It Is Time to Think About Business Continuity Planning
As the end of 2010 approaches, many businesses are taking some time to reflect on the past year and look ahead to 2011. Business continuity planning (BCP)—identifying your company’s exposure to both internal and external threats and implementing steps for prevention and recovery while sustaining a competitive advantage—is not on many mold manufacturers’ to-do lists. But it should be.
According to Brian Zawada, Co-founder and Director of Consulting for Avalution Consulting (Cleveland, OH)—a business continuity consulting firm that assists organizations in preparing for disasters before they occur—BCP is a considerable challenge for those involved in manufacturing. “Unlike industries where operations can be more readily moved to other office locations, manufacturing is more complicated,” he explains. “Specialized and difficult-to-replace equipment, single and sole source suppliers, prolonged raw material lead times and unique personnel skills can make recovering production processes complicated.”
Because of such intricacies, Zawada emphasizes the vital importance of addressing all scenarios using all-hazards planning approaches—from power loss and theft to a natural disaster. “Manufacturing business continuity often pays more attention to managing the likelihood of an event causing downtime when compared to many other industries,” he states. “People charged with business continuity in a manufacturing environment spend a significant portion of their time protecting critical single points of failure—as opposed to planning for their recovery. There’s nothing wrong with that, but business owners and managers need to understand that preventing downtime isn’t always possible and therefore time needs to be spent planning for recovery following disruption.”
Zawada goes on to acknowledge that redundancy is not the only approach. “It doesn’t make fiscal sense to duplicate the business ‘just in case’. But there are strategies to consider in order to expedite the recovery process, which includes preparing design documentation in case the business needs to source replacement equipment. Other strategies may include identifying alternate suppliers, or even identifying contract manufacturers that can assist following a no-notice manufacturing disruption.”
According to Zawada, the following are the most important steps to take when developing and implementing a business continuity plan. But before beginning the planning process, consider identifying a primary “go-to” person to lead the effort, advised by a team of cross-functional managers that represent the business as a whole. The business continuity planning lead doesn’t have to be a full time assignment, but this individual needs a number of key skills and experiences to be successful, namely organizational and team-building skills, knowledge of the business and a process-oriented mindset. Communications skills are critically important given the need to “sell” management on the right solution and get response and recovery strategies down on paper.
1. Understand customer expectations and their flexibility to address periods of time when your products and services would be unavailable. Review contracts and understand your customer’s use of your product. Find out if your customer has safety stock to address periods of disruption. Lastly, perform your own assessment of business criticality and identify your most critical products and services that require protection and recovery planning.
2. Take inventory of what it takes to deliver your critical products and services and how you might resume production/delivery using alternate resources and processes. For example, what are the facilities, equipment, raw materials, suppliers, employee skills, information technology systems and information necessary to manufacture and deliver product to your customer? If any of this was lost, could you—in a pragmatic manner—replace it in a way that meets “most” of your customers’ expectations and preserves your reputation? Who could assist your organization and what can you do now to prepare to resume operations if your primary resources were unavailable for a period of time? These are the questions to ask yourself before a disruptive event impacts your business.
3. Identify your single points of failure and dependencies on others, as well as the vulnerabilities that exist as a result. Single points of failure are commonplace and the reality of businesses both large and small. Understand your vulnerabilities and the impact on the business, specifically your most critical products and services. Prepare to react if a single point of failure in fact fails.
4. Document a plan that summarizes key procedures to respond and recover; emphasize how you will communicate internally and with suppliers, business partners and customers throughout the course of the crisis (see Business Continuity Plan Sidebar, page xx).
5. Practice your response and recovery effort using a scenario-based discussion, and ensure all employees understand the firm’s business continuity approach and individual roles and responsibilities. As your business becomes more and more comfortable regarding response, recovery and communications strategies following a disruptive event, consider practicing your reaction. One of the more common, cost-effective techniques is to gather members of the response and recovery team together and use your plan to discuss the response to and recovery from a fictitious event (e.g., hurricane, power outage, fire, public health event, loss of a sole source supplier). This is known as a tabletop exercise. Discuss how you would assess the situation, estimate downtime, review recovery strategies, communicate with employees and customers and implement an approach to resume operations in a timely manner. Not only will this create awareness, but the exercise process should highlight improvement opportunities for management consideration.
Learning the basics of business continuity planning before a crisis occurs is paramount to running a successful business. Develop a plan today that can ensure the long-term survival of your shop through a temporary interruption.
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