10/12/2020 Business Continuity in the Manufacturing Industry | Stay In Business

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BUSINESS CONTINUITY IN THE MANUFACTURING

INDUSTRY

A major retail chain’s stock of pastries was severely a ected when operations
RESOURCES
at its primary vendor’s production center (a ready to eat foods company) was
disrupted due to an incendiary accident. Despite having an e cient response Advantages of Stay in
strategy in place that was immediately deployed, the confection of pastries at Business
the vendor’s location could be resumed only after three days. By which time, Business Continuity
the retail store chain had already found an alternate supplier. The pastry Business Continuity
confectioner went out of business. Management Planning
Business Continuity
Customer needs take precedence over everything else. An organization’s Plans
Business Continuity and Disaster Recovery (BCDR) strategy is relevant only Business Continuity
when the plan’s timeframes are closely aligned with its clients’ demands. Risk Assessment
Business Continuity
The majority of crisis situations have a relatively negligible impact on Auditing
operations and most emergency teams have prede ned plans that can
Business Impact and
adequately respond to these hazards. Risk Analysis as a part
of disaster recovery
However, experts suggest that enterprises will have to confront at least one
planning
large scale disaster of catastrophic proportions every ve years. The impact of
Consulting Services
such events can be devastating. Recovery from such widespread destruction
Corporate Management
is a long drawn process that spans over many years. In extreme cases, many
commercial establishments su er major losses in revenue, lose business Crisis Management
Plan
from important clients, or even shut down permanently, never to resume
operations again. Preparing against such disasters is vital for the company, Digital Property and
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Assets
especially in the case of industries such as manufacturing where facilities are
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installed with heavy machinery and equipment that have a minuscule margin Disaster Recovery
for deviation. This is to say nothing of the risk that can be hazarded to life Planning Software
and safety of personnel in the event of failures or malfunction. Enterprise Risk
Management (ERM)
Business entities are constantly vulnerable to a variety of threats that are Emergency Noti cation
caused by the environment and human intervention such as: System
Emergency
Cyber crimes and intrusions
Noti cations
Lack of utilities such as water, gas, electricity and fuel
Emergency Response
Outbreak of diseases and epidemics
and Operations
Environmental hazards such as global warming, climate change and CO2
IT Disaster Recovery
emissions
Management
Many of these threats can imply dire and irreparable consequences for the IT Security and
organization if not dealt with decisively. Governance
IT Compliance
Emergency teams must have a plan that can be readily deployed the moment Management
a disaster occurs. Notwithstanding the practical considerations while Online Document
executing a crisis response, outlining a recovery strategy after a disruption Storage for Businesses
erupts is not highly recommended, given the high levels of tension and panic Risk Management
that unfold during such events. Vendor Management

And then, there are other factors such as:

Backing up assets and machinery

Workarounds for business processes
Identifying alternate vendors
Safeguarding critical systems and data

While manufacturing companies have an organizational structure that, in

general terms, resemble businesses in other industries, some speci c
problems such as supply chain disruptions and lack of assets, resources and
skilled personnel become more critical in this sector, considering the nature
of operations entailed.

BUSINESS CONTINUITY MANAGEMENT IN THE

MANUFACTURING SECTOR
Business resiliency begins with averting operational hazards that can hamper
production. But when a crisis situation does erupt, the enterprise’s emergency
team must have a working model for restoring operations without
compromising on the qualitative or quantitative demands of clients.
Formalizing these goals and objectives through written policies and SLAs can
ensure both client and manufacturer are on the same page.

Logistical issues, IT infrastructural failures and defective goods that

compromise safety are some of the common factors that impact the
manufacturing industry. Crisis teams can deal with most of these hazards
through standard mitigation measures that can be e ectuated seamlessly
with minimum perceptibility from the customer’s side. But the last ten years
has seen the business landscape become increasingly volatile and erratic.
Price uctuations, nancial institutions’ vulnerabilities to economic changes,
catastrophes and sociopolitical unrest are becoming increasingly common.

The impact on productivity is the primary concern for any manufacturing

establishment and the prime objective is to manufacture as many quality
units of merchandize as possible with the least expenditure. And towards this REQUEST A DEMO
end, many manufacturers introduced manufacturing methodologies such as Privacy - Terms

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LEAN and inventory strategies such as Just in Time. While these practices
have increased e ciency and reduced operational budgets, the extent to
which an emergency can impact business has also increased.

Some of the commonly encountered operational hazards in the manufacturing

sector include:

Losing access to a facility or the facility itself through damage

Unavailability of commuting options
Lack of connectivity
Fatalities and illnesses
Defective goods and safety concerns

For instance, a corporation with multiple sites might look at cutting down
costs by moving its production from all the sites to a single location that has
the infrastructural capabilities to handle such large volumes of output. But
although the company is saving money and increasing pro ts, the commercial
implications of a crisis situation at this single location would be much more.
Earlier, the organization could fall back on any of its multiple production
facilities if one center was a ected. And even in the case of the single
location, if there was a business continuity and disaster recovery framework
in place, the demands on its performance would be that much higher, since
the entire organization’s business is dependent on this one location. This in
turn would imply more investments in terms of assets, technology, personnel,
training and so on.

In the case of a Just in Time model, critical factors include:

Connectivity, so that IT systems are operational

Vendor resiliency, so that raw materials and components crucial for
production are provided on time
Transport facilities, so that these inputs for manufacturing can be made
available

There are two primary options to preventing supply chain issues. The rst is
by prioritizing urgent needs and seeing through the purchase of materials to
meet monthly, quarterly, half yearly or yearly production demands. These can
be e ectuated as standalone transactions. The second option is to negotiate
contractually binding lock-ins with tier 1 and tier 2 vendors for a tenure that
lasts at least ve to ten years.

A vendor’s core business focus is also an important factor to consider while

nurturing long term alliances with strategic partners. Airline manufacturers
should carefully assess the product portfolio of third party partners to gauge
future needs and the supply of backup materials. Collaboration with third
party business associates is essential while deciding on a strategy to tackle
risks such as in ation, economic crisis, market downturns and so on.

In the case of a Just in Time model, critical factors include:

Connectivity, so that IT systems are operational

Vendor resiliency, so that raw materials and components crucial for
production are provided on time
Transport facilities, so that these inputs for manufacturing can be made
available

Even in the event of twin production lines being available, due excessive REQUEST A DEMO
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will cope with delivery requirements if one of the two units fails.

SUGGESTIONS WHILE PREPARING FOR DISASTER

No plan is one hundred percent comprehensive. Even the most detailed and
well thought out business continuity and disaster recovery model would have
overlooked a risk or two. Nevertheless, a manufacturing unit must keep these
basic guidelines in mind while designing a resiliency framework.

1. Identifying key merchandize that are the most commercially viable. The
company’s revenue usually depends to a large extent on these products
2. Identifying the natural or manmade hazards that can impact the production
of these goods.
3. Designing a business continuity and disaster recovery that can fortify the
production facility’s infrastructural capabilities to seamlessly transition
crisis situations and deliver these goods.
4. Assess the extent to which the BCDR design satis es the organization’s
resiliency requirements through regular testing, simulated exercises and
drills.
5. Keep systems and procedures updated through periodic upgrades and
enhancements.

CONCLUSION
Experts unanimously agree that business disruptions are inevitable, even in
the most well guarded manufacturing facilities. And a robust BCDR plan has
become the de ning factor that di erentiates a company from its
competition. Having said that, it must be acknowledged, especially from a
manufacturing perspective, that any emergency plan is not a one o project
but rather a constant endeavor to improve upon existing systems.

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