Supply Chain Business Continuity Plans: 3 Areas To Improve

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In the aftermath of the Japan Earthquake/Tsunami most global organizations updated their business continuity plans. However, several years later many plans have been gathering dust. With limited resources organizations can focus on updates to details for 3 key areas: damage assessment, communication and return to normal operations.

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Supply Chain Business Continuity Plans: 3 Areas To Improve

  1. 1. Supply Chain Business Continuity Plans 3 Most Common Areas to Improve with Highest Payoff Bill Kohnen June 2014 ASEAN Supply Chain Forum
  2. 2. 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 Bill Kohnen June 2014 ASEAN Supply Chain Forum
  3. 3. 3 Areas to Consider • Damage Assessment • Communications • Return to Normal Operations Bill Kohnen June 2014 ASEAN Supply Chain Forum * 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.
  4. 4. 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 Bill Kohnen June 2014 ASEAN Supply Chain Forum
  5. 5. Damage Assessment When 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
  6. 6. 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. Bill Kohnen June 2014 ASEAN Supply Chain Forum
  7. 7. Communication When Resource Action Immediately After Event Site Team Corporate Support Contractors 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 them Establish where regional recovery team will be Be prepared to have team members as couriers to share info Initial Recovery Physical and Process Regional Corporate Teams most important phase Physical less an issue at this point Focus 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
  8. 8. 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 Bill Kohnen June 2014 ASEAN Supply Chain Forum
  9. 9. Return to Normal Operations When Resource Action Immediately After Event Site Team Corporate Support Contractors 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.
  10. 10. 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 Bill Kohnen June 2014 ASEAN Supply Chain Forum

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