Business Continuity Plan – When?
When should I create a Business Continuity Plan, it’s a question I’ve been asked a few times over the years. Having been asked frequently doesn’t make answering the question any easier, but looking at the businesses that I was dealing with did give some useful insights.
One of the things that became apparent was that once there was a structure that allowed delegation of control, there seemed to be the requirement for the Business Continuity Plan framework to be created. Once you start seeing departments within a business, there needs to be a structured plan minimising the risk of a department being impacted if another department doesn’t work the way it is expected to work.
This came to my attention whilst doing some work for a company that sold essential oils, most were despatched to the customers by mail in small packages. The company had expanded very rapidly, in it’s first year the turnover was £300K from nothing. In it’s second year £30M, impressive yes but there was an issue that caused a major business impact that made a dent in what the figures should have been.
The person responsible for purchasing unknowingly ordered several thousand bottles of a slightly different design, with the result that the existing custom packaging couldn’t be used. Many of the bottles had been filled and labelled using much of the stock, but these couldn’t be shipped as the packaging was the wrong physical size for the bottles.
The company experienced a significant delay in shipping product due to the lead time for ordering new stocks of the oil and containers, in fact a two week delay. To ship the product packed in the wrong bottles the company has to decant the product into additional bottles of the original design to fit the packaging, this simple mistake meant no product was shipped for two weeks (4% of the year) and significant additional costs were incurred.
This event did have a significant effect on the company turnover and associated costs, it probably wouldn’t have been easily preventable – but there should have been a process ensuring that the correct containers were ordered and the mistake should have been picked up by both the company and its supplier.
Would the continuity plan had there been one have negated or mitigated this, properly considered it probably would have – there were no checks in place to verify that the bottles were suitable or even correct. The problem was discovered when the product was being prepared for shipping, at the end of the manufacturing process.
So I would say that the earlier the better for a business continuity plan, having nothing in place when things go wrong can be a disaster.
Recent Comments