. Have a plan for who can step into critical roles if you lose several key personnel. What training can you provide now for other team members who might be asked upon to step up if COVID-19 takes your key employees out of action for an extended period?
  • Have a hard copy of your BCP readily available. IT systems, enabling technologies and utilities are all potentially vulnerable under worse case COVID-19 impact scenarios.

Now at this point you might be tempted to throw your hands up and just give up but that would be to forget the famous saying of Friedrich Nietzsche, that “whatever does not kill you makes you stronger” and so neglects the potential opportunities or positives that could come out of this situation.  Points to consider are:

  • How does this situation either accelerate or hinder our strategy or business approach? (create greater flexibility in the work teams, reduce unhelpful attitudes or approaches, force change in supply chains or in channels to market)
  • Does this situation open up new markets (potentially other businesses or countries may not respond effectively to COVID-19 and leave gaps in the market, does supply chain robustness become a more valuable part of the Value Proposition to many customers?)
  • Can we develop new capabilities? (does it build our online presence, free up opportunities to develop other employees, improves operational discipline and rigour)

 

COVID-19 brings a massive challenge for our workplaces, communities and the countries of this world but manufacturers are resilient and will survive through identifying the risks, implementing controls and adapting, pretty much what we have always done.

 

About the Author:

Stephen Elliott is the Deputy Chairman of HMA and the NSW Operations Manager for InfraBuild Steel and has responsibility for over 500 employees and contractors in Sydney and Newcastle, NSW. Stephen has spent most of his career on the front-line, managing manufacturing operations, however, was also the former global head of safety for Arrium an international steel and mining company.  The opinions and framework outlined in this article reflect the current thinking being applied within InfraBuild Steel, however every business is different and the situation is highly dynamic so the comments and framework in this document should not be considered the definitive advice for dealing with this situation and I welcome the comments and advice of others as we meet this challenge together.  Stephen also acknowledges the valuable assistance of Dr Rodney Williams (Orica) for his contribution particularly related to BCP development.

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