It is reality that BCM (=disaster recovery) and SCRM are typically established as separate practices. The existence of either one doesn’t necessarily require the existence of the other one.
Statement of Interdependency between BCM and SCRM
Under the umbrella of ERM:
Following the statement the ideal strategy and structure becomes obvious. The entire Risk Management activities in an organization should become a “Central Management Institution” (CMI), headed by a Manager who reports directly to the board or might be part of the board. Positions as Chief Risk Manager, Chief Risk- and Performance Manager, Chief Enterprise Risk Manager come to mind.
In consequence all Risk Management and Risk Management related activities, e.g. BCM, Quality Management etc. become part of the CMI.
Risk Management in its pure sense has become significant in any organization of any size and in any industry. Admittedly the importance of Risk Management might vary in the various industrial sectors and in its correlation to the size of an organization.
Risk Management in its pure sense has also become significant in all Business- or functional Units of an organization, e.g. in Procurement, HR, IT, Research and Development, Production, Marketing & Sales etc.. Regarding to its importance Risk Management became quite equally valid for any of those Units.
Since our focus is on Supply Chain Risk Management a look at a typical supply chain and the experience of risk potential along a supply chain explains quite simple that in case of occurring risk events Business Continuity Management could be executed immediately. It becomes obvious:
Fig1: Supply Chain Scenario
In such a supply chain process an alert should be send from the SCRM-System to the BCM-System at the earliest time possible in order to get the responsible people at the BCM-Team alerted and getting ready to act. This earliest moment is whenever a relevant risk event occurs and is captured from the SCRM-System and becomes visible on the Risk Radar (Monitor). From this early moment on the BCM-Team can use further information from the SCRM-System.
The team members of a BCM-Team have mandatory to be users of the SCRM-System!
Components of BCM
A solid BCM solution is based on best practices, a state of the art methodology and supported by state of the art software. A BCM solution includes the following components:
Fig2: BCM Process Cycle
Components of SCRM
A solid SCRM solution is based on best practices, a state of the art methodology and supported by state of the art software. A SCRM solution includes the following components:
Fig3: SCRM Cycle
SCRM and BCM integrated
SCRM and BCM as an integrated process finally provide a significant complex in Enterprise Risk Management. The integration of SCRM and BCM completes the Risk Management from:
Fig4: Interaction BCM & SCRM Cycle
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