Bulletin / Embedding BC for...

Embedding BC for a More Resilient Future

Author: Charlie Maclean-Bristol, Training Director, FBCI, FEPS

As it is BCI Education Month, this week Charlie discusses the need for embedding business continuity to create a more resilient future, using examples of scenarios that are happening right now across the world.

This title was given to us for BCI Education Month and I promised Kitt in the BCT office that I would write a blog on the subject. All September I have been slightly struggling with what to write on, as this is rather a wide subject. I thought what I would do is comment on a few contemporary business continuity landscapes, the issues going on at the moment and see if I can work them back to the title!

One of the issues which caught my eye this week was the sudden panic on the possibility of the UK running out of carbon dioxide, which is used in a large range of food products, keeping food fresh, and in the slaughter of animals for meat. According to the papers, we were 10 days to two weeks from running out. The loss of supply was down to a number of fertiliser factories shutting down due to the high price of gas. One of the questions that came to mind for me was, did business continuity professionals identify that carbon dioxide was a key component of their company’s products and did they raise the alarm early? Or was it actually procurement or the supply chain department going to the CEO to lobby the government into paying to get the fertiliser factories up and running again? Was this a failure of business continuity or procurement? As business continuity managers, we should have done our key supplier analysis. In the BIA (Business Impact Analysis), we have a strategy in place for mitigating this risk and so does this mean we are not vulnerable to the loss of supply? In my opinion, sometimes when conducting BIAs we put the information into the BIA and identify the risk, but when it comes to mitigating it, it is often all too difficult. Especially in supply chain risks where there is a lot of complexity and the risks are not always easy to mitigate and so the risk sits in the BIA, but nothing has been done about it. As a family, we have four spare bottles for our soda stream to make fizzy water, so we are going to be fine during this crisis, but I suspect this is far more by luck than us having a very well prepared family business continuity plan.

I suppose this ties in with the title that if you can identify key suppliers and monitor them you can be more resilient, but it does seem to be a bit of a failure of business continuity if we have to get government intervention to secure the supply rather than relying on our own plans.

Another story that is hitting the headlines is the high cost of wholesale gas, which has led to a number of suppliers of gas contracts to customers going bust. As per the graph shown below from the BBC and Bloomberg, you can see the price has recently tripled.

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With the switch from coal to gas generating, there have been predictions for several years that the UK will be very dependent on imported gas. The gas is often imported from countries that we do not have good relationships with, such as Russia, therefore this situation was a foreseeable crisis. We must note that this is the beginning of the autumn season and going into winter our demand is going to increase, so will the price continue to go up further? The loss of carbon dioxide manufacturing and the failure of gas companies are the first casualties of this price rise we have seen. In our hypercomplex world, there will be lots of other impacts which will reveal themselves over the next few months as the high price of gas has a knock-on effect on other industries. I think we need to be very vigilant as an organisation and as business continuity managers on identifying the impacts early and taking steps to mitigate them. The only downside to this is, if as an organisation we start to panic buy or hoard a particular commodity, this will have a knock-on effect on the supply chain which will cause what we don’t want to happen to be brought forward.

A member of the PlanB Consulting team told me the other week that her car had gone up in value by £4k over the last few months. I then read an article stating that the price at the moment of second-hand cars often exceeds the cost of a new car. This is due to supply and demand. A shortage of chips which are a key part of cars are in short supply worldwide and so production lines have had to slow down or closed.

We are seeing petrol stations in the UK running out of fuel due to a shortage of drivers, as well as gaps on supermarket shelves due to the same reason. Retailers are warning of possible shortages at Christmas again due to the lack of drivers, agricultural workers and a lack of containers in Asia. Some of these issues are being put down to Brexit and COVID, while others are adjustments and issues in the global economy. Again, due to the hypercomplexity of the global economy, it is difficult to predict them and they may only become apparent once they become an issue.

Coming back to the title, nobody can argue that becoming more resilient is a good thing and the fact we live in such a volatile world at the moment, it has never been truer. Embedding business continuity is always a good idea, so perhaps the answer is to redouble our business continuity efforts, as at present they are required.

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