Planning for Business Continuity

Business Continuity ManagementIn prior posts we discussed key concepts from the APICS Body of Knowledge, Supply Chain Risk

and Supply Chain Risk Management.

A related concept and important element of operational risk reduction is Business Continuity Planning.

APICS Dictionary, 15th edition, defines Business Continuity Planning as:

‘Plans to ensure the organizational capability of continuing to deliver products or services at acceptable predefined levels of following a disruptive incident.’

As risk management becomes a more important part of companies strategic plans they are leveraging Business Continuity Management System (BCMS).

APICS Dictionary, 15th edition, defines Business Continuity Management System as:

‘Part of the overall management systems that establishes, implements, operates monitors, reviews, maintains and improves the organizational capability of delivering products or services at acceptable predefined levels following a disruptive incident.’

From an APICS BOK perspective an astute student would also be familiar ISO 22301.

APICS Dictionary, 15th edition, defines ISO 22301 as:

‘An international standard specifying requirements for setting up and managing an effective business continuity management system.’

At a high level Business Continuity Planning is applying common sense and a bit of thought to potential risks facing the organization. For example:

  • Establishing emergency contacts and communication protocols,
  • Having contingency plans in place for getting operations back on line as soon as possible,
  • Insurance planning whether 3rd party or self insured.

In a global supply chain world, supply chain managers are faced with more risks to their supply chains including regional labor unrest, natural disasters and terrorism. Things like tsunamis, hurricanes and wild fires seem to be occurring with more frequency potentially resulting in supply chain disruptions. But there are other, more probable disruptors. For example, episode 26 of Supply Chain Now Radio included a discussion on Business Continuity Planning, specifically, supplier risk. For example, one of the guests stated: “68% of all supply chain disruption is attributable to supplier insolvency”. A big statement, but if accurate, should be included in any planning process.

If you are studying for CLTD, these terms are NOT on the top terms list, but it is helpful to understand the concepts around Business Continuity Planning. From a CSCP perspective, Business Continuity Management System and ISO 22301 are suggest top terms, along with Supply Chain Continuity defined in the APICS Dictionary, 15th edition as:

‘The strategic and tactical capability of an organization to plan for and respond to conditions, situations, and events as necessary in order to continue supply chain operations at an acceptable predefined level.’