It is just over one month since Iceland’s volcano, Eyjafjallajokull, took the world largely by surprise and caused massive disruption to air travel and air freight. So what lessons can we learn from this and how can we apply them to our contingency planning?
Perhaps we should start with the question “Do we have a business continuity plan at all?” If the answer is “No” this must surely be a call to action. If it is “Yes” then “Did it contain the right contingency plans for this event and did they work?”
There are probably few UK organisations with a specific plan for volcanoes and that is understandable but it doesn’t let us off the hook. The consequences could have been caused by any number of events so they should have been foreseen and planned for.
Terrorism, adverse weather, earthquakes and strikes all have the potential to disrupt transport systems with knock-on disruption to supply chains, travel arrangements and prolonged absence of staff stranded abroad. Contingency plans for those events would work just as well for the consequences of a volcano.
Government continues to review the level of ash content in the air which determines whether airways are to be closed. It has been increased twice since the eruption which caused the first week of closures, first by ten-fold and then doubled again yesterday. It should follow that we are much less prone to air restrictions going forward but there is no certainty of this.
The intensity of any repeat eruption and the strength and direction of the wind will still be major determinants. Three of the four known eruptions of Eyjafjallajokull have been followed by the eruption of its neighbour, Katla, which scientists suggest could be within months to a year and much more severe.
Interestingly, the bookmaker, Paddypower, is currently backing Katla as the next volcano to erupt with odds of 9/4.
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In any event, we know that we can’t control a volcano, that safety will take precedence over commerce when decisions are being made by those in charge and that any disruption to air travel will put instant pressure on land/sea transport services and cause a build-up of pressure on air services as and when they resume. This problem looks to be with us for some time so firms which are dependent on airlines should examine how they could mitigate the impact of delayed or cancelled air services.
Those in the airline business with the most extreme safety and commercial considerations should already have responses embedded in their management processes. For those outside the industry there are no simple or uniform solutions because each will have its own particular concerns.
However, when facing a potential crisis, they can and generally should adopt a common approach. Disruption should trigger the assembly of a crisis team charged with managing the event, aware of the point at which delays become critical and what options are available. Can outbound or inbound consignments be delayed or re-routed? Can alternative transport methods be quickly up-scaled? Can goods be sourced from alternative suppliers? Should reserve stocks be increased? Every firm must find its own answers to these questions and attempting to answer them in the heat of the moment without any advance planning or a dry-run at managing the event will almost certainly guarantee a poor outcome.
Just-in-time supply processes bring the benefits of closer relationships with suppliers and the reduced need to hold stocks. However, they also create the potential for much quicker disruption if the supply chain is not resilient. For it to be resilient, firms need to understand all the links in the chain and the risks to their suppliers. A risk audit on suppliers should reveal their financial stability, operational capability, the level of their own stocks and, of course, the resilience of their transport systems. Dependency on any single supplier carries obvious risk but it is not automatically extinguished just by having multiple suppliers. If they can both be affected by the same disrupted air services, we are clearly back to square one so a better solution must be developed.
For the executive who is stranded abroad, the mobile phone and internet now make remote-working much easier than before. Some advance planning can increase the opportunity for executives to work effectively and keep involved while plans for repatriation are made. If no workplace is available, a laptop computer with mobile internet is more convenient and secure than an internet café or the computer at a local bar. Internet phone services are cost-effective and there are a growing number of web platforms for conferencing and crisis management. So what is left that cannot be safely conveyed by the internet? Subscribing for the services of an emergency support organisation via travel insurance arrangements would be a good idea and, for those who need access to internet banking, make sure to carry any passcode-generating device that is needed to access banking facilities.
In just a few weeks we have experienced the drama of a volcano, worries about currency collapse, a complete change to the political landscape and now the prospect of economic stringency. These are not good times to be caught out by the unexpected. The application of some management time in contingency planning looks more than ever to be a very wise investment. There is no shortage of advice and support tools to ease the task and speed the process.
If you are interested in preparing your own Business Continuity Plan or simply looking for some advice, please click here to contact us now. We can at a relatively low cost give access to a competitively priced online Business Continuity planning solution.
Many thanks to Joe Aspey – MD of Risk Analysis Services Ltd for the above content
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