By Lester Lai, National Risk & Surveying Manager
Back then, the company’s approach to risk was very reactive and tactical. Whereas today Green’s has one of the best Business Continuity Plans (BCPs) our team has seen, with detailed Operational Recovery Plans for each plant that include alternative suppliers and prescribed response mechanisms for a variety of potential business interruption scenarios.
The company’s Glendenning Plant Operational Recovery Plan has been called into action on numerous occasions over the past few years, most recently in the wake of the 2013 Philippines typhoon when Green’s coconut chip supplier was wiped out.
In 2010/11, the plan helped the company stage rapid recoveries from three separate and very different business interruptions:
- A strike at a key packaging supplier
- Interruption to supply of a key ingredient following the Queensland floods
- A product recall when a piece of wire was discovered in a private label cereal.
Group Operations Director Greg Ayers, who joined Green’s not long after I completed that first survey, estimates the Operational Recovery Plan helped the company save at least a million dollars in that one year alone.
So how did Green’s transform in such a short space of time from being a company with an ad-hoc lackadaisical approach to risk management to a highly strategic and sophisticated operator?
Ayers says a scathing Industrial Special Risk (ISR) report and escalating premiums prompted the company to review its risk management strategies.
“As time went on, we found ourselves increasingly aiming for best practice,” says Greg. “And we became increasingly sophisticated in the way we manage risk to the point where we now address everything from currency hedging to IT disaster recovery, customer diversity and key employees.”
What many people don’t realise is that the cost of Business Interruption claims can be significantly higher than the corresponding Property loss. An effective BCP is essential for any manufacturing company because it enables staff to respond effectively and quickly in a crisis to minimise potential losses and reduce the risks of irreparable reputation damage.
So how do you go about creating an effective BCP for your business?
While you can write a basic plan in-house, engaging a BCP consultant will help to ensure your plan is both robust and contains the necessary level of detail to be effective. Depending on the size of your operations, BCP consultancy fees can range from a couple of thousand dollars to tens of thousands.
Green’s engaged a BCP consultant but did a lot of the data collection in-house, which helped to keep costs down and ensured the end result was very practical.
And it goes without saying that you need to review the plan periodically – to ensure all details are up to date – and verify your back-up plans (e.g. agreements with alternative suppliers, where to source replacement equipment etc.).
Greg says the great thing about the Green’s BCP and Operational Recovery Plans is that they enable teams to cut through the stresses in a crisis situation and respond in a pragmatic, quality-thinking way.
“Our plans provide a roadmap for people’s roles and responsibilities,” says Greg. “This ensures all the relevant boxes are ticked in a structured and disciplined manner in a highly stressful situation.
”How you handle a crisis situation can have some unexpected wins. For example, we worked so effectively as a team to rectify the metal recall incident that the client ended up awarding us new business.”
Great business continuity planning gives Green’s a competitive edge