When the COVID-19 pandemic hit, many companies discovered significant vulnerabilities in their supply chains, remote working capabilities, IT management and beyond. Together, these vulnerabilities created a stress test for companies’ business continuity management strategies.
What companies should know about maintaining business continuity when uncertainty strikes
One important finding emerged as leaders navigated through uncertainty: Focusing on the most critical aspects of the business helped companies streamline their approach, prioritize strategically and get back to work more quickly. In a rapidly evolving risk situation during the pandemic, companies that identified mission-critical activities were able to direct their resources, people and vendors to the highest-value activities. In turn, they could serve customers and stakeholders far better and faster, at a time when many were seeking a sense of normalcy.
Here are some strategies companies can adopt to help define and manage essential services:
- Conduct a regular analysis to identify mission-critical products or services and the resources required to support them.
- As companies grow and evolve their product and service portfolios, they need to conduct this analysis on a regular basis, ideally annually.
- They also need to know which people are necessary at every step to manage talent effectively when uncertainty hits
- As companies document the process, they should identify which tasks are well suited to remote work and which aren’t.
- Determine criticality levels by product or service.
- Positioning products and services on a spectrum can help companies determine the best use of resources at any given point in time.
- Establish how long a given process or vendor can be down before the disruption has a negative impact on operations, customer service, finances, reputation, and contractual or regulatory compliance.
- Contracting with multiple vendors to produce a key product or service will help prevent one vendor’s downtime from disrupting the supply chain.
- Understand the role of vendors in mission-critical work and ensure that vendors have satisfactory business continuity management strategies and plans.
- More companies are requiring master services agreements to incorporate BCM plans to provide accountability and transparency when risks strike.
- A vendor resiliency analysis can help companies identify the best way to deliver essential products and services. The vendor resiliency analysis should include an assessment of:
- The vendor’s plans for emergency response, IT disaster recovery and business unit continuity
- Communication strategies and plans for disaster response
- The vendor’s view of the relationship and willingness to preserve and improve it; for example, stepping up to problem solve in new areas
- The vendor’s willingness to include its BCM approach and deliverables in the master service agreement
In practice: How a burger chain defines essential services — and delivers
To illustrate essential services in action, we can look at a hypothetical burger chain. BCM strategies and vendor resiliency analyses come into play when a burger chain focuses on its mission-critical work — getting burgers into the hands of customers. Companies should work with vendors to ensure consistency in quality and safety at every step, including outlining in the master service agreement how vendors should respond to risk — for instance, if a grower experiences a listeria outbreak, the temperature control fails on a truck while in transit, or paper products face a shortage.
A robust BCM plan and backup vendors for key products help keep the supply chain intact — and support the restaurant’s mission. The example below illustrates some of the supply chain, vendor and personnel factors the burger chain could incorporate in its BCM strategy.
Growers/ farmers/ ranchers
- Lettuce, vegetables
- Grain mill and bakery
- Oil for fry vats
- Wrappers and containers
- Refrigerated fleet
- Driver availability
- Global distribution centers; personnel safe and healthy
- Temperature-controlled trucking
- Driver availability
Store and personnel
- Frontline workers with measures in place for safety and health
- Equipment and servicing when needed