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pandemic influenza

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pandemic influenza Powered By Docstoc
					Preparing for
pandemic influenza
Impacts on corporations and infrastructure
Introduction
PA Consulting Group has conducted over 150 business continuity, disaster recovery
and risk assessment assignments globally, across a spectrum of industry sectors
including pharmaceuticals, energy, financial services, transportation/logistics,
government, and telecommunications.


PA Consulting Group believes that preparations for a possible avian flu pandemic
are not advancing as effectively as they could be. Furthermore, we believe that
these preparations will have implications beyond the pandemic itself for improving
public and private sector processes, communication, and coordination.


Mitigation strategy and plans must be ‘fit for purpose.’ Analysis of the cost
of interruptions versus the cost of mitigation strategy/plans will drive the level of
investment, and this investment must be targeted at achieving the greatest level
of mitigation. While plans must be robust and well defined, it is as essential that they
are simple, elegant (by way of providing innovative solutions to complex problems),
and actionable.
    Background                                                                       – Infectivity? Lethality?
                                                                                     – Non-symptom Incubation period.
    Effects of a possible pandemic on a business
    The threat of an avian flu pandemic continues
                                                                                     Why are some worried about lethal
    to increase, with more cases, in more countries,
                                                                                     mutation and others not?
    with more mutations bringing human-to-human
    transmission closer. As of June 6, 2006, according                               • RNA virus with 8 segmented genes enables
    to the World Health Organization , 225 confirmed                                   high mutation rate

    human cases of avian flu (H5N1) and 128 deaths                                   • Peak quantities of virus =104 to 107/ml per entity
    have occurred in ten countries (Vietnam, Indonesia,                                in more creatures in more places means more chances
                                                                                       for mutation
    Thailand, China, Egypt, Cambodia, Turkey, Iraq,
    Azerbaijan, and Djibouti). The CDC has noted that                                • Long-lived virus in bird feces (6-35 days depending on
                                                                                       temperature further adds more chances for mutation
    most of these cases have occurred as a result of
    people having direct or close contact with infected                              • Mutations drive receptor-binding preferences that affect
                                                                                       transmissibility and lethality
    poultry or contaminated surfaces. The problem
                                                                                       – Further adds to the complexity associated
    is that influenza viruses have the ability to mutate,
                                                                                         with mutations.
    and person-to-person transmission could become
    possible, leading to worldwide outbreak of disease
    (pandemic) because of the absence of human
                                                                                     Technology uncertainty
    immune protection to H5N1 viruses. This scenario,
    combined with notable shortfalls in treatment and                                • How effective will anti virals be? Vaccines?
    vaccination options, create a threat that we have                                • Other preventive and protective technologies under
    not encountered for many decades. There are                                        ‘perfect use’ conditions? In actual use?
    a number of factors that add notable complexity
    to business continuity planning under potential                                  What is available and how effective
    pandemic conditions.                                                             will it be? What can businesses rely on?
                                                                                     • Careful hygiene and respiratory protection practices will
    Uncertainty with respect to disease characteristics,
                                                                                       help, but are by no means infallible
    technology effectiveness, and institutional/government
                                                                                     • Anti-viral and other flu medications may help alleviate
    responses will influence how a pandemic plays out.
                                                                                       symptoms but there can’t be a vaccine until there is a
    The range of possible scenarios is broad as indicated                              human-to-human transmissible virus given current vaccine
    by some of the uncertainties outlined below.                                       development technologies

                                                                                     • Surge use will swamp conventionally engineered
                                                                                       communications infrastructure, making it significantly
    Uncertainty factors
                                                                                       less reliable
    Disease uncertainty                                                              • There are no viable technological solutions at this point
    • How will avian flu mutate? When?                                                 at adequate supply levels.

    • What will the disease characteristics be:




    http://www.who.int/csr/disease/avian_influenza/country/cases_table_2006_06_06/en/index.html

2
Government effectiveness                                                                What we know from pandemic
• Global/National coordination – how will countries/                                    simulation analysis
 localities work together?                                                              Avian flu simulation analysis quantifies important points:
• Quality of strategy – Does it target the right things?                                • Early action to limit contact rates is the best way to reduce
 Is it realistic?                                                                         direct impact on numbers infected and deaths

• Preparation status – Is government ready to                                           • The window of opportunity is narrow- aggressive action
                                                                                          is required
 execute the plan? At all levels?
                                                                                        • People must know what is expected of them if quarantine
• Ability to implement- Will governments act                                              is to be feasible- clear communication and transparent
 definitively? Are plans actionable in real time?                                         planning is required

                                                                                        • Definitive action is needed to alter pandemic outcomes.
                                                                                          Quarantine will not eliminate outbreaks, but it is the
                                                                                          best way to reduce impact and buy time. Government
                                                                                          capability to implement quarantines is currently limited in
                                                                                          most regions.




What does this uncertainty, range of scenarios,
and limited institutional capacity mean for your organization?
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                                                                                                                                                          3
A few of the common themes, challenges and actions

    Who can we rely on?                                                 Will the supply chain function?

    • Law enforcement likely overwhelmed with calls for service         • “If our folks get in but supplies can’t come through,
                                                                          then what do we do?”
    • Health system likely swamped and rationed
                                                                        • Can we get on our suppliers’ hit list for critical services?
    • Can we tap faith-based or volunteer organizations?
                                                                        • Just-in-time is exactly the opposite of what’s needed
                                                                          during a pandemic. (“Walmart has one week of food in
                                                                          supply chain…”)


    How will people know what to do?                                    Will social distancing measures work?

    • Some are running communications exercises so the right            • Ability to work from home – will the internet and business
      people will talk to each other                                      systems hold up under strain?
    • Some are focusing on getting preventative information             • Will people stock 30 days of food and water in their homes?
      and communications to staff and families                            If not, how will we get it to them?
    • Some are developing internet/intranet pages with                  • Will people follow directions?
      key information.


                                                                                  We’re thinking about
                                                                                 having only 10% of our
                                                                                  workforce available




                         We haven’t                                    PANDEMIC                  We’re using a
                       identified any of
                       these things yet                                  RISK                   model that applies
                                                                                                   to strikes




                                  We’ve done quite a bit including
                                 stockpiling of key supplies such as
                                     masks, hand sanitizers...


    As part of PA’s efforts with the SafeAmerica                        The responses were varied with different companies
    (www.safeamerica.org) “Prepared, Not Scared                         focusing on different aspects of the enormous challenge.
    Initiative”, we analyzed the activities of participant              The parable of the blind men and the elephant is
    companies in the greater Atlanta community.                         applicable in that it highlights the ‘real’ but ‘incomplete’
                                                                        efforts that companies have undertaken so far to
                                                                        address the threat of an avian flu pandemic.


4
A model of one of the largest and oldest underground transit
systems helps illustrate what could be done



                                                                Market                                                                    Train Drivers
                                                                                                                                            Station Staff
                                                                                                                                                Operations Support Staff
                                                            Taxis and Other
                                                                Private Car
                                                                                                                                                    Corporate/Administrative Staff
                                                                                                                                                        Maintenance Technicians           Employees
                               Customer
                               Customer                              Train Operating Companies
                                                                                                                   Capacity,                                 Project Management Staff
                                                                      Bus
                               Perception                                 LUL                                      Quality of
                                                                                                                                                                Capital Program Technicians
                                                                                                                                                                  Professional Engineers
                                                                              Market
                                                                              Market                                Service                                          LUL’s
                                                                                                                                                                     LULís Workforce
                                     Economy
                                     Economy                                   Total Transport market
                                                                              Total Transport market
                                                                                                                                                                    Experience
                                                                               Relative journey time
                                                                              Relative journey time
                                                                                                                                                                    Productivity
                                                                              Relative fare cost
                                                                              Relative fare cost
                                                                              Perceived safety/ ambience
                                                                              Perceived safety/ambience
                                                                                                                    Required                                        Morale

                                                   Social                                  connectivity
                                                                              Intermodal connectivity               Workforce                                       Cost
                                                                                                                                                                    Budget limitations
                                                                              Ease of use

                         Government
                                                   Benefit
        Govt             DETR
                         GLA/LTA
                         GLA/LTA
                                                        Other                                                       Assets
                                                                                                                                                                                               Required
                                                                                                                                                                                                Skills
                         Treasury
                         Treasury
                                                       Revenue                                                      Needed                     Required
                         HSE/HMRI
                         HSE/HMRI
                                                                                      Capacity,                                                Workforce                     Required
                                                                              Revenue Quality of
                                                                                                                                                                             Workforce
                                     Fares                                             Service                    Other
                                                                                                                    Civils
                                              Finances                                                                  Track                                                                     Suppliers
                                Grant         Revenues                                                                     Stations                                                               PFI


                                                                                                                               Assets
                                                                                                                              Assets
                           Private            Grants                                                                          Power
                                                                                                                                                                                                  Simple outsource
                           Sources            Operating costs
                                                                                                                                  Lifts & Escalators
                                                                                                                                                                                                  Implementors
                                              Capital spend                                                                                                                                         of capital spend
                                              Dividends                                 Budget                                        Communications                                               Budget limitations
                                                                                                                                        Signalling
                                                                                                                                             Rolling stock



                                     Finances                                                      Maintenance
                                                                                                                                 Capital LULís Capital Assets
                                                                                                                                         LUL’s
                                                                                                                                 Spend Amount
                                                                                                                                        Condition
                                                                                                                                                                                        Suppliers
                                                                                                                                              Age
                                                                                                              Capital                          Maintenance needs/cost

                                                                                  Cost                        Spend                            Replacement needs/cost
                                                                                                                                              Budget limitations




The model simulates the operating environment, key stakeholders
and their interactions

                                                                                                                                                                            Workforce
                                                 Planned
             Market                              Service                                                     Prevailing                                      Natural
                                                  Level                                                     Wages/Labour
                                                                                                                                            Hires            Wastage
                                                      Accident/                                               Practices
                                            Non-LUL Threat                                                                                  Redund-
                       Comparable                                                                                                            ancies
                        Services           Accidents Incidence
                                      Safety                                                             Desired LUL
                       Benchmarks                                                                        Employees                      LUL
                                    Standards                                                                              Wages/
                   Employment
                                                    Ease of                                                    Fraction of Labour Employees
                      Level in            Perceived Use Network                                                  Desired Practices
                                            Safety        Seamlessness                                            Staff
             Tourists London Intermodal                                                                         Available Lost
                               Seamlessness      Relative     Journey                             Delivered
                                                                                                 Trains/Hour               Time Morale
                Greater                      Attractiveness     Time                                                                        In-House
                                 LUL
                London                                                                                                                    Experience/
               Transport     Marketshare                                                                 Headway
                                                                                                        Consistency          Staff       Competence
              Need                           Social Ambience                                                            Performance
        Economy          LUL                                                                         Available                                    Calibre
                                             Benefit
                       Ridership                                                                      Capacity
                                                                                                                      Facility
                                               Utilization/
                                                                                                                    Availability                                                                                Suppliers
                     Passenger                 Crowding    Cost Per                         Age/ Capacity
                      Revenue                                Train                       Technology           Condition
                                     Fare Level/                                                                                                                                                          Supplier
                                      Structure  Operating Kilometer                                                               Productivity
                                                  Costs                                                                                                                                                  Competition
      Fare Policy/                                                                                                                    Maintenance
       Structure                                                                             Assets                                    Backlog
                                        Margin      Other
                                                   Revenue                                                 Maintenance                                                                          Relative
                                    LUL Budget Interest Cost                                                Required                                                                          Supplier Cost
     Integrated                                                                                                                                                         Use of                 Efficiency
     Transport Government                                            Interest                                                                                          Suppliers
       Policy       Grant
                                                 Finance              Rates
                                                                                             Maintenance                 Assets                                                                                         Average
                          Private                                                             Spending                                                                                                                  Contract
                          Sources                      Investment                                                                                                                                                         Size/
                                 Contractual                                                      Performance
                                   Efficiency                                                                                                                                                                            Lifetimes
                                                                                                  Improvement                                                             Supplier
               Stability of                                                                        Investment                                                            Experience/
                 Grant                                                                                                                                                   Competence               Supplier
                                  Investment                                                                                                                                                       ”Flux”
        Government                 Efficiency
            Policy


                                                                                                                                                                                                                                    5
    In this simulation of a severe                                                                                                                    Effects continue for years as assets are
    pandemic scenario, ridership drops,                                                                                                               older, more difficult to maintain, and less
    staff shortages and supplier-related                                                                                                              reliable due to the maintenance backlog
    shortfalls combine to create serious                                                                                                                                                  Assets Within and Beyond Economic Life
    operating challenges                                                                                                                                        1,500




                                                                   Total Passenger Kilometres
                                   9                                                                                                                            1,000
                                                                                                                                                                                  within useful life                                 the financial crunch and




                                                                                                                                                    Assets
                                                                                                                                                                                                                                     delays in the supply chain
                                   8
                                                                                                                                                                                                                                     mean use of more assets
                                                                                                                                                                     500
                                                                                                                                                                                                                                     beyond their useful life
               Billions PKm/year




                                   7


                                                                                                                                                                                  beyond useful life
                                   6

                                                                                                                                                                      0
                                                                                                                                                                           2007                  2009                    2011                    2013                 2015
                                   5
                                                                                           Post-pandemic ridership                                                                total assets within normal book life               total assets within normal book life
                                                                                           fails to recover…                                                                      for ROL & BCV (pre-outbreak base)                  for ROL & BCV
                                   4                                                                                                                                                                                                 (Lower ridership + Staff hits + Supplier hits)
                                        2007                 2009                2011                 2013                   2015
                                                                                                                                                                                  total assets beyond useful economic                total assets beyond useful economic
                                                                                                                                                                                  life for ROL & BCV (pre-outbreak base)             life for ROL & BCV
                                               Pre-outbreak base            Lower ridership + Staff hits + Supplier hits
                                                                                                                                                                                                                                     (Lower ridership + Staff hits + Supplier hits)


                                                                                                                                                                                                           Average Asset Age
                                                                                                                                                                      22
                                                                      Total Train Kilometres
                                   80

                                                                                                                                                                      21
                                                                                                                                                      Years of age




                                                                                                                                                                      20
                                   60
           Millions TKm/Year




                                                                                                                                                                                                                                      average age creeps up
                                                                                                                                                                      19



                                   40
                                                                                                                                                                      18


                                                                                         …partially as a consequence
                                                                                                                                                                      17
                                                                                         of lasting weak service                                                           2007                   2009                    2011                    2013                  2015
                                   20
                                        2007                 2009                2011                  2013                  2015
                                                                                                                                                                                  average asset age ROL                         average asset age ROL
                                               Pre-outbreak base            Lower ridership + Staff hits + Supplier hits                                                          (pre-outbreak base)                           (Lower ridership + Staff hits + Supplier hits)



                                                                        Gross Operating Margin                                                                                                    Actual Maintenance Performed
                        600                                                                                                                                     8,000




                        400
                                                                                                                                      Maintenance units/year




                                                                                                                                                                7,000
    Millions GBP/Year




                        200




                                   0
                                                                                                                                                                6,000


                    -200
                                                                                                                                                                                                           staff shortages, both Underground and
                                                                                         how would they survive this                                                                                       supplier mean that much maintenance
                                                                                         degree of operating deficit?                                                                                       is deferred and it takes time to catch up
                    -400                                                                                                                                        5,000
                                        2007                 2009                2011                  2013                  2015                                          2007                  2009                    2011                   2013                  2015


                                               gross operating margin       gross operating margin                                                                                actual maintenance performed ROL                 actual maintenance performed ROL
                                               (pre-outbreak base)          (Lower ridership + Staff hits + Supplier hits)                                                        (pre-outbreak base)                              (Lower ridership + Staff hits + Supplier hits)


                                                                                                                                                                                                              Asset Condition
                                                                        Total Capital Expenditure                                                                    1.0
                    800
                                                                                                                                       Maintenance units/year




                    600                                                                                                                                              0.8
Millions GBP/Year




                    400

                                                                                                                                                                     0.6

                                                                                                                                                                                                                                 poor asset condition
                    200
                                                                                                                                                                                                                                 compromises service reliability
                                                                                                 the cash crunch delays
                                                                                                 planned capital works                                               0.4
                                   0                                                                                                                                       2007                   2009                    2011                     2013                  2015
                                        2007                 2009                 2011                  2013                   2015

                                                                                                                                                                                   asset condition ROL                               asset condition ROL
                                               pre-outbreak base             Lower ridership + Staff hits + Supplier hits                                                          (pre-outbreak base)                               (Lower ridership + Staff hits + Supplier hits)
6
  We now have the ‘big picture’ that enables us to identify
  high leverage actions

  Probalisitc analysis
                                 Scenarios: What might happen to us?
120,000,000
                                          earnings under 20 different scenarios
100,000,000



         80,000,000                                                                                                                   Understand the full range of potential consequences
                                                                                                                                      under a wide range of plausible scenarios
         60,000,000
                                                                                                                                      (biology, technology, institutional…)
         40,000,000
                                                                                     the simulation model
         20,000,000
                                                                                     allows us to quantify
                                                                                     the possible outcomes
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  Sensitivity/leverage analysis
                                       Monte Carlo Probability Distribution of Operating Loss                                         Identify which aspects of scenarios, singly and
               30%

                                                                                                                                      in combination, generate worst case conditions.
               25%

                                                                                                                                      Use information to
               20%

                                                                                                                                      • find the key bold actions you can take that make
Probabilitty




               15%

                                                                                                                                       a difference & incorporate into plans
               10%

                                                                                                                                      • identify leading indicators (‘trigger points’/’sign posts’)
               5%

                                                                                                                                      • monitor key factors to know which scenario
                     200   225   250     275    300   325   350    375     400    425    450
                                                            cumulative operating loss (5-years)
                                                                                                  475   500   525   550   575   600
                                                                                                                                       is playing out and adjust response accordingly.
                           Mitigated            Unmitigated




  Recovery options analysis
  lever 1
  lever 2                                      Share Points or $billions
  lever 3
                                                                                                                                      Use knowledge of actual disease conditions and
  lever 4
  lever 5                                                                                                                             institutional response to establish ‘baseline’ recovery
  lever 6                                                                                                                             scenario. Find and concentrate on the top three or
  lever 7
  lever 8
                                                                                                                                      four things that reduce recovery time and other factors
  lever 9                                                                                                                             of interest.
  lever 10
  lever 11
  lever n




                 . . . What supplier relationships are                                                                                . . . What sort of actions will be effective during a
                 needed in order to evaluate programs                                                                                 pandemic given what can be expected from others
                 that facilitate pandemic threat planning?                                                                            who may have not have adeuately planned?
                                                                                                                                                                                                      7
Our offering
Simulation tool-based planning to enable flexible
and real-time use to address uncertainty and
changing conditions.
                                                                                   Best
                                                                              available data                                                       Planning
                                                                                                                                                 “What range
 Quantitative                                                 Experience/                                                                       of things must
analysis/other                                                                                                                               I be prepared for?
                                                               first-hand                                                                                                     Recovery
   models                                                     knowledge                                                    Outbreak              What are the               “How can we
                                                                                                                      “Which scenario             key actions             get back on track
  Qualitative                                                 Awareness of                                             is playing out?”       I can/must take?”            most rapidly?”
 assessments                                                  less tangible
 Quantitative analyses/           Experience/                    factors
    Other models            First-hand knowledge

                    Qualitiative          Awareness of less
                   assessments             tangible factors                                                                            Scenarios: What might happen to us?
                                                                                                                         120,000,000
                                                                                                                                          earnings under 20 different scenarios
                                                                                                                         100,000,000




                                                                                  Strategies: What can we do?
                                                                                                                          80,000,000



                               tion m
                            ula
                                                                                                                          60,000,000
                                     od
                      sim




                                                                                                                          40,000,000
                                       el




                                                                                                                                                                 the simulation model
                                                                                                                          20,000,000
                                                                                                                                                                 allows us to quantify
                                                                                                                                                                 the possible outcomes



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                                                                                                                                                        Results

Implications                                                                                                    • Such planning is relevant beyond an avian flu
• Planning that more fully addresses uncertainty                                                                 pandemic and could be applied to a range of
 prior to and during an event enables better                                                                     business continuity and other strategic situations.
 decision-making that could notably decrease
 human economic tolls

• Bold action becomes feasible because sufficient
 planning has enabled deployment of resources
 in advance


Corporate headquarters                                                                                          United States headquarters
123 Buckingham Palace Road                                                                                      4601 N Fairfax Drive
London SW1W 9SR                                                                                                 Suite 600
United Kingdom                                                                                                  Arlington, VA 22203
Tel:    +44 20 7730 9000                                                                                        Tel:       +1 571 227 9000
Fax:    +44 20 7333 5050                                                                                        Fax:       +1 571 227 9001
E-mail: info@paconsulting.com                                                                                   Contact: Sarah Bergin
                                                                                                                Tel:       +1 571 227 9824
                                                                                                                E-mail: sarah.bergin@paconsulting.com


www.paconsulting.com
PA Consulting Group is a leading management, systems and technology consulting firm,operating worldwide in more than 35 countries.

Principal national offices in
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