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Lessons from the West African Ebola Outbreak in Relation to New Zealand’S Supply Chain Resilience

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Lessons from the West African Ebola Outbreak in Relation to New Zealand’S Supply Chain Resilience Lessons From the West African Ebola Outbreak in Relation to New Zealand’s Supply Chain Resilience Authored by: Roger Dennis, Wendy McGuinness and Rick Boven Sponsored by: Z Energy Limited and Foodstuffs (NZ) Limited Lessons From the West African Ebola outbreak and implications for New Zealand’s supply chain. Our work has been sponsored by Z Energy Limited and Foodstuffs (NZ) Limited who have supported this initiative because they recognise the importance of ensuring New Zealand has resilient supply chains. The intended audience is the New Zealand business community, central government and local government. This report has also been informed by interviews with experts inside leading New Zealand companies that depend on supply chains for their business. In addition to the sponsors, these include Air New Zealand Limited, Fonterra Co-operative Group Limited, Skope Industries Limited and Vector Limited. Government officials were informed of the contents of this report. Please note the opinions contained in this report are solely those of the authors. Table of Contents Executive Summary ..................................................................................................... 1 1.0 Why Build a Resilient Supply Chain? ................................................................. 7 1.1 Setting the Context ................................................................................................. 7 1.2 The New Paradigm: A Whole-of-system Approach ................................................ 8 1.3 How to Build Resilience Into a System ................................................................. 10 1.4 Resilience Is Not a Goal but a Means to a Goal .................................................... 12 2.0 What Lessons Can Small Countries Learn From the West African Ebola Epidemic? ........................................................................ 13 2.1 Setting the Context ............................................................................................... 13 2.2 How It All Began ................................................................................................... 14 2.3 Where We Are at the Start of 2015 ...................................................................... 17 2.4 Lessons From the WHO Report on Ebola ............................................................. 18 2.5 The Risk of a Global Pandemic .............................................................................. 26 3.0 Looking From the Outside In: How Prepared Is New Zealand? ........................ 29 3.1 Setting the Context ............................................................................................... 29 3.2 A Resilient New Zealand? ..................................................................................... 30 3.3 Relevant Institutions ............................................................................................. 31 3.4 Relevant Instruments ........................................................................................... 35 3.5 Relevant Information Systems .............................................................................. 41 3.6 Observations ......................................................................................................... 41 4.0 How Do We Anticipate a Supply Chain Event? ................................................ 46 4.1 Setting the Context ............................................................................................... 46 4.2 Exploring Possible Events in Terms of Level-one, Level-two and Level-three Effects ........................................................................ 47 4.3 Using Scenarios to Understand Possible Effects Over Time ................................. 47 4.4 Exploring Second-level and Third-level Effects ..................................................... 48 5.0 How Do We Manage Supply Chain Risks ......................................................... 51 5.1 Setting the Context ............................................................................................... 51 5.2 New Zealand Example: Preparing for Event Risk – A Case Study From the Canterbury DHB .................................................................................... 53 5.3 Anticipating Supply Chain Risks in New Zealand Today ........................................ 53 5.4 Lessons Learned ................................................................................................... 56 6.0 Conclusions and Recommendations ................................................................ 57 6.1 Three Major Recommendations ........................................................................... 57 6.2 Recommendations for Central Government ........................................................ 59 6.3 Recommendations for Local Government ............................................................ 66 6.4 Recommendations for Businesses and Non-government Organisations ............. 68 About the Authors ..................................................................................................... 70 List of Appendices Appendix 1: BBC Article – Ebola: How Does It Compare? ............................................ 71 Appendix 2: Four Scenarios ........................................................................................ 75 Appendix 3: Relevant Government Department Strategies and Plans .......................... 83 Appendix 4: Relevant Legislation ................................................................................ 96 Appendix 5: Ministry of Civil Defence & Emergency Management (MCDEM) Business Plan 2014/15 .......................................................................... 118 Appendix 6: Lead and Supporting Agencies for Managing National Security Issues .... 122 Appendix 7: Trade Statistics ..................................................................................... 124 Appendix 8: Supply Chain Risk Matrix ....................................................................... 136 Executive Summary Small, at risk and unprepared? New Zealand is a small, remote island nation, and our isolation creates both opportunities and threats. Opportunities exist in terms of our ability to export good-quality produce at a cheaper price, due to our lack of pests and diseases. However, isolation brings threats to our supply chain. Trade is critical for export revenue and for imports of technologies, components and goods, and this trade is reliant on increasingly complex supply chains. Recent events, including the Fukushima earthquake and the Thai floods, have disrupted supply chains and led to increased recognition that supply chains need to be resilient as well as efficient. In other words, organisations and countries need to be prepared. Being prepared means different things to different people. Generally preparedness is considered in terms of the time citizens or communities are able to survive or thrive in isolation and whether the objective is to return to the status quo (bouncing back) or advance to a better situation (bouncing forward). Supply chain resilience is critical in terms of both survival and moving to a more resilient position over time. These characteristics, when combined, raise a number of questions: • Is New Zealand’s size and isolation a strength or weakness? • What risks might New Zealand face going forward? • How prepared is New Zealand if any of those risks eventuate? • What risks are unique to New Zealand? • Are we prepared for the perfect storm of a group of disruptive events? • How prepared do New Zealanders want to be? • Who will pay the cost of that preparedness? • Who is making decisions over the level of preparedness? • Who is matching our risk profile with our level of preparedness? • How good is New Zealand at managing types of risk? What do we do well and what do we not? What do we need to work on? • Who undertakes assessments of past disruptive events (both the preparation and the response)? In particular, how are lessons learned and the knowledge shared with the appropriate authorities? • What does a resilient New Zealand look like? What are the characteristics we are aiming to build into the framework? • Given some forms of resilience can be expensive, how should government decide what level of resilience New Zealanders should pay for? • Who assesses (stress tests) the extent of our supply chain’s resilience? 1 | Page A large number of different organisations can be involved in the supply of one good or service, including international organisations. Supply chain resilience refers to the extent that the chain of supply leading to production or consumption remains operational when exposed to operational or disruptive risks. System management to increase supply chain resilience is based on understanding the supply pathways and ensuring that mitigations are identified and in place for each material risk so that the system can continue to perform effectively. Assessment of the vulnerabilities of lifeline utilities is a tool to explore and manage one type of supply chain risk – the risk that certain entities might not be able to provide critical products or service in New Zealand. This report aims to draw attention to five high-level questions, and based on publicly available information, attempts to answer these questions as a way of identifying possible opportunities to build a more resilient New Zealand. The five questions that are explored in this report are: 1. Why Build a Resilient Supply Chain?
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