No company is immune from crisis. So while ‘savage brawls’ like those seen at Foxconn may be uncommon, it is important that businesses are well equipped to handle and recover from unexpected disruptions.
1. Identify critical business functions
Apply a methodical approach to the threats that are posed to them. According to the Greater London Authority, around half of all businesses experiencing a disaster with no effective plans for recovery, fail within the following 12 months.
2. Remember seven ‘P’s needed to keep your business operational
Providers, performance, processes, people, premises, profile (your brand) and preparation.
3. For overseas suppliers – understand and track past incidents of known work stoppages.
Also obtain country-level intelligence so you understand what factors may cause a supply chain disruption e.g. working conditions, natural disasters, political unrest.
4. Agree and document your plans
These should never just be hidden away in the mind of the MD. Work with your ‘critical’ suppliers to make sure their business continuity plans fit with your objectives and are defined within your contract.
5. Make sure plans are communicated to key staff and suppliers
Equally, share them with other key stakeholders to boost their confidence in your ability to maintain ‘business as usual’.
6. Try your plans out in mock scenariosIf possible include suppliers in your exercises
Remember to test them not only in scenarios where there may be a physical risk, such as poor weather conditions making premises inaccessible, but people risks such as supply chain challenges and boardroom departures.
7. Expect the unexpected
The effect of the Foxconn brawl on Apple underlines that while lean and efficient supply chains make good economic sense, unexpected events can have a significant impact on the operations and reputation of businesses. A 2011 Business Continuity Institute (BCI) Supply Chain Resilience Survey found that 85% of respondents experienced at least one supply chain disruption in the preceding 12 months – illustrating how common supply chain disruptions are.
8. Make sure your continuity plans are nimble and can evolve quickly
If your plans look the same as they did 10 years ago, then they probably won’t meet current requirements. Organisations engaged in business continuity management will be actively learning from their internal audits, tests, management reviews and even from incidents themselves.
9. Make sure you’re not just ‘box-ticking’
Plans which get the tick against the ‘to do’ list but don’t actually reflect the organisation’s strategy and objectives can lack credibility and are unlikely to succeed in the long-term. Instead, make sure your plans allow you to get back up and running in a way that aligns with your organisation’s objectives.
10. Get insurance!
Unexpected disruption can have a huge cost to business, so insure your organization against worst-case scenarios. For example, employer’s liability insurance is a legal requirement in the UK and can help pay for medical treatment and compensate employees in the event of a crisis.
If an unexpected crisis in your supply chain hits your business, it need not spell the end of your company.
Put communication plans in place, so that once the situation has been assessed, a nominated senior spokesperson can communicate a strong message to your stakeholders. Reinforcing the confidence in your organisation’s ability to recover is half the battle.
Suzanne Fribbins is EMEA risk product manager at BSI.