Most purchasers prepare for supply disruption

6 April 2011

6 April 2011 | Angeline Albert

The majority of buyers report having a business continuity plan in place that covers disruption to their organisation’s supply chain, the latest SM100 poll has found.

With Japan trying to recover from the impact of last month’s earthquake and tsunami, some 61 per cent of purchasers polled said they had plans in place to deal with supply chain risks brought about by events such as natural disasters.

Gary Moore, commercial and procurement governance manager, at BAE Systems Integrated System Technologies, said: “Business continuity is covered cross-functionally within the business and underpinned by functional plans. So we have one owned by procurement and annual exercises to check its application, plus we also measure the business continuity maturity of key suppliers. Our plan has been tested, as you’d expect, by real events in the past 12 months. Last year we ran plan activities in response to the Icelandic volcanic cloud disruption and this year for the Japanese natural disaster.”

One purchaser at a high-street bank, said: “Business continuity management (BCM) in our supply chain is critical and it is a pre-requisite that all suppliers providing medium or high-risk products or services have a BCM plan in place, which we reserve the right to audit and test.”

Martin Wakelin, purchasing director at Trelleborg Sealing Solutions, said the company has always kept a business continuity plan, and it has been more frequently updated in recent times and, in some cases, applied. “We are actually beginning to enact some of the provisions made. Global management of material availability, global coordination of communication to suppliers in Japan, etc,“ he explained.                 

Tom Woodham, a supply chain consultant at Crimson & Co, said his company had seen a marked increase in clients wanting to work on supply chain risk management.

Other procurement professionals admitted that, despite having plans in place, they were not as effective as they should be. And it is significant that 39 per cent said they do not have a business continuity plan, although some said their interest in risk-mitigation strategies had been heightened by Japan’s natural disaster. One senior buyer, who did not want to be named, added: “Business continuity is creeping up the corporate agenda, particularly with the Japanese earthquake, tsunami and radiation hazards all in one.”   

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