Spend Matters welcomes this guest article by Diptarup Chakraborti, AVP Marketing, Zycus.
This is the second in a series of articles produced by Zycus dealing with the impact that natural disasters can have on the procurement function. The first article in the series, which outlines the inherent vulnerability of our supply chains, can be found here. Today we are looking at the steps that procurement professionals can take to minimize the impact of natural disasters on their internal operations.
An Ever-Present Danger
The threat of natural disasters is as real as it is unpredictable. Our organizations, and indeed our procurement teams, simply must understand the threat disasters pose and ensure that they are adequately prepared to deal with them. Below is a list of considerations and steps that procurement teams should look to implement internally to minimize their exposure to the harms and disruptions of natural disasters.
In order to properly prepare a disaster plan, you must first identify and understand the risks that such an event could present for your firm.
Carrying out a detailed risk assessment of your internal processes will quickly highlight areas of critical vulnerability in your organization’s operations.
Your analysis should move beyond spelling out the physical risks to your internal operations to include analysis of the political, infrastructure and economic landscapes that your organization is operational in. These considerations will be the vital factors that will impact the time taken to get your business back online.
Creating a Disaster Management Team
Understanding the risks within your operations is one thing. Having the organization, funding and preparedness to be able to respond proactively when disaster strikes is something else all together. That’s why the next step in your disaster-planning program is to establish a disaster management team.
Your disaster response team should develop a hierarchy of criticality that outlines the order of work that needs to be done in the event of a natural disaster. By prioritizing critical suppliers, products and internal processes it is possible to minimize the impact of a natural disaster and extradite the recovery process.
The greatest benefit an organization can gain from defining a disaster response team is the crucial time that is saved in the moments after the disaster has struck. If your organization has a team that is well versed in what to do during an emergency situation, the level of panic, post-disaster will be minimized and your team can get on with the important steps of managing the situation.
It is critically important that everyone within your organisation knows and understands the role of the disaster management team. It is imperative that when a disaster strikes, this team takes the lead and others within the organization follow the predetermined disaster response plan.
If they are to be successful, disaster response efforts require a co-ordinated “whole organization” approach. In order for this to be effective, people need ready access to data and information.
By centrally storing all procurement data, technology solutions enable your organization to optimize its response to disasters. Without adequate technological support responses to the disaster are likely to be ad hoc, panic driven and may result in duplication of work or, worse still, taking improper actions.
Companies that run integrated procurement technology solutions are able to quickly build a picture of the disaster and the impact it will have on their operations. The fact that they can pull reliable data in real-time allows procurement professionals to make more informed decisions during in these critical moments. Technology also enables firms to launch and manage responses across geographies, by facilitating collaboration between team members in different locations.
Organizations that understand the risks within their business and have established an internal disaster management team that is supported by intuitive procurement technologies are undoubtedly best placed to minimize the harm and business disruption caused by natural disasters.