BUSINESS CONTINUITY PLANNING FOR INTERRUPTIONS IN THE SUPPLY CHAIN Anthony Vatterott
Overview -2010 Business Continuity Institute: •70 percent of organizations recorded a supply chain disruption this year. •Adverse weather conditions were found to be the main cause of disruption. •IT and telecommunication outages are the second most likely disruption. •20% of business say their brand or reputation has suffered due to supply chain disruptions.
Phase 1: Assess Physical risks are defined and quantified. The risks identify vulnerabilityincritical processes. Prioritize critical processes by significance. Determine level of resources required, the period in which service will be recovered. Phase 2: Analyze
Phase 3: Design Develop strategies to minimize the outage impact. Define the role individuals play in affecting recovery. Simply, implement the solution design. Communicate with legal, HR, IT and Operations and off-site components. Conduct initial company awareness training. Modify the plan for new recovery scenarios. Phase 4: Execute Phase 5: Test
Success Stories Continental Airlines •Implemented CrewSolver software to allocate crew and resources after weather disruptions. •Factors cancellations, labor contracts, overtime, and sick/vacation time. • Achieved 100% on time flight arrivals in 1st month after 9/11. Saved $40 Million in 2001. •20% of coffee production from 4 plants in New Orleans, LA. Disrupted by Katrina. 1 facility inaccessible. •BCP at each facility allowed all 550 employees to be accounted for within 20 days despite faulty telecommunications. •Resumed full production capacity within 1 month, with 6% increase in coffee sales. Proctor & Gamble
Conclusion-BCP •Identifies the organization's exposure to internal and external threats. •Synthesizes hard and soft assets to provide effective prevention and recovery. •Maintains competitive advantage and value chain integrity.
ReferencesBarnes, J.C., 2001, A Guide to Business Continuity Planning, (New York, NY: John Wiley & Sons).Bowersox, DJ., and Closs, DJ. (1996), Logistical Management: The Integrated Supply Chain Process, McGraw-Hill, New York, N.Y.Chandra, C. and Kumar, S. (2001), “Enterprise architectural framework for supply-chain integration”, Industrial Management & Data Systems, Vol. 101 No. 6 pp. 290-303.Dimitruk, Paul A. (Dec 2005). Three keys to supply chain management in times of disaster. Healthcare Purchasing NewsP&G (December 2006). After Devastation of Hurricane Katrina, P&G Shows the Value of Best-Laid Plans. Global Logistics & Supply Chain StrategiesYu, G., Argüello, M., Song, G., McCowan, S., White, A. (2003).A New Era for Crew Recovery at Continental Airlines, INTERFACES, Vol. 33, No. 1, January-February 2003, pp. 5-22White Digital Media. 70% of Businesses Record Supply Chain Disruptions in 2010. (2010). Bukisa Online: http://www.bukisa.com/articles/386299_70-of-businesses-record-supply-chain-disruptions-in-2010#ixzz15Sntbfi5Zsidisin, George A., Ragatz, Gary L., and Melnyk, Steven A. (2003). Effective Practices for Business Continuity Planning in Purchasing and Supply Management, A Management White Paper.