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Supply Chain Business Continuity: Have you Planned for Disruptions?

Posted on Thu, Jun 25, 2015

Weather, natural disasters, and other uncontrollable events can interrupt transportation flow and your supply chain – anytime, anywhere, and with little warning. - FedEx.com service alert

In January and February of 2015, blizzards, ice, and frigid cold temperatures targeted the eastern half of the United States. The deluge of extreme weather brought residents, cities, and supply chains to their knees. Meanwhile on the west coast, labor disputes between the International Longshore and Warehouse Union and the Pacific Maritime Association created the partial closure of 29 ports. The Port of Oakland experienced a 39% drop in cargo imports because of the circumstances (Wall Street Journal). The trucking and railroad industries lost valuable time and money, and customers experienced delayed delivery of tons of expected goods. The ripple effect of delayed shipments forced many customers to stockpile goods when available, and alter contracted shipping means when time sensitive goods were required.

Ensuring ample supplies in the midst of an incident can be challenging, especially when external forces create delays. Supply continuity and preparedness efforts are becoming more important as more companies depend on world-wide suppliers. These recent major supply disruptions, both on the east and west coasts, emphasize the need to develop business continuity plans (BCPs) that identify primary and secondary suppliers and alternate resources. By identifying and contracting with vendors and alternate suppliers prior to an incident, a company improves its ability to quickly and successfully respond to unforeseen disruptions.

Pre-emptive identification and mitigation efforts are crucial to preventing supply chain interruptions and costly consequences. Factors to consider in the identification of critical suppliers are complex and extend well beyond first glance analyses. While suppliers of material goods and business-specific products may be critical to business practices, suppliers may also include those that provide the following services, utilities, or infrastructures:

  • Sole source services
  • Electrical power
  • Water
  • Fuel
  • Telecommunications
  • Transportation
  • Staffing
  • Waste Management
  • Facilities

Companies should utilize BCPs to prepare for incidents that could impair or impede the ability to operate as a result of a temporary or permanent loss of required supplies, equipment, critical staff, data, and necessary infrastructure. A BCP can help minimize or counteract many of the potential impacts of a supply interruption or set procedures in motion that limit the effects on operations.

Identification of risks and business impact analyses (BIA) should be performed for critical supply chains as part of the development of BCPs. For common disruptions, inept supplier performance, required resources forecasting errors, and transportation and delivery breakdowns, companies can typically utilize historical data to quantify the level of risk and necessary response effort. However, when extraordinary events impact the supply chain, such as the east and west coast incidents, companies may encounter atypical and domino effect impacts. Continuity plans with supply chain response measure must be in place to mitigate the disruption, sustain operations, and restore “business as usual”.  The following supply chain related questions, while not all-inclusive, can be used as response planning discussion points to identify necessary supply-related business continuity and response elements:

  • How would a potential critical material supply disruption affect both internal and external resources?
  • Have critical supplies, interdependencies, and potential bottleneck scenarios been identified?
  • Have critical materials and response equipment needs, minimum levels, and recovery time limits been evaluated and defined?
  • Are processes in place to monitor internal and external supply chains that identify potential delivery disruption?
  • Have back up suppliers been identified and communicated with?
  • Are memorandum of understandings (MOUs) for services, and equipment or supply contracts been established and/or up-to-date?
  • Do business continuity initiation procedures encompass verified primary and secondary supply chain contacts?
  • Is there historical data that indicates potential impacts and durations that can be used for planning?
  • Are “Best Practices” supply chain continuity procedures available from like-companies and industry experts?
  • Do critical suppliers have alternate processes and delivery methods in case an event affects their operations?
  • Have supply disruption scenarios been included in emergency response and business continuity exercises?
  • Are employees trained in the event of supply disruption?
  • Have mitigation measures been examined and implemented based on BIAs?

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Tags: BCM Standards, Business Continuity key points, Business Continuity Plan, Business Disruption, Mitigation

Incorporating Business Continuity into Industrial Settings

Posted on Thu, Aug 21, 2014

As complex, advanced technologies, systems, and networks become ingrained in industrial operations and processes, the potential impacts from even minor disruptions increases. Industrial companies that prepare for a large variety of disruptions can limit its impact on business processes and accelerate the return to normal operations. For those not prepared, a targeted incident can become an escalated situation, negatively affecting profitability, customer relationships, and overall business performance. Business continuity plans (BCP) are crucial to ensure long-term viability, yet many industrial companies do not prioritize them.

Many business continuity issues can start as minor, isolated instances or aggravating inconveniences. However, if not addressed in a timely manner, incidents can escalate, potentially spreading to other key processes. With an effective BCP, mitigation measures, and proper employee training, potential disruptions and operational impacting events can be prevented.

Regardless of the size of your enterprise or scope of facility operations, industrial locations should have the following continuity elements in place.

  • Standard procedures and assigned responsibilities regarding risk management, restoration, and IT recovery for each critical business area.
  • A BIA (Business Impact Analysis)
  • A risk assessment that identifies and prioritizes operational imposing scenarios
  • Recovery Time Objectives (RTOs) based on cost-benefit analyses and BIAs
  • Documented BCP with response, recovery, and restoration procedures
  • BCP exercises aimed at improving RTOs and strategies by ensuring plans are accurate, actionable, and thorough
  • Audits that test corporate-level standardization and policy implementations
  • BCP training for managers and employees

The process of developing a BCP can identify continuity weaknesses within an enterprise and at specific facilities, as well as lapses within individual responsibility and operational processes. To strengthen the prospects of corporate viability, planning and training should include detailed standard operating procedures for BCP activation and address RTOs for each key business process. The BCP should offer procedural flexibility based on real-time situational assessment, as well as procedural variations for each scenario. Precise, site-specific, and accurate BCPs in conjunction with effective training and carefully planned exercises can often counteract a lack of general continuity awareness.

Many industrial facilities managers typically have expertise in proper hazard communications and emergency response techniques. However, industrial facility managers and their employees may lack business continuity experience and necessary expertise. If establishing BCPs or initiating continuity efforts are beyond the scope of managers, companies should consider hiring consultants who specialize in business continuity planning.

Employees who are trained in daily continuity procedures, in addition to response and restorative continuity methods will be better prepared in the event of a business-interrupting incident. By incorporating business continuity training, companies can expand their resilience strategies while minimizing risks to their employees, operations, reputation, and the financial bottom line.

BCP training should include a detailed account of specific roles and responsibilities. This will ensure continuity of knowledge among participants, enterprise-wide standard operating procedures, and site-specific business continuity processes. Companies should also be vigilant in training new hires, as well as be receptive to unique business continuity lesson learned that can be used to strengthen the BCP.

Although all companies should prepared for inevitable business disruptions, industrial facilities typically have heightened levels of vulnerabilities. In an industrial setting, hazards are often identified in order for potential impacts to be fully analyzed and countermeasures to be implemented. For business continuity strategies, a business impact analysis (BIA) can identify, quantify, and qualify the impacts in time of a loss, interruption or disruption of business activities on an organization, and provides the data from which appropriate continuity strategies can be determined.  

Whether business disruptions stem from technological, man-made, or natural disasters, business continuity plans can be a valuable tool for protecting viability, securing resources, and maintaining customer relationships.

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Tags: BCM Standards, Business Continuity, Resiliency, Training and Exercises, Business Continuity Plan, Business Disruption

7 Key Points for Industrial Business Continuity and Disaster Recovery

Posted on Thu, Aug 14, 2014

Process and procedural effectiveness and efficiency are key elements in determining a company’s success. Critically detailed reviews, evaluations, and improvements to your processes and procedures can contribute to overall corporate viability and profitability. Process and procedural effectiveness and efficiency are also critical when it comes to developing and implementing business continuity plans.

The goal of business continuity planning is to efficiently restore operations through a predetermined, systematic approach. Unfortunately, many companies lack adequate recovery planning, and recuperative procedures to restore critical information, essential processes, and normal business operations within an acceptable recovery time frame. The lack of business continuity preparedness can adversely affect corporate reputation, financial stability, and overall resilience.

The business continuity recovery process is typically a sequence of concurrent activities and interdependent activities that facilitate measured advances toward a successful recovery. Decisions and priorities set early in the recovery process often have a cascading effect on the evolution and speed of the recovery progress and business continuity efforts. Because recovery timeliness has a direct impact on operational viability, pre-planning business continuity implementation processes and intended procedures is critical.

Developing relationships and common understandings of roles and responsibilities prior to a disaster increases post-disaster collaboration and unified decision-making, and streamlines the recovery process. A fully coordinated recovery plan may require utilizing internal and external stakeholders. Business unit management and staff, in conjunction with external participants, must be familiar with and trained in the recovery procedures in order to effectively implement directives and maintain minimal business continuity.

Recovery time and outcomes vary based on incident circumstances, challenges, and priorities. A successful disaster recovery can be characterized as the return of operations to pre-disaster conditions. FEMA’s National Disaster Recovery Framework provides key factors that contribute to a successful recovery.  With secured sharing abilities, a web-based, database driven planning system can aid in the management and communication of the key factors of a business continuity recovery process. These factors include:

1. Effective Decision-making and Coordination:

  • Confirm roles and responsibilities of recovery team and stakeholders
  • Examine recovery alternatives, address conflicts and make informed and timely decisions that best achieve recovery
  • Establish metrics for tracking progress, ensuring accountability and reinforcing realistic expectations among stakeholders
  • Track progress, ensure accountability, and make procedural adjustments as necessary

2. Integration of Community Recovery Planning Processes:

  • Engage all stakeholders in pre-disaster business continuity and recovery planning, training, and exercises
  • Establish processes and criteria for identifying and prioritizing key recovery actions and projects

3. Well-managed Recovery:

  • Leverage and coordinate recovery teams, local response groups, government liaisons, and non-governmental organizations to accelerate the recovery process and avoid duplication of efforts
  • Surge staffing and management structures as necessary to support the workload during recovery
  • Establish leadership guidance, including the shift of roles and responsibilities, for the transition from response operations to recovery, and eventually a return to a normal (or new normal) operational state
  • Ensure regulatory compliance throughout recovery process

4. Proactive Community Partnerships, Public Participation, and Public Awareness:

  • Ensure transparency and accountability
  • Communicate recovery objectives (short, intermediate and long-term) and applicable detailed information to employees, stakeholders, and community members

5. Well-administered Financials:

  • Clearly identify funding sources and financial recovery processes
  • Evaluate and present external programs that can provide financial assistance to aid in the recovery progress
  • Allow for budgetary flexibility, yet maintain adequate financial monitoring and accounting systems
  • Implement processes and systems that detect and deter fraud, waste, and abuse.

6. Organizational Flexibility:

  • Institute scalable and flexible processes that can align with recovery operations objectives
  • Institute business processes that can evolve and adapt to address the changing landscape of post-disaster environments

7. Resilient Rebuilding:

  • Invoke “Lessons Learned” in the restoration phase to minimize risks and threats, and improve response, recovery and restoration efforts. 

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Tags: Business Continuity key points, Business Continuity, Business Continuity Plan, Disaster Recovery, Disaster Response, Business Disruption

Oil and Gas: Combating Common Business Continuity Obstacles

Posted on Thu, Jul 24, 2014

A well-developed Business Continuity Plan (BCP) can minimize escalating business disruptions, while safeguarding key business interests, relationships, and assets. Unfortunately, many companies do not acknowledge the value of a BCP and fail to prioritize sustainability. This many be especially true of highly regulated industries, such the oil and gas industry, that prioritize mandated compliance measures.

Below are common obstacles in business continuity planning and possible countermeasures to offset these hurdles.

Lack of management support

It is challenging to perform a cost-benefit analysis that measures the benefits of business continuity. There is a high degree of uncertainty associated with implementing BCP measures. Benefits resulting from BCP and mitigation efforts are dynamic in nature, and are not limited to a single structure, department, or operation.

The financial benefits from a BCP implementation must be viewed from the long-term perspective.  A BCP can dramatically lessen the financial impact of future crises and promote operational sustainability and corporate viability. However, managers and corporate executives typically do not act based on “what if” scenarios unless regulations require implementation. Managerial actions are generally based on concrete financials that benefit departments, stockholders, and the bottom line.  

Countermeasure:2014 Global Risks Report2014 Global Risks Report by The World Economic Forum, makes a compelling case that may provoke and inspires leaders to implement continuity efforts.

Budget restraints

Because companies are in the business of making a profit, business continuity planning budgets are often compromised for other priorities.

Countermeasure: It may be helpful to estimate the cost of implementation for each critical process in relation to the cost of a critical process breakdown.  This exercise may highlight the need for a designated business continuity budget.

It may also be necessary to prioritize BCP implementation by each critical process with a step-by-step timeline for completion. Companies can identify and rank the most critical business processes, and implement BCP and mitigation measures based on those priorities. While most processes are intertwined, taking small steps to ensure process continuity is a step toward overall business continuity. Managers may be more likely to implement a BCP if it can be initiated over time.

Maintaining a culture of preparedness

Unless a company has experienced an eye-opening business continuity issue, the presence of a realistic, tangible threat may be the only protagonist to champion a culture of preparedness.

Countermeasure: Managers who emphasize, embrace, and enact safety and continuity measures, as part of standard operating procedures will create a work environment that reflects the guiding principles preparedness. As preparedness measures and best practices are ingrained in operational processes, personnel will be more apt to embrace the culture

Lack of business continuity awareness and training

When identifying company, operational, and process vulnerabilities, managers and employees frequently recognize the limits of their business continuity expertise. Oil and gas management and employees may have expertise in hazardous response planning measures and tactics, however their business continuity experience may be limited. The process of identifying business continuity mitigation opportunities, developing recovery processes, and training personnel in continuity roles and responsibilities often requires experience. Companies often disregard business continuity training and awareness as a result of ineptitude.

Countermeasure: If implementing continuity efforts are beyond the scope of managers, companies should consider hiring consultants who specialize in business continuity planning. External resources can address site-specific business continuity needs, detailed standard operating procedures for BCP activation, and personnel training. Training should convey procedural flexibility based on continuing assessment of disaster demands and provide options for each scenario. Companies can also assign a designated manager to become proficiently trained in business continuity in order to pass down preparedness guidelines and best practices.

Identifying critical processes:

Many mid to large sized companies often operate with separate, independent business units (or departments). Each critical business process within each unit must be identified and quantified in order to determine its role in the business continuity planning process. Most business unit processes are often intertwined with other critical functions, contributing to the overall profitability of a company. When critical business processes are not functional, a company’s ability to operate and reputation may be in jeopardy.

Countermeasures: Overall resilience capabilities should be prioritized to mitigate any interruption. Understanding response procedures, the interconnected structure of processes between units, and the intricacies of a “Plan B” can make the difference between corporate survival or failure. Crisis and disaster situations usually result in the loss or temporary disruption of one or more of the following necessary key business resources:

  • Facilities
  • Infrastructure
  • IT Applications/Systems
  • People
  • Supply Chain

 Unidentified threats and vulnerabilities:  

Threats and vulnerabilities must be identified in order for potential impacts to be analyzed and countermeasures to be implemented. Identification can be complicated by the continuing evolving nature of potential threats and vulnerabilities. Threats and vulnerabilities can stem from both external and internal actions. New technologies, best practices, and mitigation efforts can often minimize threats. However, as operations evolve and new concepts are introduced, additional threats and vulnerabilities can emerge.

Countermeasures: An annual risk and hazard analysis can identify potential undiscovered threats and vulnerabilities relating to business continuity. This analysis indicates the likeliness that specific threats that could occur, considering existing site-specific factors, capabilities, mitigation measures, and history. Companies should analyze potential continuity threats from typical weather patterns, geographical influences, security efforts, inherent operational hazards, as well as facility design and potential maintenance issues.

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Tags: Business Continuity, Resiliency, Facility Management, Emergency Management Program, Business Continuity Plan, Business Disruption

Securing Critical Business Functions Through BC Preparedness Planning

Posted on Mon, Feb 24, 2014

Human nature is such that we go about our days under the impression that disasters will never happen to us. As a result, preparedness is often low on the list of priorities. Beneficial uncertainty, financial strain, and daily workloads leave many companies without a sustainable and actionable business continuity plan (BCP).

The 24/7 news bombardments of impending doom and heart wrenching disasters continually emphasizes the need for a BCP, despite its high degree of beneficial uncertainty associated with implementation. Unless regulations require implementation, business practices are not typically based on “what if” scenarios. To add to the complexity, performing a cost-benefit analysis for business continuity is challenging. Managerial decisions are generally based on concrete financials that benefit departments, stockholders, and profitability. Benefits resulting from BCP and mitigation efforts are dynamic in nature, and are not limited to a single structure, department, or operation.

However, nearly every company relies on the following essential functions and/or resources for productivity and profitability:

  • Leadership
  • Staff
  • Communications/Technology
  • Infrastructure

If one or more of these essential functions and/or resources fails, companies must have alternative processes in order to remain functional.  When the disruptions or failures are extended over hours, days, or weeks, a company's general viability is at risk.

Awareness has made it evident that business continuity plans are crucial to insure long-term viability. Companies that prepare for disruptions limit their impact on the overall business processes and accelerate the return to normal business operations.  For those not prepared, the situation can negatively affected profitability, customer relationships, and overall business performance.

Most C-level executives’ role is to support and protect company assets.  Implementing a BCP with key details and alternate provisional elements can better ensure that a company will survive any type of disruption or disaster. The following elements can be used as a basic outline for a BCP.

1. Plan distribution list: Names, addresses, and contact information of those that retain access to business continuity plan.

2. Key contacts: Identify all primary and secondary contacts that must be made aware of the business interruption. It is important to routinely verify contact information for accuracy.

3. Key Staff Roles and Responsibilities: Job specific checklists and procedures detailing responsibilities from business continuity implementation through recovery. Task teams should be formed, at a minimum, to cover each essential business process. It may be necessary to provide cross team training and provide extended knowledge in case primary team members are not available.

4. Off-site recovery location: Include address, contact info, available on-site equipment, and any necessary external equipment for effective operations.

5. Recovery Action Plan: Incremental processes and procedures necessary for each critical business process to meet goals. Checklists  may be developed in increments such as, 1st hour, 24-hour, 48-hour, one week, one month, and long-term recovery.

6. Key customers’ data:  Identify communication methods and necessary contact information in order to inform customers of disruptions of deliverables. Effective customer relations and communication may be critical in retaining clients and maintaining positive relationships during a business interruption.

7. Key supplier contact list: Dependencies and interdependencies should be identified and contact information confirmed and detailed. Transportation delays could affect delivery times. Plan  mitigate, and communicate accordingly.

8. Alternate suppliers list: The consequences of a supply chain failure on associated key business components can be crippling to productivity. Through the planning process, alternate suppliers should be explored to reduce the impact of supply chain disruptions.

9. Insurance details: Identify details of insurance coverage and accurate contact information. The burden of proof when making claims typically lies with the policyholder. Accurate and detailed records of disruption are imperative.

10. Back-up data: Identify details of computer-back ups and the recovery methods.

11. Technology requirements: Identify necessary hardware and software, and the minimum recovery time requirements for each business unit.

12. Equipment requirements: Detail applicable equipment requirements for each business unit and recovery time goals.

13. Review log: Newly identified hazards and vulnerabilities should be incorporated into the business continuity plan. Log can include necessary equipment used (requiring replacement or replenishment), altered processes, and lessons learned.

 

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Hats, Gloves, and Business Continuity Planning

Posted on Thu, Feb 13, 2014

In January 2014, the meteorological term “Polar Vortex” was indoctrinated in the minds of millions across the United States. With arctic temperature plummeting unusually south, two-thirds of the nation was paralyzed by record breaking cold.  According to Evan Gold, Senior Vice President at Planalytics, a business weather intelligence company, January’s polar vortex resulted in a $50 billion economic disruption, the most delivered by a weather phenomenon since Superstorm Sandy in 2012.

Severe weather habitually effects routine business operations and profitability. Weather can be the culprit of power outages, dangerous temperatures, supply disruptions, safety hazards, and potentially impair access to key infrastructures. The January events, which impacted nearly 200 million people, is one of the many examples of how severe weather affects operational continuity.  Fortunately, temperatures will generally rise over the next few weeks and winter gear can be stored until next season. However, with every new season come new risks and the  need for an effective business continuity plan.

Despite seasonal specifics, companies should perform a business impact analysis (BIA), a precursor to a business continuity plan. The process of a BIA, in conjunction with a Business Continuity Plan allows for targeted recovery strategies to be developed in the event of an emergency. A BIA should be utilized to predict the consequences of business functions and process disruptions. Through a detailed analysis of potential lapses, predetermining applicable recovery strategies can reduce the length and severity of disruption impacts. These preparedness strategies allow for a smoother transition from critical business process disruptions to “business as usual”.

After each critical process is identified, the potential impacts resulting from loss of facilities, infrastructure, personnel, or supply chain can be examined for each process. Key minimum recovery components along with incremental recovery time objectives should be detailed for each critical process. Timely recovered critical processes reduce the overall potential damage to operations.

To identify the minimum service level requirements for specific key process, the following components should be evaluated for each critical business process.

  1. Recovery Time: Identify how long it would take to recover a specific critical process under scenario specific circumstances.
  2. IT requirements: If electronic data must be available to recover specific processes to a minimum service level, identify the necessary requirements.
  3. Data Backup History: Indicate how old the data can be to satisfy recovery (i.e. last weekly backup, last monthly backup, last quarterly backup, etc.) and review recovery methods.
  4. Review alternate location options: Identify needs and review options for off-site backup processes.
  5. Staffing minimums: Identify needs throughout recovery time objectives to optimize recovery.
  6. Impact Level: Indicate how severely the process would be impacted considering current/existing mitigation measures (ex. minimal, somewhat severe, severe).
  7. Likelihood Level: Indicating how likely each specific threat could occur considering current/ existing capabilities, mitigation measures, and history.

Once critical business units are identified and the BIA is completed, companies can develop a business continuity plan (BCP). For predictable naturally occurring events such as  severe weather, business continuity planning can minimize potentially dire financial impacts. Such planning should include, but not limited to the following:

  • Conduct awareness training, including facility evacuation routes and procedures
  • Coordinate activities with local and state response agencies
  • Communicate recommended community evacuation routes
  • Procure emergency supplies
  • Monitor radio and/or television reports
  • Secure facility
  • Secure and backup critical electronic files

Preparedness efforts, specific to winter weather, should include, but are not limited to the following:

  • Monitor news and weather reports on television or the radio (with battery backup)
  • Alert employees or others on-site that severe weather is approaching and communicate expectations
  • Be aware of the dangers posed extreme temperatures, and ice and snow falling from equipment and buildings; mediate if possible
  • Identify infrastructure dangers posed by cold weather on exposed piping (hazardous releases, flooding, etc)
  • Prepare and insulate exposed piping
  • Contract snow removal services or obtain the necessary equipment (snow shovels, ice scrapers, rock salt, tire chains, etc.)
  • Ensure that company vehicles have a full tank of gas and are functioning properly (heater, deicing fluid, antifreeze levels, windshield wipers)
  • Ensure flashlights are in proper working order and have additional batteries on site.
  • Monitor ice and snow accumulation on any on site tanks, sheds, or buildings and identify non-hazardous procedures for mitigation.
  • If necessary, obtain generators to re-power facilities or necessary equipment
  • If appropriate, leave water taps slightly open so they drip continuously to prevent pipes from freezing.
  • Understand and implement cold weather response techniques when responding to product spills as released product may flow under ice or snow.
  • Establish and maintain communication with personnel
  • Consider limiting vehicle traffic
  • Maintain building temperature at acceptable levels and understand safety measures if using space heaters.
  • Notify supervisors if facility(s) loses power or is otherwise unable to operate
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Tags: Climate Change, Business Continuity key points, Resiliency, Business Continuity Plan, Business Disruption

Response Planning Discussion Points: The Path to Preparedness

Posted on Mon, Feb 03, 2014

Through timely internal audits, facility assessments, attentive training and exercise programs, and best practices, response plans can be a working reflection of facility compliance and corporate preparedness. Necessary response documentation and plans established prior to an emergency allow for a comprehensive review of processes and procedures, and can result in an improved response to actual emergencies. The following questions, while not all-inclusive, can be used as planning discussion points to identify necessary response elements in order to develop or assess emergency response plans:

Compliance

  • What agencies and specific regulations apply to my location(s)?
  • If applicable, have material safety data sheets (MSDS) been updated and have their properties been included in the planning process?
  • Has an inspection taken place, and if so, have non-compliant issues been mitigated?
  • Will an internal compliance audit(s) be conducted?
  • Is personnel training up-to-date and compliant with site-specific requirements?

Risk Assessment

  • What are the current high-risk activities at the location?
  • Can high-risk tasks or conditions be mitigated? (The higher the probability and severity of risk, the higher the emphasis should be on corrective actions)
  • Have environmentally sensitive areas been identified and potential consequences been assessed?
  • Did risk assessment utilize realistic scenarios to define spill and release volumes and locations?
  • Are employees made aware of hazards associated with specific workplace process, materials, or location(s)?

Supply Chain

  • Are processes in place to monitor internal and external supply chains?
  • Is external spill response support necessary and available?
  • Have response equipment needs been evaluated and defined?
  • How would a potential spill affect both internal and external resources?
  • Have back up suppliers been identified and communicated with?

Training

  • Are personnel appropriately trained for their allocated roles?
  • Have the plans been thoroughly exercised with realistic scenarios that test training comprehension?
  • Is the response management team structure clear and able to be communicated?
  • Are external responders included in plan preparations, exercises, and distribution of the plans prior to an emergency?
  • Are exercises utilized to identify effective efforts and inefficiencies in response to ever-changing and site-specific scenarios?
  • Does training include documenting and communicating response actions, management decision, and tracking of resources?

Response Elements

  • Are clear procedures in place to notify, assess, and initiate a response?
  • Are individual responders and their contact information verified for accuracy?
  • Can approved stakeholders easily access response plans?
  • Have response times and limitations been set?
  • Do response elements address necessary updates, such as site construction, personnel changes, and supply chain changes?
  • Have internal and external communication methods been identified?
  • Are communications backup systems available and described in the plan?
  • Are staff roles and responsibilities specified and communicated?
  • Have alternate strategies and response procedures been identified?
  • Are processes and procedures identified in the plans to assess and monitor size, shape, type, location, and movement of a spill or release?
  • If applicable, have tactical response details been included in the planning process for incidents that expand beyond the confines of the facility?
  • Do trajectory maps mimic local observations and historical tendencies?
  • Do trajectory estimates include potential weather scenarios?
  • Are sensitive sites prioritized for protection?
  • Do plans include specific criteria for provisional tiered responses?
  • Are waste management and demobilization processes communicated?

Documentation

  • Have processes been established for updating planning information prior to an emergency and during a response?
  • Have plot plans and area mapping been integrated with GIS data and knowledge?
  • Are appropriate agreement documentation, such as contracts and memorandums of understanding (MOUs), in place?
  • Has exercise feedback/lessons learned been incorporated into plan revisions?
  • Are training and exercise records, and applicable regulatory required documentation up-to-date and accessible?
  • Are necessary Incident Command (ICS) forms and company paperwork readily available for response documentation?
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Tags: Response Plans, Crisis Management, Facility Management, Emergency Response Planning, Safety, Disaster Response, Business Disruption

Disaster Planning for Supply Chain Distruptions

Posted on Thu, Jan 16, 2014

Given the current state of the U.S. infrastructure, an increase in targeted cyber hacking, and the continual occurrence of high-risk scenarios, ensuring supply chain stability should be part of an overall business continuity effort. Profitable operational productivity cannot tolerate unreliable and fleeting supply chains. Companies must continually evaluate Tier 1 suppliers, and establish subsequent tiers for alternate means of necessary resources, materials, and key business components.

The American Productivity & Quality Center (APOC) conducted a survey to examine the concern over supply chain stability involving the following external risk factors:

  • High-impact natural disasters, such as major tsunamis, earthquakes, volcanoes, or floods
  • Extreme weather, such as devastating droughts, wildfires, or cyclones
  • Political turmoil in vitally important world regions

The survey revealed that 83% of organizations surveyed experienced an unexpected supply chain disruption over the previous 24 months.  26% of the organizations revealed that well-managed business continuity plans (BCPs) met their needs. However, 74% of the respondents did not have a business continuity plan that addressed the disruption. Like many others, these organizations were exposed to the disruption of physical assets in their supply chain, whether at a company-owned facility or at a key vendor’s facility.

According to APOC, supply chain disruptions can lead to tenuous operational circumstances. Aside from the straightforward financial impacts attributed to supply chain disjunctions, a break in the supply chain continuity can damage an organization’s reputation and customer relationships. “An organization’s reputation usually demonstrates a certain level of quality, resulting in the ability to command a higher product or service price. If a company’s reputation lessens due to poor risk management, then so does its ability to command a certain price.” (APOC, pg3)

Successful evaluation of supply chain risks in conjunction with an exercised business continuity plan can help improve mitigation and reduce the recovery time from an unforeseen disruption. Emergency managers should pre-identify critical business processes and the resources and equipment necessary for them to be  functional. Through this process, alternatives can be explored and a business continuity plan can be established that reduces the impacts of infrastructure disorder and associated supply chain disruptions.

Site-specific recovery strategies should be developed with the assumption that the supply chain disruption occurred when the services or output are at the highest level and most critical point. By creating continuity plans for the peak business cycle, critical recovery time objectives can be established to minimize impacts, even in the most productive periods of operations.

As a result of the survey, APOC established recommendations to ensure adequate risk mitigation of supply chains:

1. IDENTIFY SUPPLY CHAIN RISK: Identified risks  should be documented and made  visible to company management.

2. ASSESS POTENTIAL IMPACT: Each risk should be assessed for severity and probability.

3. PLAN HOW TO RESPOND TO RISKS: Companies must prioritize planning and establish a business continuity or recovery plan to minimize supply chain downtime. Plans should incorporate attainable recovery time objectives through proven processes and procedures.

4. MONITOR: Monitoring internal and external supply chain risks can allow companies to evaluate new or altered threats, assess potential impacts, and mitigate any potential negative changes. Through continually monitoring, companies can minimize potential impacts, allowing for a competitive advantage over others without a risk management plan.

5. UTILIZE NECESSARY RESOURCES: Support staff should be included in risk management and response planning processes to ensure all available resources are incorporated. An expert consultant can provide an analysis with an external perspective, often identifying risks and potential mitigation measures that were not detected internally.

The APQC is a member-based nonprofit and one of the world’s leading proponents of business benchmarking, best practices, and knowledge management research.

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Tags: Resiliency, Business Risk, Supply Chain, Business Continuity Plan, Disaster Recovery, Business Disruption

Emergency Preparedness Checklist for Winter Storms

Posted on Thu, Oct 17, 2013

Meteorologists typically release the first projections of the upcoming winter forecasts in early September. Long-range seasonal predictors are regional generalities based on a combination of historical patterns and current scientific evidence. However, despite the potential season forecast, it only takes one significant winter weather event at your facility to disrupt business operations and affect profitability.

Winter storms cause power outages, dangerously cold temperatures, supply disruptions, safety hazards that endanger the lives of people, and potentially impair access to key infrastructure. In 2011, a snowstorm hit Atlanta during the college football BCS national championship. Some businesses experienced supply chain disruptions, while others had to close altogether. One restaurant /pub owner estimated the storm cost him an estimated $50,000 in losses. The lessons learned included purchasing a generator, securing nearby hotel rooms for staff to eliminate staffing shortages, and evaluating supply chain availability.

Scenario-specific emergency response and business continuity plans can minimize operational downtime in the event of severe winter weather. The ability to identify, prioritize, and respond to natural phenomena is critical for preventing the potential for large financial losses and damage to reputation.

For business continuity planning purposes, a business impact analysis (BIA) should be conducted prior to seasonal risks.  A BIA can identify key business process that may be interrupted during a natural disaster.  Once these processes are identified, mitigation strategies can be implemented to reduce the potential  impact resulting from loss of facilities, infrastructure, personnel, or supply chain.

For predictable naturally occurring events, such as the onslaught of winter weather, planning can be accomplished before the incident occurs. Such planning should include, but not limited to the following:

  • Conduct awareness training, including facility evacuation routes and procedures
  • Coordinate activities with local and state response agencies
  • Communicate recommended Community Evacuation routes
  • Procure emergency supplies
  • Monitor radio and/or television reports
  • Secure facility
  • Secure and backup critical electronic files

Understand the following winter storm warning terms:

  • Winter weather advisory: expect winter weather conditions to cause inconvenience and hazards.
  • Frost/freeze warning: Expect below-freezing temperatures.
  • Winter storm watch: Be alert; a storm is likely.
  • Winter storm warning: Take action; the storm is in or entering the area.
  • Blizzard warning: Seek refuge immediately! Snow and strong winds, near-zero visibility, deep snowdrifts, and life-threatening wind chill.

Business owners and/or response teams should incorporate the following concepts into planning for winter weather: 

  • Monitor news and weather reports on television or the radio (with battery backup)
  • Alert employees or others on-site that severe weather is approaching and communicate expectations
  • Be aware of the dangers posed by ice and snow falling from equipment and buildings, mediate if possible
  • Identify dangers posed by cold weather on exposed piping (hazardous releases, flooding, etc)
  • Prepare and insulate exposed piping
  • Contract snow removal services or obtain the necessary equipment (snow shovels, ice scrapers, rock salt, tire chains, etc.)
  • Ensure that company vehicles have a full tank of gas and are functioning properly (heater, deicing fluid, antifreeze levels, windshield wipers)
  • Ensure flashlights are in proper working order and have additional batteries on site.
  • Monitor ice and snow accumulation on any onsite tanks, sheds, or buildings
  • Obtain generators, if necessary, to re-power facilities or necessary equipment
  • If appropriate, leave water taps slightly open so they drip continuously to prevent pipes from freezing.
  • Understand and implement cold weather response techniques  for product spills, as released product may flow under ice or snow.
  • Establish and maintain communication with personnel
  • Consider limiting vehicle traffic
  • Maintain building temperature at acceptable levels and understand safety measures if using space heaters.
  • Notify supervisors if facility(s) loose power or is otherwise unable to operate
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Tags: Climate Change, Power Failure, Business Continuity, Supply Chain, Extreme Weather, Business Disruption

Business Continuity Plan Reviews Identify Preparedness Gaps

Posted on Mon, Sep 30, 2013

Business is not a stagnant entity.  There are multiple moving parts that embody change, allow for progress, and promote growth. Corporate emergency management programs and business continuity plans (BCP) must be adjusted to reflect these changes. Whether change results from facility modifications, corporate mergers, or employee turnover, BCPs need to be reviewed, at a minimum, on an annual basis.

A business continuity review should evaluate identified critical processes necessary for operation. Through this evaluation, shortcomings in mitigation efforts, response coordination, resource capabilities, and response processes can be revealed. The plan may have to be adjusted to incorporate operational changes, employee turnover, and/or new company policies. In a business continuity review, each department should evaluate current critical processes, mitigate identified deficiencies, and update the plan as necessary.  

The following critical business continuity areas should be assessed for accuracy, potential mitigation opportunities, new equipment or resources, and potential policy changes:

  1. Data and computer needs: Identify the procedural details of computer backups, data restoration methods, and the minimum program needs to re-establish critical business processes.  Companies should examine current data center outsourcing to ensure continuity and accessibility or research alternatives.
  2. Notification lists: Update contact lists to ensure all information is accurate. Business continuity planners must be certain that new employees are included in the plan, as necessary, and that notifications are being delivered to accurate e-mail addresses and/or phone numbers. If maintaining accurate contact information is challenging, consider opting for a e-mail notification verification system the enables the contact to verify their own information through hyperlinks.
  3. Communication needs: Clear and effective communication channels must remain available in order to disseminate information to employees, assess and relay damage, and coordinate recovery strategies. Evaluate current communication equipment and/or mass notification systems to communicate to key individuals, company employees, or an entire client base.
  4. Supply Chain: As a company’s needs change and new suppliers come online, plans should be updated to include these critical suppliers. Alternate suppliers should be included in the BCP to ensure consistent delivery and continued operations in the event primary suppliers are subjected to business continuity circumstances, as well.
  5. Essential Personnel: Ensure necessary minimum staffing levels are acceptable to remain operational. Make changes, as necessary. Ensure staff, contractors, and suppliers understand their adjusted individual responsibilities and recovery time objectives.
  6. Equipment needs: Identify and procure necessary equipment and establish processes for continued operations and recovery. This will prevent unnecessary downtime and additional recovery efforts. If applicable, relocate equipment and arrange for essentials prior to incident. This eliminates time consuming and potentially costly efforts.

One of the most important aspects of updating a BCP is ensuring that employees are trained in plan components, and plan revisions are exercised. Each of the following phases of a BCP should be reviewed with employees:

Initial Response:  The organization’s initial response to a business interruption. The processes and procedures that incorporate the Initial Response Phase may include, but is not limited to, the following:

  • Initial Notifications
  • Business Continuity Team (BCT) activation
  • Business Unit personnel activation
  • Initial BCT briefing
  • Perform Impact Assessments and determine scope of recovery
  • Review specific recovery strategies/tasks for BCP implementation
  • Implementation of Business Continuity Action Plan

Mobilization and Relocation: The mobilization of resources (equipment and personnel) for relocation to alternate sites. Through mobilization and relocation, the BCP can be fully implemented to sustain minimum service levels defined for each critical process. This stage includes “Work from Home” and “Alternate Facility” relocation strategies. The Relocation Phase includes, but is not limited to:

  • Confirmation of staff relocation schedules and assignments
  • Mobilization transportation resources
  • Activation of alternate facility equipment and infrastructure resources
  • Occupation of alternate facilities by necessary department members.

Recovery:  The period after personnel and equipment are relocated, to restoration of primary or permanent alternate facilities. Procedures to include in the recovery phase of the Business Continuity Plan are:

  • Implementation of recovery strategies
  • Damage assessment of primary facilities
  • Evaluation of restoration goals/timeline
  • Mobilization of tactical teams for Recovery
  • Monitoring recovery status and plan updates, as necessary
  • Initialization of restoration

Restoration: The period in which personnel return to restored or permanent alternate facilities, to when normal business operations are resumed. Procedures to include in the restoration phase are:

  • Confirm completion of restoration goals for primary facilities and infrastructure
  • Confirm staff relocation schedules and begin relocation to permanent facility
  • Consolidate and archive incident documentation
  • Review and update BCP based on lessons learned
  • Return to normal operations
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Tags: Business Continuity key points, Resiliency, Business Continuity Plan, Disaster Recovery, Business Disruption