As part of your overall risk strategy, it is important to ensure that your suppliers have good disaster recovery / business continuity plans in place. This should be a requirement embedded in your contracts with key contract manufacturers and suppliers. It is particularly important during seasonal or end-of-quarter loaded time-frames when the majority of a company's products are shipped and profits made. If disaster happens during that window of opportunity, it is vital to rapidly recover the critical processes and infrastructure or risk losing huge amounts of revenue, profit, and shareholder value.

For example, if a key server computer of one of your suppliers dies or loses all its data, the plan and mechanisms should be in place to recover within about a day. For longer-term events like a facility out of commission (for example by fire or earthquake) there should be a plan in place to get production up and running within some reasonable window. When companies are not prepared with the right type of plan, production can take several months to resume.

Read Full Article