Business Continuity in Supply Chain Management

Topics: Business continuity planning, Management, Supply chain management Pages: 12 (2365 words) Published: July 31, 2014


Purpose of Study:

As a small business owner and potential retail management executive, the

availability of products and services are vital to business operations. The occurrence of

major disasters have hindered and stopped business functions for many businesses. The

information reported in this paper could be useful to small business owners or anyone

interested in a career in retail or perhaps customers.

Opening Statement:

The Supply Chain in the Retail sector is as important as Customer Service,

Human Resources, Sales Management, or Credit Services; if products aren’t in the store,

there is no business. Businesses need smooth and uninterrupted access to vendors,

suppliers, designers, distributors and customers.

Findings:

Business Continuity Planning is becoming increasingly important to the success

and sometimes survival of any business. Disasters, man-made (9/11 terrorist attacks) and

natural (Hurricanes Katrina and Sandy) have shown the need for planning for the

unexpected and uncontrollable. Even online retailers such as Amazon, depend on smooth

and reliable delivery of their products from their suppliers, and delivery to their

customers.

Supply chain management relies on many things; efficient and accurate logistics,

competent, dedicated staff members and equally important, strategic planning. All these

things and more contribute to continued business operations in the event of disaster.

Major retailers like Sears, Macy’s, Home Depot or Wal-Mart are stores that customers

depend on for the bare necessities used during and after a disaster.

Any part of the supply chain can be outsourced, this transfers liability for that

product or service, however the risk cannot be outsourced. There are increasingly more

risks to the company within the supply chain, due to streamlined supply chains. Retailers

are always at risk of being associated with a vendor or supplier accused of inappropriate

corporate social responsibility issues such as child labor exploitation or health and safety

concerns. Mitigating these and other risks should be the main concern of the Business

Continuity Manager. Outsourced operations are generally a higher risk because they are

not aspects that a Business Continuity Manager can readily oversee, thereby creating new

challenges. (Hiles, 2011, p. 314-15)

A few of the issues the BCM face are as follows:

Outsourcing, more companies are concentrating on their core activities and

outsourcing other aspects of the business to product or service specialists.

Products have shorter lifecycles which requires suppliers to speed production and

distribution.

Supply chains are longer and more complex, specialized products can require

hundreds of different parts, each supplied by different companies. Any failure by

one or more of the interdependent companies in the supply chain can create a

domino effect. (Hiles, 2011, p. 315)

¨Customers have become more demanding and want a shorter turnaround on their

products…. Customers, when they have made a purchase, want their goods as

soon as possible.” (Hiles, 2011, p. 315)

In addition, there are a number of categories of supply chain risk. They can include,

but are not limited to legal issues, technical issues, political reasons, economic

reasons, environmental issues, or social issues. For instance, Sears has a Global

Compliance Program for Merchandise Vendors and Factories. As a part of their

Corporate Governance, this compliance program is to ensure that all Sears Holdings

production facilities operate within compliance and legal guidelines that affect issues

like child labor, wages, health and safety or factory security. Each location is

accountable to a set of employment principles referred to as the Global Compliance

Program Requirements. The requirements must...

References: Benyoucef, M., & Forzley, S. (2007). Business Continuity Planning and Supply Chain
Management. Supply Chain Forum: An International Journal, 8(2), 14-22
May 18, 2014.
Fernandes, R. A. (2011, March 16). Supply chain management and business continuity.
Retrieved May 16, 2014, from http://www.continuitycentral.com/feature0865.html
Hiles, A. (2011). The Definitive Handbook of Business Continuity Management (3rd ed.).
Hoboken, NJ: Wiley.
Kildow, B. A. (2011). A supply chain management guide to business continuity. New York:
American Management Association.
Nash, K. S. (2012, February 20). How to Find Weak Links in Your Supply Chain. Retrieved
May 19, 2014, from
Business Continuity & Emergency Planning, 6(3), 222-227. Retrieved March 27, 2014.
Sanders, S. (2014). [Personal Knowledge]. Unpublished raw data.
Sears Brands, LLC. (2014). Corporate Governance. Retrieved May 20, 2014, from
http://www.searsholdings.com/govern/compliance.htm
Supply Chain Management. (2012, February 21). Retrieved May 23, 2014, from
http://cmuscm.blogspot.com/2012/02/pareto-analysis-for-supply-chain-using.html
Wright, J. (2013). Taking a Broader View of Supply Chain Resilience. Supply Chain
Management Review, 17(2), 26-31.
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