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Were Manufacturers Ready For This Crisis?

Manufacturers resilience incident management

This article was originally published in 2017 and has been adapted for COVID19 in 2020.

In the 2 years leading up to COVID-19, 80% of organisations surveyed in New Zealand had been subject to a disruptive incident due to unplanned IT and communications outages, adverse weather, and outsourced service failures. These unexpected incidents caused devastating consequences with 55% reporting a major loss in productivity and 5% claiming losses of $15 million or more in revenue.

This has of course been smothered by the world’s current health crisis.

When you are part of a large organisation that employs people on the ground, runs major IT operations, and supports and service external stakeholders, you have a moral, and legal, obligation to remain resilient and prepared with tried and test plans.

Here are some considerations on how to revisit your resilience journey during a major crisis event.

What have others done?

Recently, RiskLogic made its way to Bengaluru, India where we worked with our client on an introductory course on Incident Management and Emergency Response. During the training, we identified some of their threats being things like power cuts, loss of IT (or cyber attack), loss of skilled staff, flooding, and breakdowns of critical equipment; quite a lot of risks.

Our client at the time found themselves in the position to review their resilience capability off the back of a contractual requirement from their largest client. What this also highlighted to them was how deep they needed to investigate their supply chain which continuously showcased vulnerabilities.

The need to do this couldn’t have come at more impeccable timing.

Similarly, Risklogic has worked with other manufacturers throughout Australia and New Zealand, in particular, a well-known coffee and food manufacturer who also have recently felt the disruption a breakdown in critical third-party supplies can have. Southern-based, the Kaikoura earthquakes could have been the end for the organisation’s New Zealand arm, but they sought support from their wider teams in Australia. They actioned a plan RiskLogic had put in place for them and were able to bring in supplies by sea. Most of all, however, they remained calm and kept communication strong.

Repeating this exact response during COVID-19 helped them keep up production in 2020, too.

The lesson here is to ask whether you’ve looked into supply-chain and when they last practiced their plans? Do they align with yours? In this current crisis, it’s more acceptable than ever to ask.

Why carpet is a great case study today

It’s not a matter of if, but when.

 

RiskLogic has run over 200 training and exercises over the last two years for our clients. These sessions frequently started with the questions, “What do you think is the most likely event to hit New Zealand this year?” Earthquakes was historically common in the south, while weather or cyber frequently appeared in the north. Supply-chain is seldom brought up.

If an earthquake hits the South Island, you’ll know pretty quickly if key routes north and south are affected. What about if it hits Central Asia, or even Central America? How far does your supply chain reach and how quick are you identifying the issue?

Let’s take carpet for an example where New Zealand gets up to 68% of its supply from Asia.

This is a real issue here in New Zealand. Currently, there is a serious lack of carpet for new builds. This is a direct result of COVID-19 supply-chain issues. Without carpet being delivered into the country due to a backlog of orders, houses cannot get signed off, meaning builders are not paid and some people are in limbo to moving into their homes.

For builders or resellers, this is a classic case of are you the victim of this disruption or the culprit? It doesn’t matter in this case, an element of the supply-chain arm has crashed, exposing other vulnerabilities.

How to take immediate action

Business Continuity, by definition, is about minimizing the impacts of an unexpected disruption. So what can you do now to check the resilience capabilities of your organisation? As a basic starting point, ask your third-party suppliers the following questions:

Business Impact Analysts:

  • Have all business continuity threats to your organisation been assessed and rated using a recognised methodology off the back of COVID?
  • Have your critical business functions been prioritised by recovery timeframes and resource requirements?

Business Continuity Planning:

  • Do your Business Continuity Plans cover all functions of the organisation?
  • Are your Business Continuity Plans up-to-date? (i.e. updated in last 6 months)

Incident and Crisis Management:

  • Do you have an emergency framework in place that complies with AS3745?
  • Are your Emergency Management considerations linked to your Business Continuity arrangements?

IT Disaster Recovery:

  • Is there an appropriate IT strategy for system downtime?
  • Are all critical resources and technologies covered by the DRP?

Training and Testing:

  • Have all staff been trained in basic Business Continuity principles?
  • Has testing covered all business functions and confirmed the availability of all critical resources?

Asking these, and many more, questions should provide you with peace of mind that your supply chain is resilient, contributing to confidence during an event or crisis. Send them an email today with the above questions.

How to get started

RiskLogic provides a leading suppliers review where we’ll break down, analyse, and provide high-level feedback on what we suggest. This is a great, affordable way to decide whether outsourcing your Business Continuity Program is worth investing in off the back of COVID.

By going through an Evaluation Checklist, you are going to start building credible questions that you should be asking your supply chain and stakeholders around their resilience. Once you’ve achieved this, you’ll know where to start. But, the most important thing is asking those questions in the first place.

If you would like more information on the Critical Vendor Suppliers Review and how you can implement it, click on the link below to contact us. We’ll chat with you about the most effective way to start this journey and support you when necessary.

Contact us now to get started. 

Until then, plan, do, check and act…

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