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Disaster Prevention and Business Recovery: Are You Ready?

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Disaster Prevention and Business Recovery: Are You Ready? Russell Owens CSP, ABCP, AVP Senior Business Continuity Specialist – PowerPoint PPT presentation

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Date added: 6 September 2019
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Title: Disaster Prevention and Business Recovery: Are You Ready?


1
Disaster Prevention and Business Recovery Are
You Ready?
  • Russell Owens CSP, ABCP, AVP
  • Senior Business Continuity Specialist

2
The World Today
  • Speed, agility, efficiency, responsiveness and
    innovation all remain critical, but equally
    important is a resilient supply chain.
    Research firm, Garner
  • Everybody has moved to a leaner,
    single-sourcing, fewer-supplier approach. Hey
    presto, whats going to happen? You are going to
    increase risk. - Tim Lawrence, managing
    consultant at PA Consulting
  • The potential threat from natural disaster rose
    from 55 in 2010 to 81 in 2011 in a recent
    survey of 100 technology firms
  • We live in an interconnected world where
    geographical disasters and political unrest can
    impact businesses anytime, anywhere and any place

3
Storage of API
Fill Finish
Transit
In-house QC
Supply Chain
Manufacturing of API
Packaging Labeling
Customer
Storage of finished goods Distribution
4
Supply Chain
5
Solutions
  • Live with it
  • Improve it
  • Insure against it

6
The Do Nothing Solution
7
Solutions Live with It
  • Average fall in a share price following an
    announcement to the market of a supply disruption
    was 10 per cent. And it takes the price at least
    60 days to recover from the fall.
  • Stock price movement with and without a
    Contingency Plan

8
Solutions Improve It
  • If the Procurement Head is not part of the
    C-level suite, you need an ally there!
  • What does your BCP cover? Were you part of its
    development?
  • Are you involved in testing the organizations
    contingency plans?

9
Solutions Improve It
  • Split the sources/production up -
  • This sounds like the simplest solution, but is
    it?
  • A diverse supply base is effective, but initially
    more expensive, strategy.
  • Where is the other source/production located?
  • Does this make the risk better or worse?
  • Just In Time
  • Vulnerable to supply chain shocks
  • What are the savings and what are the costs?

10
Solutions Improve It
  • Look at your top 3 products Map It Out
  • What is the supply chain behind them
  • Where are the risk nodes behind that chain?
  • Supplier Relationship Management Program (SRM)
  • Do you have one?
  • Do you know what your suppliers SRM is for their
    suppliers?
  • You want to be at the front of the queue from
    your suppliers if you need them.

11
When Looking at Suppliers
  • Do not look at their ability at a single point in
    time. Take a longer look at the chain (5 years?)
  • Map your exposures - Where are the pinch points
    that will effect the chain.
  • Location
  • Transportation
  • 2nd and 3rd level suppliers
  • Other areas of concern
  • Start the process when you are qualifying a
    supplier - Use of audits and detailed
    questionnaires

12
Sourcing of Materials
  • Who will source goods?
  • Develop contingency plans for each element
  • Determine level of stock consider single source
    items or items with extended lead times for
    delivery
  • Where are they being warehoused
  • Are there alternative materials or alternative
    vendors
  • Master Service Agreement should spell out
    roles/responsibilities
  • Pedigree

13
Contingency Plans
  • Develop a plan with assigned responsibilities
  • Identify, qualify and select third party service
    providers
  • Negotiate contracts with each selected provider
  • Consider the Regulators and other Government
    requirements
  • Stress test the formal plan
  • Revisit your plan on a semi-annual or annual
    basis

14
Training and Testing
15
Solutions Insure Against It
  • Insurance
  • Do you have enough ?
  • What does it actually cover ?
  • Have you discussed your needs with your Risk
    Manager or Insurance Buyer?
  • 30 per cent of US companies do not have any
    cover for supply chain disruption.
  • Most Business Interruption (BI) policies tend to
    cover
  • First-tier suppliers on a named or unnamed basis
  • Physical damage to that supplier (i.e.
    earthquake, flood or fire)
  • Does it cover Extra Expense? What are the
    limitations?

16
Questions
17
Thank You
  • Chubb Group of Insurance Companies (Chubb) is
    the marketing name used to refer to the insurance
    subsidiaries of The Chubb Corporation. For a list
    of these subsidiaries, please visit our website
    at www.chubb.com. Actual coverage is subject to
    the language of the policies as issued. Chubb,
    Box 1615, Warren, NJ 07061-1615.
  • This document is advisory in nature. The
    information provided should not be relied on as
    legal or insurance advice or a definitive
    statement of the law in any jurisdiction. For
    such advice, an applicant, insured, listener or
    reader should consult their own legal counsel or
    insurance consultant. No liability is assumed by
    reason of the information this document contains.
    Whether or to what extent a particular loss is
    covered depends on the facts and circumstances of
    the loss and the actual coverage of the policy as
    issued.

18
References Additional Resources
  • Downey, E., Shea, T., Kelleher, B. (2012).
    Beware the Weakest Link! Mitigating Supply Chain
    Risk Best Practices Risk Management and Risk
    Transfer Strategies. What's Your BIO?, (p. 8).
  • Evans, J. (2011, 02 06). 4. Retrieved 08 30,
    2012, from WSJ.com http//online.wsj.com/article/
    SB10001424052748703296604576005060742737534.html?
  • Gammelgard, A. (2011, 05 19). 8. Retrieved 08 30,
    2012, from aws arena solutions
    http//www-aws.arenasolutions.com/blog/post/managi
    ng-supply-chain-risk
  • Hale, T., Moberg, C. R. (2005). Improving
    supply chain disaster preparedness A decision
    process for secure site location. International
    Journal of Physical Distribution Logistics
    Management, 195.
  • Hookway, J., Poon, A. (2011, 05). Crisis Tests
    Supply Chain's Weak Links. Retrieved 03 18, 2011,
    from The Wall Street Journal http//online.wsj.co
    m/article/
  • Snell, P. (2011, Summer). 10. Retrieved 06 28,
    2012, from cpoagenda.com http//www.cpoagenda.com
    /current-issue/features/chain-reaction/
  • Walch, D. (n.d.). Planning for Supply Chain
    Continuity. Retrieved 08 30, 2012, from
    disaster-resource.com http//www.disaster-resourc
    e.com/articles/08exe_p24.shtml
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