Recovery

In the world of risk mitigation, contingency plans are the best insurance. They help to guard against financial and operational risks that come from natural or man-made disasters. Manufacturing losses can arise from bad weather (hurricanes and tornadoes) to fires and explosions. Vandalism and safety hazards are also a consideration. In manufacturing, both the facility and the specific processes should have recovery plans.

Disaster recovery plans for manufacturing are complex. It is not sufficient to assume insurance programs cover the financial loss that might occur. Those processes that affect normal operations can have a ripple effect and create larger losses over an extended time. Understanding the cost of risk for manufacturing facilities is a function of working through different worst-case scenarios. Once known, the highest-risk events should be communicated to higher-level management. The more visibility senior management has, the more support disaster recovery plans will have.

Manufacturing often has numerous interdependent relationships throughout the organization. Conduct a business-impact analysis in order to best illustrate and quantify the risk of major disaster in your organization. The analysis should include recovery times, priorities, critical processes and the most cost-effective recovery packages. This will provide management with the data it needs to make the most informed decision for a recovery strategy.

Business-continuity plans in manufacturing environments must also include an emergency-response plan (evacuation, health and safety issues), a facility- and equipment-restoration plan (damage assessment, replacement costs, clean-up and salvage control), a product-fulfilment plan (alternative product suggestions) and a crisis-management plan (communication strategy). Also important in any recovery plan is the identification of your most critical vendor and supplier relationships.