This is the second part of a 9-part series on 9-key strategic business areas that are vital for the continuity of services and operations.
Supply chains are critical for your business regardless of whether you interact directly or indirectly with them.
Direct vs. Indirect Supplier Interactions
Direct interaction means that your business processes are heavily – or even entirely – dependent on your suppliers providing you with the materials or services needed for you to remain in business.
Retail stores that depend on goods being delivered to the store.
Organizations that depend on 3rd party human resources to deliver projects or to monitor technology.
Raw metals for your organization to produce machine parts.
In April 2020, Harvard Business Review published an article about introducing stress tests for supply chains to determine key metrics such as:
Time to Recover (TTR) - the time it would take for a particular node in the supply chain (a supplier facility, a distribution center, a transportation hub) to be restored to full functionality after a disruption.
Time to Survive (TTS) - the maximum duration that the supply chain can match supply with demand after a facility disruption.
These stress tests are similar to those introduced for banks after the 2008 financial crisis and we agree they need to be done.
But what about indirect supplier interactions?
Indirect interaction means that your business processes can continue without a supplier for a certain period of time before there is an impact to your business.
A call center team that can continue taking calls until there is a hardware malfunction or telecommunications failure.
A business that is dependent on security organizations to protect or monitor physical properties or processes (e.g. cash handling).
Businesses such as landlords, credit lending agencies, and gyms that have a pre-authorized debit plans with their customers.
Even if your business is 2 or 3 levels removed from your suppliers you still need to assess the resiliency of these suppliers and how their loss could affect you.
Assessing Indirect Suppliers
How do we assess indirect supplier dependencies and impacts?
One way is by applying our Genesis Resiliency Agile user stories method in a specific tabletop scenario that is relevant to you and which could cause significant impacts to your organization.
We provide inbound call center services for other organizations and have contracts to handle 80% of the daily call volume of our clients.
Indirect suppliers on whom we depend have failed, affecting our ability to meet our contracted agreements.
Consider the perspective of our client (or user)
The expected benefit for the client is that we will always meet the 80% daily call volume requirement.
Go through a process of Agile user story writing
Identify blind spots in your continuity planning process and document corresponding strategies (or outputs) that mitigate the risk to our user. These outputs may include:
Developing co-location assessment strategies to ensure that our staff are on different hydro grids or have different internet service providers to mitigate against single point of failures.
Arranging continuous hiring, training, or re-skilling initiatives to meet user requirements.
Establishing a business process improvement strategy to initiate meetings with our suppliers on a regular basis if their services change (e.g. due to the pandemic).
The Genesis Resiliency uses a method of Agile user stories to strengthen a businesses understanding of indirect supplier resiliency. Additionally, through the conversations and resulting outputs (or strategies) our method generates, we improve your business continuity planning processes, safeguarding your organizations interests and those of our local, regional & global communities.