Fierce competition is the name of the game in manufacturing today.
The expansion and exploitation of global markets, advances in digital
technologies, and process improvement opportunities both domestically
and abroad, are increasing the complexity and risks associated with
manufacturing products. As manufacturers are forced to respond to
these changes, they are becoming more and more dependent on complex
information technology systems, single and highly integrated suppliers,
the operability of fewer and larger plants, automated back-office
support functions, and critical function outsourcing.
With these revolutionary changes, the ability to prevent a major
interruption and to limit the loss potential is of paramount concern.
Without the implementation of the appropriate procedures, corporations
play Russian Roulette every business day. The ability to respond
to and recover from a major system collapse or interruption is essential,
for the cost of recovery might be too high to bear. It is vital
manufacturing companies deploy business continuity solutions across
the entire enterprise, including supplier and customer networks,
to ensure the recovery of its business processes within a timeframe
that is consistent with the needs of the business.
Gone are the days of localized manufacturing and production facilities
with limited distribution channels. Instead, manufacturing companies
are operating with highly complex, integrated production and marketing
systems in a networked, collaborative environment linking large
numbers of customers and suppliers. This effort is providing real-time
synergies between internal and external business operations. In
turn, there is dramatic improvement in cycle times and in the synchronization
of members of the value chain. These performance benefits are most
pronounced in the areas of lean manufacturing, e-commerce, enterprise-wide
financial and inventory software deployments, concurrent manufacturing
techniques, B2B exchanges, and supply chain management.
But the above-mentioned factors have also led to the inability
to segregate manufacturing risk and reduce threat through traditional
means (e.g., separation and duplication of facilities or processes).
As a result, manufacturers have increased their exposure to traditional
threats and have opened the door to new and highly complicated risk
factors. Given the occurrence and volatility of change, the exposures
to business interruption and the potential for time element losses
within the manufacturing environment are ever-widening. Some of
the specific risk factors impacting the manufacturing industry today
include:
• Dependency and reliance upon the adequacy of the public
infrastructure of newly and emerging industrialized countries in
Southeast Asia, Eastern Europe and Latin America
• The need to maintain 100% up-time of communication networks
to ensure enterprise management systems connectivity
• Increased emphasis on raw material staging and inventory
management capabilities to support Just-In-Time manufacturing
• The potential impact of a severe loss caused by sole suppliers
in order to maintain thin margins and production timeframes
• Highly localized and integrated manufacturing facilities
increasing the concentration of property values and exposures for
the manufacturer and supplier
• The lack of flexibility and increased dependency resulting
from the outsourcing of key back-office support functions
• The need to maintain reliable and accountable operating procedures
given the transparent governance structures of foreign suppliers
and partners
• The importance of maintaining robust Knowledge Management
systems promoting integration of people, tools and processes
• The need to quickly respond to processing bottlenecks and
functional interdependencies
• The need to prioritize vulnerabilities based on interruption
impacts and tolerance levels
The good news is manufacturing advancements continue to bring about
positive changes relative to overall manufacturer productivity and
in the integration of all members of the value chain on a global
scale. The bad news is that as manufacturer's dependence upon technology
continues to intensify and evolve, the issue of availability - and
its potential to alter the fate of an entire manufacturing concern
- becomes vital. Through the development of business continuity
procedures and the implementation of recovery standards across all
members of the value chain, businesses are much more likely to avert
the implications associated with the threat of failure.
As the laundry list of failure points grows, the issue is not whether
a failure will occur - it is whether your organization has the ability
to limit the failure's implications and the negative impact to the
business. Only through formal, documented, and communicated business
continuity strategies may your business be protected and the risk
of the threat mitigated. Only through the development of a robust
continuance capability is it possible to circumvent the threat and
help ensure your organization's survival.
About the Author
Rob Quaranto is a member of the GE GAP Services'
Business Continuity Solutions team. He may be reached by calling
(216) 241-3493 or emailing Rob.Quaranto@gegapservices.com
The Business Continuity Yardstick:
How do You Measure Up?
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Get a basic sense of where you sit on the business continuity
maturity spectrum. Measure the characteristics of your organization
against those traits commonly shared by companies having sound
business continuity management programs.
• A formal organization has been chartered, assigned
accountability and responsibility for enterprise-wide business
continuity management.
• A comprehensive organization-wide business continuity
management process has been developed and takes into account
the type, nature and likelihood of various risk scenarios,
mission critical business processes, minimal acceptable down-time,
and strategies to restore these processes to an acceptable
service level.
• The organization has a viable business resumption
and disaster recovery plan in place that falls under the purview
of a corporate business continuity plan.
• Risk analysis and business impact analysis documentation
exist and are frequently updated by the organization.
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• Processes are in place to regularly test continuity
procedures to ensure they are responsive to mission-critical
business function needs.
• Automated tools are used to communicate and maintain
the business continuity plan. It is integrated into the overall
business process with automatic plan updates.
• Data back-up and recovery processes have been fully
automated (e.g. no human intervention) for all critical business
processes and current backup media has been properly stored
off-site.
• Training and awareness plans and schedules are executed.
All personnel are aware of recovery plan provisions, key personnel,
and roles and responsibilities during a business interruption.
• Proactive human factors and considerations have been
made for employees and their families. Key considerations
are public communications practices, crisis counseling, family
emergency response plans, and family support networks.
• Metrics are collected and managed to ensure that continuity-related
recovery objectives and service level agreements are met after
the plan has been activated.
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