Business continuity plans as beacons of resilience, stability in supply chain

THE old age cliché that failing to plan is planning to fail seems to hold very true in business continuity planning. Said differently, others will say failing to prepare is just as good as preparing to fail.

Again, in few instances does this strike closer to home than in business continuity planning. Business continuity planning is “the strategic and tactical capability of the organisation to plan for and respond to incidents and business disruptions in order to continue business operations at an acceptable predefined level”.

Recent global incidents have thrown the risk of supply chain disruption into spotlight. Supply chain disasters are not matters of if butmatters of when and where. This has created a derelict of supply chain’s past glory of resilience and stability.

Supply chains the world over are increasingly susceptible to disruptions and catastrophes with increasing frequency and high impact.

Supply chain disruptions have been on front page news for a while. Increasing complexity in today’s supply chains comes with increasing uncertainties.

Supply chain professionals have been exposed to very difficult circumstances where their major suppliers have faced dire consequences of being unprepared when disaster strikes causing serious supply chain bottlenecks.

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To minimise the damages associated with supply chain disruptions, supply chain practitioners are encouraged to rank their major suppliers on a scale of what’s most critical to the organisation and make sure those critical suppliers have business continuity plans in place.

We rarely get advance notice that a supply chain disaster is ready to strike. Even with some warning, multiple things can go wrong when a disaster strikes, every disaster is unique and unfolds in unexpected ways.

Supply chain business continuity plans are, therefore, important in that they create roadmaps to follow in the event of an emergency.The goal of such plans is to mitigate the damage and reinstate business operations back to normal before any disruptions become existential business threats.

Disasters have always and will always continue to keep supply chain professionals awake at night. It has become almost impossible to predict their nature, time and extent.

Disasters come in all shapes, forms and sizes to include natural disasters, such as floods, hurricanes, tornadoes, earthquakes, disease outbreaks, pandemics, and cyber-attacks.

Natural disasters can easily cause significant damages to physical infrastructure, resulting in serious disruption to operational activities. Other sources of disasters may include terrorists’ attacks, strikes, financial crises, environmental disasters, infrastructure problems, wars, intentional sabotage, unreliable systems and supply chain failures.

There are also various forms of man-made threats to include malware, utility failures, legal claims, ransomware and accidental data deletion. Mistakes or errors made by staff members or through your suppliers can result in system failures, data breaches or other disruptions to business operations.

Supply chains are also susceptible to computer network and hardware failures and can lead to data loss.

Pandemics, such as Covid-19 left a lasting impression on everyone, in particular, supply chain professionals were forced tore-evaluate their supplier’s business continuity plans and rank that process high on their optimisation list. If nothing else, pandemics of that nature has taught us that simply asking if a supplier has a business continuity plan in place is no longer enough.

Covid-19 has, therefore, served as a dramatic reminder that it is almost impossible to predict the unpredictable. For most supply chains, it laid bare the risks of not having a business continuity plan in place.

In the grip of any crisis such as Covid-19 or Cyclone Idai, it became clear that the more granular your supply chain business continuity plan, the more comprehensive your disaster recovery strategy.

The disruptive events that global supply chains are increasingly encountering should be seen as an opportunity to re-align the supply chain to the shifting market dynamics.

As has been demonstrated by Covid-19, supply chain contingency plans shall remain in the spotlight, with supply chain practitioners being required to adopt forensic analysis of the entire supply chain ecosystem.

Business continuity planning is just exactly what it sounds like – a way of addressing unexpected challenges. Such kind of continuity and recovery plans prevent disruptions from snowballing into long-lasting spiral of business failures.

Supply chain disasters can open an organisation to a cacophony of costly business challengeswhich can prove to bemore expensive and more cumbersome than preparing for the disaster in the first place.

Thought leaders in supply chain will need to know, which moving parts of the business are critical to keep on running when a disaster strikes. The due diligence on the major supply chain partners of the business should consider the risks associated with the partner’s ability to meet their deliverables in the event of unexpected disruptions.

Every supply chain ecosystem can face challenges of any scope and scale of severity. How the supply chain anticipates, responds and protects the business is paramount.

It will be a strategic must for every supply chain to carry out a business impact analysis to identify time-sensitive or mission critical business functions and processes and the resources that support them in the event of a disaster.

This will enable the business to bounce back swiftly when hit with adversity. As fate would have it, supply chain professionals spend most of their time solving operational challenges, and because of that it may appear as if preparing for a disaster that may never happen could easily be regarded as a waste of time and valuable resources. But the opposite is true.

Savvy supply chain professionals have been primed over the years to regard a business continuity plan as more than just a plan, they regard it as a way of thinking. It should be regarded as a way of life.

Supply chain professionals must always be asking the following questions. What is the worst that can happen in the event of a supply chain disaster? Are we always ready to deal with such known unknowns?

It should be common sense for such intricate questions to linger in people’s minds from time to time. But is common sense common practice? One wonders.

Supply chain leaders are, therefore, required to give themselves the task of imagining worst-case scenarios or what if scenarios, given the intricacies associated with supply chain disasters. Such kind of forward-thinking philosophy should promote planning for the worst while hoping for the best.

Business leaders must also be reminded that supply chains will never be static, neither is the business environment in which we currently operate from. This truism is clearly observable in supply chain. It is, therefore, critical to regularly review your business continuity plans incorporating new mitigatory initiatives that may potentially protect your business. This will prevent disruptions that could otherwise have cascading effect on the smooth operation of the supply chain.

However, it should also be noted that it is not practical to be on top of all potential risks. There is need to just focus on those important business areas that poses higher levels of risks. Supply chain practitioners must determine what supplies and services are mission critical to the business and if push comes to shove how long can the business survive without them.

Business continuity plans should be regarded as more than just a reactive strategy, it must be seen as a proactive measure of ensuring that critical business functions can continue during and after a crisis.

Supply chain leaders must also take into consideration whether alternative sources of supply are readily available. There is need to have strong secondary and tertiary supply sources just in case the regular channels of supply are disturbed.

The health functioning of an organisation’s supply chain reflects the health of the business.  A well-thought-out business continuity plan endowed with a huge supply base is key to getting up and running after a disruption.

Business continuity plans could also be highly regarded as risk management tools that can be relied upon to manage potential disasters in a highly volatile and unpredicted business environment.

A business continuity plan is akin to an insurance policy for an organisation, it being a risk management framework that tries to minimise unpredictable threats and unforeseen circumstances that could easily put the business on hold.

Supply chain business continuity plans will allow supply chains to meet challenges head-on ensuring that continuous business operations are sustained in the event of a calamity.

Establishing procedures and protocols for responding to emergencies will be a risk management tool to facilitate quick bounce-back times whenever a disaster strikes.

But there is always a caveat to the success of business continuity plans. Collaboration with strategic partners is key. Every collaboration starts with a conversation.

Supply chain professionals will be required to collaborate with major supply chain partners with a view to creating a safe pair of hands that can be counted upon in the event of a disaster.

The global village in which supply chains operate causes disruptive events to propagate across countries and industries. They often involve collateral damage to other systems affecting both upstream and downstream supply chains.

The shift from traditional purchasing to a collaborative supply chain is not just a change in nomenclature, it represents a significant shift in the way organisations run their supply chain activities for the sustenance of their operations.

The scope and complexity of today’s supply chains create a web of interdependence that is hard to track. Organisations are highly dependent on invisible networks, which happen to have multiple vulnerabilities that is why collaboration is key.

Business challenges will grow exponentially in line with the scope and complexity of the network. Your organisation’s supply chain can find itself at major risk from something totally unexpected within the complex web of business partners putting the whole supply chain at risk leading to a domino effect of negative outcomes.

Collaboration is, therefore, important in that the business community’s businesspractices that can easily expose your business to regulatory and reputational repercussions can be avoided.

Such negative practices can create a ripple effect that impacts the rest of the chain and all the business partners in the chain. The more connected your supply chain to other supply chains, the higher the risk of exposure.

The supply chain’s touch points both upstream and downstream can easily contribute to exposure if collaboration is lacking. Actions at any given level within the network may be inadequate unless the entire network responds in kind through shared goals.

• Nyika is a supply chain practitioner based in Harare  —  charlesnyika70@gmail.com