Risk and supply chains have become hot topics in recent weeks. With newspaper column inches, radio airtime and TV news shows all now talking about the impact of Covid-19 on supply chains and what this might means for businesses, their customers and the economy as a whole
Breaking through the noise.
What is important to remember is that supply chains are no more complex this week than they have been for the last few decades and that is highly complex. Some of you will know the Thomas Friedman book “The World is Flat”; I had my "world is flat" moment several years ago during a conference call between a design centre in the US and a customer in Germany. What struck me on that call was that I was the supply chain guy and I was sitting in a coffee shop in Shenzhen, China.
The topic of that call was risk mitigation. Our customer’s expectation - being in the automotive industry - was that we would have ‘Just in Time’ manufacturing. They wanted this regardless of whether we were manufacturing in China or on their doorstep. For the customer, the product needed to be on dock as and when required.
The discussion on the call was about earthquakes and typhoons, connectivity and virus prevention. We congratulated ourselves on a job well done, safe in the belief that if an earthquake hit we would be back up and running in a short period of time in temporary accommodation. We also knew that the probability likelihood of an earthquake in that region was extremely low.
However shortly after this trade tensions developed between the US and China which forced us to look again at the plan. We realised very quickly that risk was elastic and, therefore, risk management plans needed to be elastic also. Dust should never be allowed settle on a risk management plan.
Armed with this new perspective, a systematic approach to Business Impact Assessment was developed. A process of measuring risk across the extended supply chain and taking appropriate, measured steps to managing those risks. Since then, I have brought these learnings and skills to a variety of organisations across a range of sectors and geographies through our Business Impact Assessment Plan. Together with my colleagues at 3SIXTY, we have used this plan to support our clients develop their capabilities and capacities to deliver efficiencies and drive growth. We have also used it help our clients predict and respond to potential risks in their supply chains thus saving them money, hassle, disgruntled customers, damage to their brand image and in some cases closure.
Fear not (but for the sake of your business please take action), help is at hand……
In this time of Coronavirus (or Brexit or trade tariff standoffs or natural disasters or IT outages or [insert name of latest global threat here) senior executives and business owners need to start by asking some questions
- Do we have a full Business Impact Assessment? If so, how up-to-date is it?
we assessed the end-to-end impact, from our customer’s customer to our supplier’s
supplier? Where are the areas of
weakness? Do we know how to mitigate these risks?
our response plan? Do we have an early warning communication plan? Who is
communicating, what is being communicated and with whom? Do we have a team with
the appropriate skills necessary to effect change in the short term? Have we
brought in external expertise to support us and our team?
we have back-up plans built into our supply chain? Do we have multiple sources
of supply (of products, services, systems)? Can we switch capacity between
suppliers in different geographic regions?
we differentiate between what is “mission critical” for our customers and our
If you have answered ‘no’ to any of these questions, not to worry, it is not too late to start. Now in its 7th generation, the 3SIXTY Business Impact Assessment plan assesses all aspects of your business, from the traditional “facilities”, to how your people will work through an impact, your supply chain, the impact to customers and your financial modelling. 3SIXTY can support your business in either getting started on this journey, in taking the next step in the process or conducting the assessment for you.
Communication is key.
Communication is a key deliverable of an effective Business Impact Assessment plan. The plan will identify what level of communication is necessary. A proper Business Impact Assessment plan will identify how communications should be tailored to ensure the appropriate message is delivered
From our experience, a key piece of advice in situations where risk is imminent is to remember that Communication is your ally. As Bob Hoskins once said, “it is good to talk”. Lines of communication need to be kept open. The right people need to be sharing the right messages at the right times with the right audiences.
The 3SIXTY team are experts in Supply Chain Optimisation, Process Excellence and Change Management. We have worked with clients from large MNCs to smaller, indigenous companies and supported them in appropriately planning for risk events through our Business Impact Assessment methodology. Contact us to arrange a call to find out more about how we can support you and your business.
You can get in touch here on LinkedIn or send us an email - hello@your3SIXTY.ie