Business Continuity and Disaster Recovery Strategies in Manufacturing
Manufacturers are vital to the continual growth of the U.S. economy, contributing more than $2 trillion to our gross domestic product each year and accounting for nine percent of the total American workforce, according to the National Association of Manufacturers. When a disaster strikes the manufacturing industry or its supply chain, it has the potential to send significant ripples through the entire country, while also putting individual companies at risk of going under. That’s why, in manufacturing, business continuity and disaster recovery planning is especially important.
Manufacturers face several unique challenges when it comes to ensuring business continuity and effectively recovering from a crisis. Here, we take a look at some of the key strategies for manufacturers looking to ensure their long-term success, even in the face of business-impacting events:
Perform a business impact and risk analysis (BIA).
First, you need to understand the types of risks that your business faces. This will help you ensure employee safety, avoid financial losses, and protect your profitability by minimizing downtime and maintaining the company’s reputation.
In the manufacturing world, hardware and software problems are usually ranked as significant disruptions, followed by power failures, human error, vandalism and hackers, natural disasters, fire, and in extreme circumstances, even terrorism.
Analyzing your risk helps you get a comprehensive idea of what the company is up against and what areas of the business may be impacted. You can conduct an internal BIA, or you can partner with an outside firm to complete this step.
Identify business-critical facilities, resources, and functions.
U.S. manufacturers own, operate, or rely upon a wide swath of assets, including office buildings, plants, warehouses, production equipment, and transportation assets—all of which are potentially vulnerable to threats. On top of that, your organization’s employees are another vital asset unto themselves. How can you possibly safeguard it all?
A good first step is to get senior leadership to meet with your business continuity and disaster recovery team(s) to determine which resources are most critical to the business. Work together to identify those assets that must be safeguarded and then decide which business functions need to be restored first.
Your organization might prioritize IT systems, customer service channels, production lines—or all of the above. The key here is to recognize what is most important for the company’s ongoing success and then figure out how to protect and maintain that function first.
Build out your plans.
Next, it’s time to draft your business continuity and disaster recovery plans. This process can no doubt be challenging and time-consuming. However, it is key to preparing your organization for the difficulties it will inevitably face.
As you work through your planning documents, keep these best practices in mind:
- Create separate plans for each geographic location, taking into account the specific threats that each area faces (e.g., climate, geopolitical forces).
- Establish disaster recovery command centers, each with a designated leader from the business continuity team.
- When possible, incorporate redundancies that will help your company continue operating. This might include back-up suppliers or transportation companies, or secondary production facilities.
- Include your business partners, such as vendors or suppliers, in the planning process. Coordinate your overlapping business continuity efforts to ensure that they know what to expect and are able to aid in any relevant disaster recovery actions.
- Cultivate partnerships with local first responders and utility providers and, when possible, include them in your planning efforts.
- As you work through your plan development, look for any missing processes or policies that you need to add to round out the recovery effort.
Once your plans are drafted and approved, be sure to test and revisit them regularly. This will ensure that your employees and business partners understand their role in business continuity and disaster recovery, while also helping you and your team keep the plans up to date and relevant.
Leverage outside resources.
Not all manufacturers have dedicated business continuity or disaster recovery departments—or even employees. The vast majority of U.S. manufacturers have fewer than 500 employees, and three-quarters of those have fewer than 20 workers, according to the National Association of Manufacturers. This means that many organizations have to effectively plan for business disruptions without the benefit of dedicated resources.
Smaller manufacturers in particular stand to benefit from all the outside help they can get. If your business would struggle to complete its own business continuity and disaster recovery planning, you can outsource the work to a firm that specializes in these areas. Or you can incorporate new technologies that make planning and implementing these efforts easier and more streamlined.
Today, mobile crisis management apps and cloud-based software enable manufacturers of all sizes to digitize their planning documents and make them readily available to all employees through their mobile devices. This simplifies business continuity and disaster response efforts by ensuring that everyone has access to relevant information and understands his or her role. Digital plans also make training and updates faster and easier.
With the proper planning and preparation, manufacturers can help mitigate the impact of many crises and unexpected events, ensuring that their business—and the industry as a whole—enjoys success for a long time to come.