4 critical strategies for ensuring business continuity in the manufacturing industry
Organisations are increasingly relying on complex supply chains to deliver services efficiently and cost-effectively. Some industry sectors such as retail, automotive, healthcare to name just a few, are built on their supply chains and many organisations across all sectors, are choosing to outsource functions and services to streamline operations and focus on their core capabilities.
In both scenarios, the added exposure to third-party risks needs to be identified and managed. When critical functions are managed externally, it becomes more challenging to ensure they are delivered efficiently, and in a resilient manner that protects your business. The key question is: how confident are you, that your supply chain relationships can support your business without disruption?
Why supply chain resilience is gaining regulatory attention
Regulatory bodies are increasingly scrutinising supply chain risk. Factors driving this focus include evermore complex interconnected networks, an increase in customer expectations in terms of increased flexibility and shorter timescales, and an upsurge in wider and global on and off-line disruptions. Businesses are still ultimately accountable for the performance and security of the services delivered by third parties. While outsourcing can help reduce internal workloads and operational costs, responsibility for risk mitigation stays firmly in-house.
As supply chains become more layered, it’s vital to have a clear process for evaluating and managing third-party dependencies, especially as these suppliers face their own set of vulnerabilities.
1. What supply chain resilience means
Definition
Supply chain resilience is your organisation’s ability to absorb shocks, respond quickly, and maintain continuity when disruption hits.
What it involves
It’s about predicting potential issues, adapting in real time, and bouncing back fast when the unexpected happens.
Why it matters
Resilient supply chains reduce lost revenue, limit operational costs, support customer retention, and protect brand trust.
2. Why supply chain resilience has become business-critical
Constant disruption
Events like COVID-19, extreme weather, and political tensions have exposed the fragility of global supply chains. Resilience is not a “nice to have”, it’s an organisational necessity.
Operational advantage
Firms that maintain flow during disruption can gain market share and outperform slower-moving rivals.
Long-term cost savings
Minimising downtime and avoiding last-minute fixes reduces long-term costs, even if it means higher up-front investment.
Customer expectations
Customers expect consistency. Reliable delivery strengthens loyalty and increases repeat business, and your ability to continue to deliver even in tough conditions, can set you apart from your competitors, win over new business and increase your market share.
3. What you can do to deliver supply chain resilience in practice:
We recommend that you follow this comprehensive 8-point checklist as a journey – it’s not intended to be a one-off tick-box exercise:
- Supplier diversification: Work with multiple suppliers across different geographies to reduce exposure to any single failure point. This includes developing relationships with one or more backup suppliers of critical services, so that you have pre-vetted alternative providers ready to step in at short notice to reduce exposure if your primary provider encounters problems.
- End-to-end visibility: Track activity across your full supply chain, including second- and third-tier suppliers, to spot risks early.
- Pinpoint weak spots: Audit your supply chain to flag risks, like sole-source suppliers, congested ports, or fragile IT systems. Then take action to address these! It’s also wise to evaluate each of your key suppliers’ own resilience, not just in relation to your needs. You need to know that they have a resilience approach and do not have inherent risks that are harder to relate directly to services they deliver to you. Do they have contingency plans in place internally? Can they continue their business operations during a crisis? By aligning your own business continuity planning with those of your key suppliers, you build a stronger, more adaptive supply chain.
- Operational agility: Make sure you can move quickly to switch suppliers, reroute shipments, or shift production when conditions change. Prioritising agility over cost-savings in your supply chain to maintain continuity of your operations, is key.
- Strong partnerships: Build trust and alignment with suppliers and logistics partners. Open lines of communication make response faster and more effective. Specifically, share data, discuss risk mitigation, and build shared contingency plans.
- Smart tech upgrades: Adopt tools that give you real-time data, automate processes, and improve communication across your network., for example AI, automation, machine learning, blockchain, and digital twins to improve your forecasting, speed up decisions, and gain insight into supply chain dynamics.
- Scenario planning: Develop detailed response plans for likely disruptions. Develop fallback strategies with alternative suppliers, routes, production lines. Then test and update them regularly.
- Measure and refine: Track the performance of your resilience efforts. Adapt your strategy based on what works, what doesn’t as well as what changes. Get expert support from resilience and business continuity providers.
Staying ahead in a complex supply chain landscape
As global supply chains grow more complex, the risks associated with third-party dependencies increase in parallel. With regulators demanding greater transparency and control, businesses must take proactive steps to shore up resilience.
By identifying high-risk suppliers, embedding resilience into supplier management processes, and maintaining open lines of communication, organisations can reduce the impact of potential disruptions. Effective supplier risk management isn’t just good governance; it’s a strategic priority for long-term business continuity.
Support to strengthen your supply chain
Creating and maintaining a resilient supply chain can be a challenge, but you don’t have to face it alone.
Our team can help you conduct a comprehensive business impact analysis, mapping your key suppliers and assessing the criticality of their services. Using our powerful Shadow-Planner platform, we can automate this process or guide you through it manually, whichever suits your environment.
Take a proactive next step towards better supply chain resilience
As part of our managed services offering, we carry out third-party supplier Business Continuity Management (BCM) assessments. This gives you assurance that your external partners are prepared for disruptions - so their disruptions won’t become yours!
The manufacturing industry is currently undergoing a significant transformation with the advent of Industry 4.0. In order to optimise this transformation, manufacturers must prioritise resilience within their operations. Safeguarding production output and mitigating risks arising from cybercrime and supply chain disruptions are paramount.
In today’s environment, manufacturers frequently encounter disruptions within their supply chains. Having a robust business continuity and disaster recovery plan is crucial not only for effectively addressing critical events as they occur but also for ensuring uninterrupted product delivery to customers.
Considering these challenges, let’s explore some of the key strategies that manufacturers should adopt to secure their long-term success, even in the face of business-impacting events.
1. Assess the risks your business may encounter
To begin, it is crucial to comprehend the critical aspects of your business, their dependencies, and the duration for which you can afford to be without them. Simultaneously, understanding the recovery capabilities of these dependencies will enable you to identify potential risks to your business and its recovery. Conducting a thorough Business Impact Analysis (BIA) will help uncover this valuable information. In the manufacturing sector, typical disruptions include hardware and software issues, power failures, cybercrime, human errors, natural disasters, and fires.
Performing a BIA can be labour-intensive and time-consuming, but it serves as an efficient method for swiftly identifying operational risks that might otherwise remain hidden until an incident occurs. While conducting a BIA internally is an option if you have the necessary resources, many businesses choose to outsource this task to external experts. Wavenet is here if you need us.
2. Establish your business-critical resources
Manufacturers possess a range of essential assets, including office buildings, warehouses, production lines, and transportation facilities. However, these assets are susceptible to various threats and disruptions. Therefore, it is crucial for your business continuity and disaster recovery team, along with senior leadership, to collaborate and assess which resources hold the utmost importance for your business. Creating a simple list of these business-critical assets, without the need for extensive documentation, will suffice. This inventory will enable you to determine which business functions should be prioritised for restoration in order to safeguard these vital resources.
Whether your focus is on equipment, IT systems, or production lines, the key lies in recognising what holds the greatest significance for your business. Once you have identified your critical resources, it is time to develop comprehensive business continuity and disaster recovery plans.
3. Develop your business continuity and disaster recovery plans
Now it’s time to construct your business continuity, crisis management, and disaster recovery plans. It is crucial to understand the distinctions between these plans and how they can complement one another.
A crisis management plan enables your business to respond swiftly and in an organised manner to unforeseen or sudden incidents. It includes vital information regarding communication protocols with staff and key stakeholders, escalation and de-escalation procedures, as well as immediate actions to be taken. On the other hand, a business continuity plan outlines the steps necessary to recover and resume critical operations at a predefined level after any disruption that affects the business’s functioning, regardless of its duration. A disaster recovery plan primarily focuses on restoring the business’s critical technology infrastructure and encompasses procedures for managing the recovery of IT and communication services to support the business after a service disruption. If needed, a crisis management plan can be integrated into the broader business continuity plan.
Top tip – prioritise smart planning over excessive planning!
Throughout our experience, we have observed numerous organisations attempting to prepare for every conceivable situation. However, the truth is that it’s impossible to anticipate every single thing that “might” happen. Therefore, it is crucial not to burden yourself with that expectation.
A successful plan isn’t one that dictates actions for specific scenarios, but one that empowers you to make well-informed decisions in any situation. A useful plan is one that is actually utilised because it provides assistance. When creating your plan(s), consider what essential information is necessary for guiding your decision-making process. Anything beyond that is likely unnecessary, as it only complicates the plan and renders it impractical. If you find it necessary to have a plan tailored to a specific scenario, ensure that it focuses solely on that particular situation. Most importantly, make sure that everyone understands the purpose of the plan.
4. Harness external resources
No business is impervious to cyber threats, operational risks, and the unpredictable nature of life! When faced with adversity, having a well-tested business continuity plan and reliable business continuity services can make a substantial difference for manufacturers. At Wavenet, we excel in both of these areas, and we are here to offer our assistance.
Given the intricate nature of business continuity and operational resilience, it is understandable that many companies seek outsourced solutions. This approach ensures that you benefit from the expertise of professionals experienced in crafting comprehensive business continuity plans. It also grants you access to cutting-edge solutions based on industry best practices.
Our team of BCM/OR consultants is equipped to oversee your entire business continuity management program, relieving you of the challenges associated with in-house management.
Our ultimate goal is to assist manufacturers in optimising efficiency, streamlining costs, and effectively addressing present and future industry challenges, all while safeguarding your customers and infrastructure in the ever-expanding online marketplace of today.