supply chain business continuity plans: 3 areas to improve

Supply Chain Business Continuity Plans

3 Most Common Areas to Improve with Highest Payoff

Bill Kohnen June 2014 ASEAN Supply Chain Forum

Executive Summary• Prior to the Japan earthquake/tsunami most global

organizations had general boilerplate business continuity framework meet minimum audit requirements.

• Following Japan plans were updated and lessons learned added

• Now surveys suggest most organizations need to review plans

• Given limited resources 3 areas with big impact to focus on are– Damage Assessment– Communication– Transition back to normal operations


3 Areas to Consider

• Damage Assessment

• Communications

• Return to Normal Operations


* Of Course Safety and Security of People in the Aftermath of a disaster is most important and takes priority however, that activity is best addressed as part of Emergency Response Team (ERT) protocols.

Damage Assessment

• Need get Engineers to site fast to determine extent of damage

• Reporting so recovery plan can begin• Surprisingly affordable with 3rd party as

quarterly fee which includes baseline and updated reviews of site so responders will all ready know what “normal” is.

• Can pre negotiate rates applicable if event happens


Damage AssessmentWhen Resource Action

Immediately After Event Contract with global or large local engineering/ construction company with resources near your site for first response service.

Need to set up prior to event. Consider global companies like Fluor, M+W etc.. And also local ones.Include baseline site review and min 2x per year walkthroughs and updates

Reporting Set up mechanism for initial reports to be prepared and sent to stakeholders

Getting accurate reports to stakeholders fast will be a competitive advantage

Initial Recovery Have damage assessment team independently review initial plan

For site check and balance

In Process Recovery Damage assessment done when recovery actually in process

Next review would be at scheduled walk through

Communication

• Physical communication post event unpredictable

• Put in place automatic process for actions required for as many items as you can

• Deploying a team to the region with corporate authority but not actually at site can be effective.


CommunicationWhen Resource ActionImmediately After Event Site Team

Corporate SupportContractors

Identify “trigger” events and protocols to follow without need for further communication or approval.Compensate those required to act for the responsibility.

Reporting Physical and Process Get some SAT phones but do not count on themEstablish where regional recovery team will beBe prepared to have team members as couriers to share info

Initial Recovery Physical and ProcessRegional Corporate Teams most important phase

Physical less an issue at this pointFocus is on understanding, expectations, and timely further resource

In Process Recovery Typical Solid Project Management Reporting

At this point not rocket science but assumes team is strong in project management fundamentals.May require training

Return to Normal Operations

• Goal should be to transition control and resources for recovery back to site team as soon as possible

• Probably better to transition back a bit to early rather than to let the control last to long with the recovery process

• Generally time to draw down for the site is once the recovery plan is in process although until full production returns there still may be a smaller team in place managing customer fulfillment issues


Return to Normal OperationsWhen Resource ActionImmediately After Event Site Team

Corporate SupportContractors

Important that the site has cross functional representation at various levels from the beginning.

People who would be assigned as corporate support must make at least annual visits to the site and understand its basic operations

Reporting Physical and Process Focus of all reporting is baseline vs. current status. Do not allow additional improvements or nice to haves

Initial Recovery Regional Corporate Teams most important and final phase

Insure mechanisms in place for approvals for resources Process for handoff to Site Team established

In Process Recovery Site Team augmented by Project Manager to stay until actual recovery complete.

Identify potential project managers utilizing resources from other regions or corporate offices. If a third party make sure they know the site.

Summary

• While it is worth reviewing the entire BCP the areas presented tend to provide the most actual benefit in practice.

• Training of team members and building some level of team cohesion will deliver dramatically better results. A natural way to do this via simulation exercises

• Provide at least minimal additional compensation/reward for those with added team responsibility.

• Rotate team membership occasionally
