Business Continuity and Crisis Response Planning

Trend Definition 

What is the essence of this trend? What is its impact? 

• Essence: Business Continuity Planning (BCP) is a strategic approach to proactively identify, assess, and manage both internal (e.g., network outages) and external risks (e.g., wars) to operations while Crisis Response Planning (CRP) aims at ad-hoc measures in threatening situations
• Impact: BCP and CRP help to prepare for and quickly react to disruptions, maintaining operational continuity and minimising financial losses and risks

Trend Drivers 

Why is this trend emerging now? What’s changing? 

• Surviving: Continuing business also following a disaster can be material for companies since they keep their reputation and their ability to serve customers in challenging times
• Global Supply Chain Disruptions: Complex global supply chains increase the vulnerability towards disruptions which indeed occurred more often in the past and are possible to occur in the future as well
• Cybersecurity Risks: Advancements in technology have led to increased cyber threats, such as ransomware attacks and data breaches, that have high impacts on organisations due to the digitalisation

Use Cases 

How to apply this trend? 

• Crisis following Media Reports: Quickly respond to negative reports regarding procurement practices 
  Example: Following accusations of child labour in its procurement, Apple took immediate action with its suppliers and industry peers to tackle systematic problems with violations of codes of conduct
• Cope with diverse Crisis Situations: Ensure operational abilities through BCP 
  Example: Johnson & Johnson’s management developed a very resilient BCP that helped them navigate through several severe crises, for instance, by including external suppliers in their preparedness plan

Procurement Relevance & Response Strategies 

How should Procurement adapt its Processes, Organisation, and Strategy?

• Prevention of Sourcing Outages: Prevent drastic outages by sourcing the inputs from multiple suppliers and risks to mitigate the risks of outages at the end of one supplier
• Establish Task Forces: Task forces consisting of procurement team members and other vital functions, such as finance or logistics, can help make the needed fast adjustments to procurement processes