Business Continuity

Often those unfamiliar with building a comprehensive Business Continuity Program will not be aware that just downloading and filling in a template from the internet to check a task box is not the appropriate solution for protecting your business.  Using the 12 components for Business Continuity Planning and maturing over time through exercising and continuous improvement practices will increase the chances of recovery in times of crisis. 

The 12 components of a Business Continuity Management Program framework include creating a strategy for a program that involves engaged sponsorship from executive management, and the board of directors. The early phases of the program where a Risk Assessment and Business Impact Analysis (BIA) are conducted establish a baseline of business requirements from which the other components of the program activities are built and aligned.  The 12 components of Business Continuity are the foundation of any best practices and establish the framework of your program:

1. Policy
2. Standard
3. Governance (Processes & Charter)
4. Risk Assessments
5. Business Impact Analysis
6. Business Continuity Planning
7. Disaster Recovery Planning (IT)
8. Crisis Management with a Succession Plan
9. Emergency Management-Life Safety
10. Testing/Exercising Plans
11. Training and Awareness
12. Continuous Improvement

Building a program that protects the supply chain for a company requires all of this and more.

“Most companies know supply chain vulnerability poses a threat to their operations, yet few perform analysis or plan strategies to minimize risk to the bottom line.

Businesses can protect against disruptions by adding supply chain redundancy and strengthening your logistics operations.

1. Perform a supply chain vulnerability audit. Start with your customers and the products they purchase and work back to raw materials suppliers.
2. Do rigorous "what-if" analysis. Identify situations that could disrupt operations and develop contingencies to overcome these scenarios. Ask questions such as "What if we lose this supplier?" to create a strategic supply chain design that is optimally hardened against disruptions and serves as a cornerstone for a comprehensive business continuity plan.

Implement a strategic supply chain plan that mitigates the impact of disruptions. The trend toward lean inventory means many contemporary supply chains are "taut" or "brittle," and therefore vulnerable to disruptions. Reconsider inventory positioning, sourcing, and transportation options to create a more flexible supply chain.

4. Compare the cost of stockpiling inventory against the risk of losing sales and customers and creating a negative impact on bottom-line profitability. Too much inventory at the wrong location adds to bottom-line costs. Determine optimal inventory policies and levels to sustain your company.
5. Make sure you have multiple transportation plans in place. Ruptured transportation means products and parts face delays in getting to customers. You can continue shipping products to customers—if you have alternative transport plans.
6. Update plans regularly. Factors such as new government regulations or suppliers can cause fluctuations in your company's vulnerability levels. It's vital to put in place consistent programs for updating your supply chain's resilience by reevaluating its design and instituting a corporate culture of security.
7. Create a balance between supply chain network efficiency and operations resilience. Take a holistic view of your supply chain to determine optimal network designs that ensure products are manufactured in the right location at the right time and will ship to the right customers.
8. Put alternative raw materials and manufacturing sourcing plans in place. Strategic planning ensures companies have alternative parts and supply sources, along with balanced inventory levels.
9. Develop mitigating strategies from the C-level. CFOs and others involved in corporate risk analysis and reporting need to take a realistic view of business risk from unimaginable real-world events, which have a very real probability of occurring.
10. Design long-term strategies as well as responses to short-term disruptions. These include critical location, customer, capacity, raw materials, and crisis response analysis.

Please note this link is from 2011 - http://www.inboundlogistics.com/cms/article/protecting-your-supply-chain-against-disruption/

You can take steps to limit the impact of supply chain disruption, such as warehousing inventory and using multiple suppliers when possible. Purchasing specialty insurance policies, including contingent business interruption (CBI) insurance and supply chain insurance can also limit your exposure to loss. These types of insurance reimburse your business for lost profits and related costs caused by disruptions in your supply chain even if your company itself has not suffered any damage.

Keep in mind that it can take two years or more for a company to recover from a supply chain failure. Significant supply chain disruptions can reduce revenue, cut into market share, threaten production and distribution, inflate costs and ultimately affect a company’s bottom line. Whether you run a global corporation or a small business, you need the proper insurance coverage to protect against supply chain failure.