Any operational hiccups can send ripples across any organization, but for manufacturing businesses, the impact can be even more severe. If natural disasters, power outages, or other disruptions occur, not only are the operations of a manufacturing business affected, but so is the entire supply chain. It is therefore crucial for manufacturing businesses to have strategies in place to maintain business continuity.
What business continuity challenges do manufacturing businesses face?
Manufacturing businesses face a variety of challenges that can disrupt operations and impact business continuity. These challenges include:
- Supply chain disruptions: Any disruptions in the flow of raw materials, parts, or components can cause delays in production.
- Equipment failures: If automated machinery fails or breaks down, businesses may experience costly downtime and delays in production. Common causes of equipment failures include wear and tear, poor maintenance, and power outages.
- Natural disasters: Extreme weather events like earthquakes, floods, hurricanes, and even volcanic eruptions can damage facilities, equipment, and infrastructure, making it difficult to continue production.
- Cyberthreats: Cybersecurity breaches can halt production systems and result in the theft of sensitive data and intellectual property.
- Human error: A simple mistake on the production line or improper handling of equipment can lead to delays and costly downtime.
How can manufacturing companies develop a business continuity plan?
A business continuity plan (BCP) is a crucial guide to help manufacturing companies navigate any disruptions and stay operational. Here are some key strategies that manufacturing companies should consider when developing their BCP:
Identify crucial operations and resources
The first step in creating a BCP is to identify functions, processes, and assets that are critical to business operations. These may include production facilities, supply chain partners, automated machinery, IT systems, and intellectual property. By identifying these critical elements, businesses will know which areas to restore first to keep operations running.
Conduct risk assessments
Conducting risk assessments can help identify the likelihood and severity of the risks that may impact a business. Companies may face different types of risks depending on their location and the nature of their operations. For instance, Hawaiian businesses need to account for unique risks like volcanic eruptions, hurricanes, and tsunamis, as well as non-region-specific risks like cyberthreats and power outages.
Businesses should also consider the potential impact on their operations, employees, customers, and finances. For example, a ransomware attack is likely to have different consequences than a natural disaster like an earthquake, and the response strategies should reflect those differences. As such, companies should gather input from various departments, including production, IT, and human resources to develop a comprehensive understanding of potential risks and their impact on key business areas.
Define recovery time objectives (RTOs) and recovery point objectives (RPOs)
RTO and RPO are critical metrics that determine how long a business can afford to be without certain functions and how much data loss it can tolerate. Manufacturing companies should consider these metrics when developing their BCP, as they directly impact the speed of recovery after an interruption.
For example, a company may determine that it cannot afford to be without its automated machinery for longer than one hour, and any data loss must not exceed 30 minutes. These metrics will help determine which components of the business need to be prioritized and how quickly they should be restored to minimize major losses.
Set up contingency measures
Once the critical operations, risks, and recovery metrics have been identified, businesses can implement contingency measures to mitigate potential disruptions. There are several measures that companies can take, including:
- Partnering with alternative suppliers for critical materials or components to reduce the impact of supply chain disruptions
- Maintaining redundant equipment or implementing backup power sources in case of sudden system breakdowns
- Implementing secure off-site data backups that can be used to restore systems and data in case of a cybersecurity breach or disaster
- Establishing remote work arrangements for administrative employees in case of facility closures or other disruptions that may make it impossible to work in the office
- Setting up a cold site or secondary facility with the bare essential equipment and systems needed to resume operations in case the primary facility is damaged or destroyed
- Providing emergency contact information for employees to ensure timely communication during an emergency
Create a recovery workflow
Detailed recovery workflows and procedures guide response efforts during different types of disruptions. If a cyberattack occurs, for instance, a comprehensive incident response plan that involves containing the attack, restoring systems and data, and conducting forensic analysis can help reduce downtime and mitigate damages. Similarly, a detailed recovery workflow for natural disasters should outline steps for securing assets, salvaging equipment, and resuming operations safely.
In most instances, recovery workflows require clear reporting protocols, flexible communication channels for escalation, and well-defined roles and responsibilities for different emergency response teams. Business continuity affects the whole organization, so it’s important to communicate with internal and external stakeholders to ensure everyone is on the same page.
Test the plan regularly
After developing a BCP, manufacturers must regularly test and update it to ensure its effectiveness. Conducting drills, tabletop exercises, or simulations can help identify potential loopholes and weaknesses in the plan and address them before a real emergency occurs. Regular testing also serves as an effective training tool, as it ensures that employees are familiar with their roles and responsibilities during an emergency.
The resilience of your manufacturing operation depends on a thorough and actionable business continuity plan. At Tech Partners Hawaii, we’re dedicated to helping your business prepare for disasters with tailored solutions that protect your critical operations, minimize downtime, and ensure a swift recovery. Get in touch with us to build a stronger, more resilient future.