Supply Risk: Preparing for the Worst

Michael Lamoureux sat in on a supply chain conference last week and has been posting insightful tidbits over at Sourcing Innovation based on his learnings. Perhaps his most useful observations came out of his notes from a session led by Shell Oil Canada on Business Continuity Planning. As a strategist who has spent a good part of his consulting career working with clients on scenario-based analyses -- in supply chain and beyond -- I always find Shell's perspective on planning fascinating, as they pioneered the concept of scenario forecasting many decades ago. In other words, you can be sure that whatever they say regarding continuity planning is industry leading and based on decades of scenario-based experience.

Among other areas, Michael's notes from Shell suggest that companies consider the value of creating a business continuity plan as such an effort "only cost pennies on the dollar and will deliver a ROI many times what it cost to prepare in the event of a disruption". In addition he suggests that top customers of a company should demand such a level of preparedness given that they "should only work with you, or stay with you, if they know you can recover as fast as they can in the event of a major disruption." I agree, but here's a further thought: what about a supply risk or business continuity planning certification -- maybe industry based -- similar to ISO or TS from a quality perspective. Any takers?

Jason Busch

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