The document discusses the importance of business continuity and resilience in order to avoid disruptions like natural disasters or pandemics that could threaten the business. It emphasizes having backup systems, communication strategies, and recovery plans in place for various scenarios to ensure the business can continue operating no matter what challenges occur. The key is considering all possible risks and vulnerabilities and having thorough, well-tested plans to address disruptions across business functions from IT to customer service to assets.

1. BUSINESS CONTINUITY: How to Keep the Grinch from Stealing Your Business Jack Hipple Elliot Consulting Predictive Failure Analysis Consultant www.elliot-consulting.com

2. WHAT DID THE GRINCH DO?

3. STOLE CHRISTMAS WHEN WE WERE NOT LOOKING (UNPREPARED?)

4. HOW CAN WE AVOID THIS FROM A QUALITY STANDPOINT? HOW CAN WE BE BETTER PREPARED?

5. WHAT’S OUR NORMAL VIEW OF QUALITY?

6. WHAT’S OUR NORMAL VIEW OF QUALITY? Knowledge of what the customer wants/needs, how to delight Knowledge of how to fulfill those needs and unspoken desires with products and/or services Supply that service and/or product reliably and consistently in a value added, win/win environment Awareness of changes in needs Recycle and repeat

7. IS THAT ENOUGH? You are Home Depot or Lowes You have done all these things for all your contractor customers There is a serious outbreak of Asian bird flu Some of your contractor customers close down ½ of your employees cannot report to work Your invoicing, accounting, and shipping/receiving departments are decimated by illness and vacancy Combine this with a major hurricane in the Tampa area at the same time

8. WHAT ARE ALL THE THINGS INVOLVED? Manufacturing Sales IT Human Resources Environmental, Health and Safety Shipping and Receiving

9. HYPOTHESIS: QUALITY IS ALSO THE ABILITY TO CONTINUOUSLY SUPPLY YOUR CUSTOMERS’ NEEDS NO MATTER WHAT!!

10. NO MATTER WHAT…. Remember 2004? 4 Hurricanes in 6 weeks!

11. BUSINESS RESILIENCY What comes to mind? Physical Analogies?

12. LET’S DISTINGUISH BETWEEN--- BACKUP CONTINUITY RESILIENCY

13. LET’S DISTINGUISH BETWEEN--- BACKUP Retrieve information Supply alternative CONTINUITY The “whatever” is there for some time frame to keep things going RESILIENCY Business survives as if nothing happened under any circumstance

14. Business Resiliency Before After Assets Finance Vulnerability and Risk Communications IT Customer Care

15. VULERABILITY AND RISK What is your business and the quality of its products vulnerable to? Have you thought about all the possibilities? Weather Terrorism (physical, biological, chemical) Pandemics Supplier default due to the same things Customer default to the same things What is the economic impact? Hours, days, weeks, months, years?

16. WHAT IS YOUR BUSINESS TOLERANCE?

17. WHAT’S THE RISK? Get real, but not doomsday (80/20) Longer than you think Short term vs. long term Can you be replaced? By whom? Are the affected at the same time or not? Physical, financial, structural What affects the most customers and the future of the business Reliability of resources planned upon

18. COMMUNICATIONS AND DATA STRATEGIES Employees Suppliers Customers Internet and communication systems Verizon story Data backup Not a different floor in the same hurricane prone building! Cell phones OK until the power is off for several days—then what?

19. CRISIS MANAGEMENT Dependent upon the type of business Chemical manufacturing Knitting goods supplier Newspapers, TV, radio Who needs to know what, how, when, and how soon

20. INCIDENT COMMAND SYSTEM Originated with CA wildfire systems Restore facilities Assess, control, and minimize asset damage Control the conditions Focal point for communication and reporting Business report

21. BUSINESS RECOVERY Grab and Go Box Immediate needs, contacts, and information Where to meet, assemble Who? What type of emergency? Duration of Emergency What if it’s months, not days? Communication system and protocol for employees Pay and benefits?

22. IT RESTORATION Backup what? How? Redundancy? Where? To what level? How often checked? Weather Rain, wind, temperatures, salt water

23. RESILIENCY: Before and After, Not Just During

24. IT BEFORE DURING AFTER Survivability Backup Recovery What are all the factors that might affect? Which are most important? Is the plan tested?

25. ASSETS BEFORE DURING AFTER Survivability Protection Damage Analysis; Assets Assessment Prioritization Contacts Claims Are these up to date? Competition for protection?

26. Customer Care BEFORE DURING AFTER Who? When? Defined Contact How? Re-contact Alternative Contact Assess Supplier Plan Partner Plan Quality Impact? Check! Participate

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28. AWARENESS It IS possible! Impact Short term, long term Equipment, suppliers, supplies, information, customers, people, cash Before, during, after How long after?

29. BUSINESS IMPACT ANALYSIS Translation of the risk into bottom line calculations How much protection vs. cost A trade-off, but easy to err on the side of optimism

30. A WRITTEN BUSINESS RESILIENCY PLAN Write it down! Review it! Memorize the key points of it—you may not have much time Terrorism evacuation notice for Tampa Second most dangerous port in the country (Anhydrous ammonia for fertilizer manufacturing in central Florida)

31. TRAIN, PRACTICE, AND REVIEW Practice, practice, practice! A fire is the wrong time to do a fire drill Simulate different conditions Changes in political, health, and terrorist threats Type, degree

32. A SUPPORTING TOOL: PREDICTIVE FAILURE ANALYSIS ™ Note: Brief mention of this in 9/05 presentation made to section

33. HOW DO WE NORMALLY TRY TO THINK OF ALL THE THINGS THAT MIGHT GO WRONG? Imagine Checklists Our own Industry Technical or business society Do these work adequately? Chemical plant releases, defective products, unforeseen consequences Recycle and learn over time

34. AN ALGORITHM TO ASSIST State the problem of concern My business backup plan works Invert the problem I don’t want my backup plan to work Exaggerate the inverted problem I NEVER want my backup plan to work How would I make that happen? What has to happen? What resources do I need? The list will always be longer than our fist list Prioritize, plan, act

35. EXAMPLES Communication Backup supply Verizon Internet Example Personnel Customer service Billing and invoicing

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