As the manufacturing sector strives to recover from the extended global recession and remain increasingly “lean” and cost-conscious, risk from business interruptions increases. With optimized supply chains, facility consolidation, automated processes and fewer staff, business interruptions of any magnitude can easily cripple a company’s ability to produce and deliver products to its customers. Once considered purely an IT issue, business continuity has now become an integrated part of manufacturers’’ fundamental resiliency of operation strategies.
Extended supply chains seem increasingly vulnerable to unpredictable natural disasters, as the floods in Asia, tsunami in Japan and the volcano in Europe have demonstrated. Extending the manufacturer’s proprietary business continuity practices and standards into the supply chain – and influencing or enforcing practices on key suppliers – is both more important and more difficult that ever.
There will be less and less tolerance for business interruptions by customers, shareholders and markets, as tools are developed to map complex supply chain risk and develop business continuity plans that address process industries whose models limit routine recovery or carry with them significant cost and partner implications. Protecting the complete value chain, by ensuring the continuity of vendors and suppliers, is of paramount importance, especially when the supply chain extends globally and suppliers often operate in regions with significant political and economic risk.
More and more major customers now formally require tangible business continuity plans of their manufacturers, so customers have assurance of their suppliers’ resilience and ability to weather both the literal and metaphoric storms that they face across their global footprint.
Industry Drivers and Trends
Increased concern from customers about your operational resiliency
Increased regulatory attention and economic sensitivity
Customer service level agreements mandating business continuity plans
Lean manufacturing, just in time inventory practices and consolidations reduce ability to respond to abrupt operational interruptions
Understand and validate vendor and business partner recovery capabilities
Increased dependency upon enterprise applications that can spread impact far more broadly
Single source or sole source supply arrangements may mean increased risk
Diversion, trans-shipping, counterfeiting, “grey” goods and supply chain “shrinkage” significantly impact globally-stretched supply chains
Better visibility into supply chains risks are required to make contingent business interruption insurance capacity more affordably available to global manufacturers
Risk Solutions International’s consultants develop business continuity plans and provide supply chain continuity and supply chain risk mapping tools to manufacturers – from greeting cards and food ingredients to confections and heavy equipment. Our automated survey-based applications provide global manufacturers with a tool to provide low cost plans to hundreds of locations customized to their unique operating environments.