Adopting a Business Continuity Plan: Case Study

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This case study has been provided by Inoni, a provider of essential business continuity consultancy and software for analysis, planning and measurement. Find out more about Inoni.

Introduction

The client operates a chain of cafes, with outlets throughout the UK. Much of what is sold is made by them.

The main bakery and administrative centre are sited in one interconnecting complex. The business has a number of other production units around the country. Some of these are part of a retail outlet, while others are production sites only. About 40% of production by sales value comes from the main bakery. There is a main distribution centre located close to the head office/main bakery, supplying raw material for all the cafes.

It is this concentration of risk that led to the client’s insurers requiring them to create a Business Continuity Plan. Inoni were contracted to undertake the project.

Their challenges

The high dependence on the main bakery coincides with some high risk baking processes. The physical risk mitigation was reviewed by insurers, leaving us to establish improved business resilience, primarily in relation to maintaining productive capacity.

This is a fast-moving business, with each café requiring delivery of fresh product every day. Pressure is increased by the requirement to maintain the highest food safety standards.

The centralisation of administrative functions such as finance, sales and marketing, quality control, supply chain management and raw material procurement adds to the production issues should the building be destroyed. Inoni needed to establish alternative offsite arrangements to ensure the ongoing management of the business.

The solutions

The existence of other bakery facilities provided flexibility to deal with a production outage. Working with the Head of Production, Inoni created a matrix of alternative production facilities to take up a loss of the main bakery.

Each main product line produced at the main bakery was allocated to a specific other site. The process equipment is standard across the business and recipes and specifications are held on the main system, which is hosted remotely and accessible from all the main sites.

Some reorganisation of the supply chain from the main distribution centre was required in drawing up the plans.  In most cases, the other production sites had spare capacity, so extra shifts could take up additional production. Local staff would be assisted by relocated main bakery staff.

When Inoni analysed the business, they established that each café was set up to be partly self- sustainable. This required supply of raw material from the main distribution centre or from their food wholesalers. Ordering was made direct by each café. It was found that approximately 50% of revenue came from these arrangements, principally tea, coffee and cooked breakfasts. This revenue stream would therefore be able to carry on, irrespective of any loss at the main bakery/head office.

On review, it was judged that these alternative arrangements could maintain the business for many months, while reinstatement work was undertaken.

The loss of the head office administrative centre was planned to be relocated to the main distribution centre along with essential staff.  Backup servers were installed there and it was fitted out to accommodate the required number of people.

Key personnel were established based upon the business- critical activities identified in the Business Impact Analysis. These included order processing, finance and procurement.

Valuable outcomes

The Production Matrix was particularly useful, as it identified ways of managing the day to day production glitches, as well as catastrophic losses. In a similar vein, the workaround arrangements for the savouries production allowed them to free up much needed space in the Main bakery.

The business is in massive growth mode and our analysis provided senior management with a framework to re-organise production for maximise output with minimal additional capital expenditure.

Key takeaways

  1. In the case of businesses with two or more sites, there are opportunities to relocate key functions. In this case, a viable range of alternative production capability was developed using the clients existing facilities. Also, an alternative admin site was flagged up using the Main Distribution Centre.
  2. Analysing product lines on a case by case basis enables specific recovery strategies to be generated. E.g. the breakfasts, tea and coffee were not dependent on HO.
  3. Process and business improvements arise from the Business Continuity Planning (BCP) process. In this case, the savouries recovery strategy turned into a permanent solution.

The right insurance

Working with Kerry London we understand the challenges faced by businesses as well as understanding how insurers like to reduce risk through various different methodologies. Whilst the risk is reduced it is still vitally important that each site is analysed frequently & represented correctly within the business interruption section of an insurance policy.
 

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How resilient is your Business Continuity Plan?

We have formed an exclusive partnership with Business Continuity Planning (BCP) experts Inoni Ltd. To receive a complimentary health-check of your business continuity plan, worth over £500 – without risk or obligation – please visit our Business Continuity Health-check page.

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Take advantage of our exclusive partnership with leading Business Continuity experts Inoni, and receive up to £1,000 worth of Business Continuity consultancy and services. To learn more, visit www.kerrylondon.co.uk/bcp, or email us at bcp@kerrylondon.co.uk

Disclaimer

Whilst every attempt has been made by Kerry London Limited to ensure that the information contained within this document was correct and accurate at the time of publication, Kerry London Limited accepts no liability for decisions based solely or in part on the information contained herein. You are advised to seek appropriate professional advice before making any change to your Business Continuity Plans.
 
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