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Supply Chain Sarbanes-Oxley Corporate Governance for Supply Chain Operations |
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CORE CONCEPTS Internal / External Supply Chain
SUPPLY CHAIN GOVERNANCE
SECURITY & CONTINUITY
LASTING THOUGHTS
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Disaster Recovery vs. Business Continuity
While the definitions of these two terms would seem clear, these terms are often used interchangeably and thus incorrectly. Disaster recovery is reactive - when disaster strikes, how does an organization get back on its feet. This does not necessarily imply continuing operations; more appropriately, business has ceased to function and reacting from a disaster brings us to the point where we can start conducting business again in a limited capacity until full operations can be restored. Business continuity is the proactive planning on how business will continue through a disaster. Depending on the business continuity plan, operations may be able to continue at a greater capacity than just "limping along". As we have discussed Risk Identification and Risk Assessment we now look towards risk management: how does the organization handle and mitigate the risks it faces. When a particular disaster strikes, how will our organization continue to operate. The failure to bring integrity into internal & external supply chain operations leaves them more exposed and vulnerable to risk, and thus forces the organization into more of a disaster recovery mode than a business continuity plan each time a disaster strikes. This is similar to "management by exception" as opposed to "exception management". One result is what should be small problems often manifest themselves quickly as disasters. Sarbanes-Oxley compliance looks at the ability of an organization to maintain operations in order to create timely and accurate financial statements. Continuity will require a team effort, regardless of which supply chain - the internal or external - is affected. However, brining employees together to get business operating again is different than doing so with suppliers of raw materials, purchased parts, services, etc. The failure to treat suppliers as valued partners may have the unfortunate result of extending an organization's downtime. After all, why should a supplier lend a hand to a customer who treats them so poorly when the supplier has other (good) customers to service? We speak more on this in Supply Chain Code Of Conduct.
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