Continuity 2 2 301 Ltd

1. Continuity 22301 Ltd Adding value with resilience Managing Consultant David J. Window MBCI/MCIPS Continuity 22301 Ltd Company Registered Number: 07714424 dave.window@continuity22301.co.uk

2. Dave WindowBiography 38 years in the utility sector Graduate of the Chartered Institute of Purchasing and Supply (MCIPS) since 1987 Procurement Consultant, Lagos, Nigeria 1988 Head of Supply Chain, Eastern Europe 2000/2003 Corporate Business Continuity Manager FTSE 100 utility business 2008/2010 Member of the Business Continuity Institute (CBCI 2008/MBCI 2012) Managing Consultant @ Continuity 22301 Ltd 2011 BS25999 Lead Auditor 2011 ISEB Practitioner/Tutor 2012 Certificate of the Institute of Risk Management (CIRM/Merit) 2012 Animal lover Bali Zoo 2010: 2 month old Orang U Tang, I’m the taller one

3. Risk and resilience in Supply Chain BCI Manchester 8th March 2012

4. Common Objectives CIPS-Supply Chain objectives BCI-SUPPLY CHAIN objectives • To supply the organisation with a flow of materials and services to meet its needs • To ensure continuity of supply by maintaining effective relationships with existing sources of supply either alternatives or to meet emerging needs • Source: Procurement Principles and Management, Tenth Edition • The outcome should be a resilient supply chain which can manage disruptions without seriously impacting the delivery of products and services to the customer • Supplier continuity should form a significant part of the assessment of tenders…an annual review is recommended • Source: Good Practice Guidelines 2010

5. Alternatively! To ensure continuity of supply by maintaining effective relationships with existing sources of supply, either alternatives or to meet emerging needs. The outcome should be a resilient supply chain, which can manage disruptions without seriously impacting the delivery of products and services to the customer.

6. Common Culture? Buyers have been urged to remember their business’s overall strategy when trying to transform their procurement If procurement cannot align itself with what the organisation wants to achieve, it will not get the support that it wants Source: Procurement Principles and Management, Tenth Edition A BCM programme needs to reflect the organisation’s strategy, objectives and culture to ensure that the programme is relevant, effective and appropriate Source: Good Practice Guidelines 2010

7. Global 3 dimensional not linear/circular Nodular (Nodes) Tiered Complex Categorised What is a supply chain?

8. UpstreamDownstream Upstream : “The tiers of suppliers in front of an organisation moving materials in. (This includes both goods and services) Downstream: The tiers of customers after an organisation receiving its products (goods or services) The supply chain describes the total journey of materials as they move from ‘dirt to dirt’ (Cooper et al., 1997). Source: Purchasing and Supply Chain Management, CENGAGE LEARNING

9. Your business is the epicentre • Tiers and Categories Supply Chain Departments consider supplier categories Thinking of themselves as the epicentre they have tiers Tier 1 is those you are directly contracted to Tier 2 suppliers are contracted to tier 1 (sub-contractor or parts provider) Tier 3 could be contracted to both 1 and 2 (transport)

10. Kraljic Matrix Where do your risks sit in comparison to your supply chain categories? Which suppliers if they fail to service their contract are in the red or amber quadrants? Which critical products and services are you considering outsourcing? Outsourcing can mitigate or increase the risk Outsourcing could be an opportunity risk Suppliers use this in reverse Impact Low Likelihood High

11. High Impact with Low Likelihood Prudent to have Mitigation Controls BC Plans HIGH IMPACTS LOW High Impact with High Likelihood Mitigation Controls BC Plans Low Impact with High Likelihood Prudent to have Mitigation Controls BC Plans Low Impact with Low Likelihood Unlikely to require Mitigation Controls LOW LIKELIHOOD HIGH

12. “The baton pass”Interdependencies in the chain The greater the efficiency of a supply chain the faster the impact hits when it fails Supply Chains depend on each other to be efficient One failure will cause a domino effect Take time to understand the interdependencies

13. Supply Chain different strokes What does it mean to different parts of the business? Often seen as a police force A poor reputation for adding bureaucracy In its simplest forms deals with purchase orders and payments In a complex form will undertake an end to end process of sourcing, managing and purchase 2 pay

14. Supply Chain Metrics • Make resilience advantageous? Savings by Category Reduction in cost to serve Reduction of vendor database M.E.A.T. Most Economically Advantageous Tender Compliance with legislation (PPA) Corporate Social Responsibility

15. M.E.A.T. Products and services arrive when contracted for Total Cost of Acquisition Total Cost of Ownership Within budgets Cost is not just price Quality Storage Transport Disposal

16. Contractaward Tie the contract securelyYour never as close as the day you sign BCM? SRM? Distance Contract Concept Time Contract Determination

17. Continuity support in Supply Chain Save yourselves BC Plan DR Plan Manual Workarounds Select resilient suppliers I.D. Strategic supply chains Map supply chains Save the business Secure supply chains Secure alternatives

18. What is a strategic supplier? Their presence and performance is key to achieving your company’s business objectives Usually therefore involve a long term relationship Requires top management buy in and support between partner top management Their investment plans, financial status, business continuity plans should align to yours You need to be seen as core to their growth strategy

19. Do mitigation strategies increase costs or add value? Multiple vendors/multiple chains Buffer stocks Contingency stocks Strategic stocks On shore/off shore or both? In house or outsource? Just in case or just in time?

20. Continuity radar within supply chain Identification of urgent activities Impact of disruptions MTPD Dependencies Interdependencies Internal/external Think in categories Think in tiers Think upstream Think downstream

21. What NOT to do Do not cross the line Do not suggest they analyse ALL suppliers Do not suggest they map ALL suppliers Do not give them long questionnaires to use in tenders Do not suggest including BCM analysis in tenders disproportionate to the risk

22. Good Practice Guidelines (GPG) 2010 “BCM is not about everything”………“One example is supply chain: there is no need to mandate all suppliers to have business continuity programmes as part of their procurement process; it is better to go into more detail with those who are defined as critical in the Business Impact Analysis rather than expend the same amount of internal time (and suppliers’ time) in a non-discriminatory way” page 5.

23. What TO do Does your business undertake Business Risk Management (BRM)? Is supply chain failure an identified risk? If BRM does not exist? Identify strategically critical supply chains using Business Impact Assessments (BIA). Risk assess strategic critical suppliers Understand the dependencies in the category Map strategic supply chains both as a flow of products or services and from a geographical nature

24. The Development of Supply Chain as a Profession Continuity22301Ltd Adding value with resilience Risk, Continuity and Supply Chain Business Continuity Management Business Continuity BS25999 Audits Business Continuity Coaching and Training Not everything in life is black or white