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Business continuity for the manufacturing sector

The financial cost of manufacturing plant and machinery standing idle is considerable. There are the obvious tangible costs –lost production, lost sales and financial losses –but also intangible costs such as lost customers, reputational damage and the opportunity cost of business resources being diverted to deal with the problem.

Manufacturing today is much less vertically integrated, with global supply chains and manufacturing practices tending to be based on holding low or zero stocks of components. This may have reduced costs and improved profit margins, but it has also raised the manufacturer's risk profile significantly. The 2019 cyberattack on Danish shipping giant Maersk, FedEx's European subsidiary TNT Express and thousands of multinationals, demonstrated the vulnerability of global supply chains to disruption.

When it comes to business continuity for the manufacturing sector, it is essential for manufacturers to look beyond the boundaries of their own organisation along the supply chain to identify critical suppliers and put contingency plans in place to mitigate their exposure. Having several suppliers able to supply key goods or services is obviously one way of spreading risk, another is to focus on logistics and predetermine alternative supply routes. (Business interruption insurance is no substitute for business continuity planning - it will not prevent or mitigate a business interruption but merely compensate firms after the event).

Equipment is another key dependency for the manufacturing industry. Replacing specialist machinery involves long lead times and, typically, is extremely expensive. Added to this, the specialist nature of manufacturing equipment means the pool of potential suppliers is usually very limited. Practical solutions include taking out fixed maintenance contracts to ensure critical machinery is kept in good working order and holding stocks of vital spares.

Manufacturing business continuity expertise

Our consultants can help manufacturing companies develop business continuity strategies to improve:
  • Manufacturing plant resilience
  • Their ability to handle strikes (Workforce Continuity Management)
  • The availability of their distribution channels

Contact us to discuss how we could help your organisation.