Electronics company to include suppliers in continuity plans

18 October 2011

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18 October 2011 | Adam Leach

Japanese manufacturer Renesas Electronics is redeveloping its business continuity plan (BCP) to factor in its entire supply chain in case another disaster strikes.

The earthquake that struck Japan on 11 March caused severe disruptions to the company. It was forced to suspend activities at eight of its factories, effectively halving its capacity. Its existing BCP enabled the company to resume production at its factories by 6 June, however delays and disruption have continued in its wider supply chain.

Its CSR and Environmental Report 2011, released yesterday, said: “One of the most important lessons we learned through the disaster was that we must establish a flexible structure to enable efficient information sharing and alternate procurement and production, not only for the Renesas Electronics Group, but also for the entire supply chain. And such a structure must be realised through the synchronisation of BCPs of all parties in the Renesas Electronics Group’s supply chain.”

In order to strengthen the supply chain’s ability to continue operating and recover when disruption occurs, the company is sharing information and working with its suppliers to create an all-encompassing BCP. In addition, following its merger with NEC Electronics, it is developing an “alternate production network” to bolster its capabilities to cope with unforeseen external events.

The revised strategy, echoes the findings of the OECD Future Shocks Report, published in June. It said: “Once a disaster strikes it is too late to create effective plans to cover the fallout for production, employees, reputation, supply chains or service disruption. Contingency plans for a broad range of adverse event scenarios must be in place, and they must build in flexibility to account for unknowns that can generate extreme events.”

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