BUSINESS IMPROVEMENT JANUARY 2019
CRITICAL THINKING
Managers should consider the benefits of Business Continuity
Planning to build confidence throughout their organisation
BY ADAM BERNSTEIN
Charles Darwin once said that “it is
not the strongest of the species that
survives, nor the most intelligent that
survives. It is the one that is the most
adaptable to change.” While his views
are usually applied to nature, his point
is well made and most certainly also applies to
the world of business.
Change comes in many forms. Developments
and disruptive technologies; changing economic,
political and legislative landscapes; the
interaction of individuals and business outcomes.
But just as these influence the prosperity of a
business, so disasters, especially those that are
unplanned, can fell a business.
Fire, flood, IT failure, personnel matters and
even nuclear catastrophe, as well as internal
issues relating to public affairs and HR, can
be utterly destructive and strike at the most
inopportune of times.
Management discipline with benefits
John Robinson, managing director of INONI
Limited, a business continuity consultancy,
says that Business Continuity Planning (BCP)
is a management discipline that sits alongside
others such as risk, compliance, and information
security. “It is not generally viewed as a bottomline
contributor but has an important part to
play in establishing capability, trust and
confidence in your business.”
BCP sits alongside insurance, with Robinson
noting that it “works for manufacturers, many
of whom suppose it to have little relevance,
who then ask ‘how can a paper plan recover
a production facility whose
components have six to 12
months’ order lead time?’”
To detractors, his response
is that BCP equips a firm to
answer the deluge of questions
posed during a crisis, but in
relative comfort. It puts firms
in control, buys time and builds
business confidence.
To work well, BCP needs
three things: continual
top-level backing, an owner
and a budget. In its simplest
form, it manages exposure to
continuity-threatening events.
Says Robinson: “it’s much like
life insurance; whilst you hope
never to use it, BCP assures
shareholders and trustees,
regulators, insurers, prospective
and live customers, suppliers
and employees. It makes them
happy to invest in you.”
And Jamie MacKillop, risk
specialist at Scotch whisky
producer Chivas Brothers,
agrees. “For the manufacturing
sector it’s very simple,” he
explains. “If you can’t provide
your product to the end
consumer, they aren’t going to
sit around and wait for you to
sort yourself out; one of your
competitors will be happy to
provide them an alternative.”
Practically speaking, BCP
in a disruption situation can
save lives and livelihoods, helps
avoid knee-jerk reactions, buys
time, reduces error, simplifies
the chain of command, and can
keep customers on-side.
But in times of normalcy,
BCP develops capability,
so people know what to do
when called on; builds in
organisational resilience;
inspires customer confidence;
builds confidence of investors
and suppliers alike; and can
ensure supply chain security
and order fulfilment.
Lack of true commitment
As Robinson sees it,
“manufacturers are generally
aware of the risks they take and
insure against them to a level
they think will compensate
them if things go badly wrong.
However, I would say that
only a minority truly embrace
BCP and grasp its true value.”
He also says that those that
do, tend to be driven toward
it by “diligent insurers, and
increasingly, customers.”
He adds that “the best
manufacturing BCPs work
hand-in-glove with Business
Interruption (BI) insurance.
This pays out against an agreed
profit projection for maybe
12, 18 or 24 months following
a potentially catastrophic
incident, and delivers the
profit you would have received
had no incident occurred.”
Fundamentally, BI takes away
the financial pressure and
allows the plant to be rebuilt.
But even with good BI cover,
unless a firm knows what to
do – has prepared the ground,
documented strategies, sourced
BCP is a valuable
management
discipline, says
INONI’s John
Robinson (above)
36 www.manufacturingmanagement.co.uk
/www.manufacturingmanagement.co.uk