If one of your downstream suppliers suddenly had to halt deliveries for an unforeseen period, what business interruptions would your company experience? After severe winter weather, disaster recovery services can aid vendors that are frantic to resume the delivery of their goods to customers that depend on them for their own business. When you plan for the possibility of a supply chain interruption in a disaster preparedness plan, your organization can proactively mitigate losses and reduce the negative impacts.
Assessing a Supply Chain: Tips for Disaster Recovery Services
- Identify the suppliers: List your suppliers, the goods they provide and their geographic location. Then prioritize them in order of importance in regards to your company’s business operations. For example, if you have an ice cream factory, the company that supplies the cartons may be at the top of the list.
- Consider potential threats: For each of the suppliers that you list, consider the threats that they may face during the winter. A company on the East Coast, for example, may face record snowfalls that stop all traffic. One in a different part of the country may experience flooding.
- Analyze demand: After identifying the risks that may affect your company and your suppliers, consider if the products that you or your vendors sell will be in high demand after a disaster, as well as the respective abilities to meet this demand.
- Verify supplier insurance: Determine if the vendors have a sufficient insurance to efficiently rebuild in the event of a disaster.
- Learn about the business continuity plans: Ask your suppliers to review their business continuity plans to learn what types of events may affect them. In a contract, your company may choose to add language regarding regular continuity control reviews.
- Assess the risks: Vendors that don’t have a plan in place may pose a higher logistical risk to your company if winter weather affects the supply chain. Consider the risks that your suppliers face and their levels of preparedness. Then determine how a halt in each supply chain could affect your company. Keep in mind that if a disaster preparedness team determines that a supplier’s lack of preparation poses too high of a risk, the company may need to select a different primary vendor.
Filling in the Gaps
After identifying key suppliers and assessing the likelihood of interruptions, consider which vendors may serve as adequate backups in the event of a disaster. When evaluating secondary suppliers, look at those that use different ports than the key vendors, operate out different areas of the country, use different modes of transportation or use different routes. Then perform insurance- and business continuity-related assessments on the prospective backup suppliers to ensure that they’re a good fit.
After deciding on backup suppliers, have procedures in place with each of them that will expedite deliveries to mitigate losses and interruptions that your organization may experience. For example, set up accounts in advance, inspect the quality of the goods or approve proof sheets before you need to access a backup supplier’s services.
Just as you appointed personnel to take on different duties during a disaster, designate a staff member to communicate with a supplier’s crisis manager when there is an incident to establish situational awareness. Your company can then use the information gained to decide if it needs to work with a backup supplier.
Knowing how a disaster may affect your company’s partners and having a contingency plan are essential components of a disaster preparedness and business continuity plan. If your company’s success depends on suppliers, it’s important to consider how severe winter weather may affect the availability of goods before a disaster occurs. If you’re not sure where or how to start evaluating the risks that your vendors may face and pose, Polygon’s business disaster recovery services can help.
Photo by Nick Saltmarsh via CC license