Organizations soon recognized that the potential for disaster extended far beyond the data processing center. Contingency planning started to develop a more universal quality. Often, the first response to this realization was the establishment of some sort of central planning authority.
Progress of these central planners towards a goal of universal planning, however, was often stopped in its tracks by the enormity of the task. As a result, these planners started to take on the reputation of engaging in much thinking about planning, but very little "doing".
For many important perils planning at a central level makes sense. Windstorm and earthquake perils can reek their havoc uniformly across an organization. Proper response to these global perils requires a wide reaching and cohesive approach. Even in these cases there will be response modes unique to various facets of the organization. While overall coordination is necessary, the idea that the planning effort be completely directed by some central authority is what ultimately leads to overloaded and, hence, ineffective planning organizations.
Modular planning helps relieve the central planner of the burden of "doing it all". Details of planning for specific areas, each faced with unique perils and recovery challenges, are left to the personnel in those areas. Modular planning for contingencies becomes part of the operating procedures of that unit. As with other business functions within the unit, a leader, chain of command (with responsibilities) and a written plan are required. Modular planning units are usually identified by having specific functions for which the organization depends on for continuity.
Under a modular approach, the central planners duties become more those of a coordinator and guide. The first task of the central planner is to identify modular plans that may already be in existence. It is not unusual to find efforts of various degrees of sophistication already under way in many critical parts of the organization. Power generation and distribution facilities within organizations have traditionally been strong planners, recognizing the vulnerability and importance of their operations. Likewise, managers of raw materials have of necessity become avid planners for contingencies. We have already mentioned electronic data center responses.
While all these various entities may have plans in place, these plans will certainly vary in quality. This is where the central planner's input can be very valuable. The central planner can act as a repository and disseminator of state-of-the art information on effective contingency planning. For example, the creative use of computer technology has become a considerable aid to the contingency planning process. Computer programs exist that provide easy to use templates for constructing plans and storing important plan information. The central planner should be aware of this technology, assess the most effective forms of this technology for his or her own organization, and make these various technologies available to the organization's planning modules. By taking advantage of site licensing arrangements and other such "volume buying" discounts for available computer tools, the central planner can also assure that the organization utilizes this technology in the most cost effective manner.
After identifying those entities that do have contingency plans, the central planners next task is to identify those that do not. This identification process need not encompass the entire organization, but only critical entities. Once identified, the planner's job becomes one of educating these entities on, number one, the importance of these plans, and number two, how to plan. Again, the central planner's expert knowledge of planning methodologies and available tools come into play.
The ultimate goal of the central planner in a modular environment is a well thought out and coordinated effort among critical parts of the organization. Responsibility for effective planning at the micro level rests squarely with the operational units, or modules, within the organization. The education of potential planners in the "how's and why's" of planning, and the coordination of the plans that result is the purview of the central planning authority. This segregation of duties among central planners and their modular counterparts allow each to concentrate on what they do best. By working together in this fashion, an organization is assured effective plans will be in place should disaster strike.
Disasters can have humble origins. The most dramatic are widespread calamities, like windstorms and earthquakes. More often then not, however, the causes of disaster are simple. Among these, one of the most troublesome is the loss of a machine or machines that are critical to a production process. Sometimes, the loss of one machine can shut down an entire plant, or even the organization itself. Here, simple modular planning can save the day.
Modular planning is a natural fit for a modern process known as cell-based manufacturing. Here, related manufacturing processes form a cohesive unit, or cell. Planning and control of most aspects of cell based operations comes from those individuals that work within the cell. The operators, in this sense, control their own fate. Their rewards depend on how successful they are. Traditionally, cell based manufacturing groups have focused on production planning, scrap reduction, effectiveness of work plans, overall product quality and even safety of the workplace. Planning for disasters is a natural adjunct to this process. In most cases, these operators know their processes best. They have an intuitive feel as to where to turn in the event of various contingencies. Cell-based modular contingency planning helps harness this intuition.
Cell-based planning proceeds like any other contingency planning effort. The first step is usually some sort of risk analysis that identifies hazards, their likelihood and consequences. This risk analysis is most effectively carried out using scenarios: Here's what bad things can happen. A comprehensive scenario-based risk analysis then serves as a foundation for contingency plans. The central planning authority would be responsible for disseminating "how to" information on scenario-based risk assessment methods, such as the use of flow charts and event trees. A further aid to planning is the "mapping" of potential risks onto a chart whose axis represent the probability and consequences of potential disasters. Such charts allow the planning group to focus their planning efforts.
Once scenario-based plans are developed they have to be put into a written format that can be easily disseminated. Many of these plans are compiled and stored using electronic computers. Computer generated and maintained plans offer the planner many efficiencies. Revisions are easy to make, as expansions of operations or other circumstances require. Computerized plans can also incorporate planning data from other electronic sources, such as machinery inventories, lists of vendors and phone listing of critical employees. Stored in this computerized format, plans can be easily shared with other interested parties as needed.
The role of the central planner in coordinating cell-based plans is important. To be truly effective the synergies among modular plans must be captured. Where do the plans of one group fit into others? Periodic group meeting among different planning groups, coordinated by the central planner, are helpful. On this interactive basis among groups, an organization-wide contingency plan can take shape from the "bottom up". The central planner would also act as an advocate to senior management, in the event additional resources were needed by the groups. Modular plans can in this way be molded into a central plan whose effectiveness can be much greater than the sum of its individual parts.
The idea of a manufacturing cell can be expanded to other parts of the organization. The organizations finance department can serve as a cell, as well as materials procurement, data processing applications, shipping and even sales. Each face specialized disruption threats and need to deal with these on a detailed basis. These threats may affect just their duties, or the entire organization. The modular approach makes sure that, whatever the threat, the group will be ready.
As an example of how the cell-based focus can be expanded to fit many types of organizations, consider a firm in the business of distribution of chemicals by truck. Here, the department in charge of operation of the truck fleet would form a natural module for disaster planning and response. Their plan would be based on a comprehensive risk analysis of the scenarios facing this part of the distributors operations. These might include a cargo spill involving substantial clean up costs, a cargo fire or, worst case, a fire and explosion that may threaten the road side population. Different exposures face the manager of the company's storage facilities. A risk analysis here may trace the effects of a leak in a storage tank or tanks. Disaster response would entail both company operations and the community in which the facility is located. Last but not least, the administrator of office operations would face similar challenges. While the perils facing the office environment would not be as dramatic as those involving the transport and storage of dangerous chemicals, damage to the administrative facilities of the company could just as easily put it out of business.
While the various components, or "cells", of our chemical distribution operation could effectively develop plans for perils affecting their parts of the organization on their own, the overall planning efforts of the firm would certainly benefit from the coordinating efforts of a central planner. While the transport risk is unique, the perils affecting the storage facility would affect the nearby office area, and vice versa. The plans of these cells would benefit from coordination of actions. All contingency plans could benefit from a uniformity of technique recommended by the central planner. For example, it would not be efficient for the transport planner to have available the latest techniques of risk analysis, while the storage facility developed their assessment using crude "seat of the pants" methods.
In this way the maintenance of an effective central planning authority under a modular planning structure alleviates the fears of some planners that may believe that modular planning promotes a fractionalization of plans that may undermine effective coordination at times when the organization most needs to pull together. The potential for modular plans to contradict or even interfere with each other in times of crisis certainly exists. That is why a centralized authority is needed to coordinate efforts. With proper oversight, coordination of modular planning efforts in the face of contingencies can be easily maintained. This oversight would include proper registration of the plans and periodic reviews. Various plans could be identified in maps of the physical layout of the organization, or by process. This would provide a quick reference for plan activation and coordination as demanded by circumstances. The central planners role in this way takes on greater relevance, and importance, within the organization without the planners being overwhelmed by detail.
Key to any planning for contingencies is plan validation. That is, making sure the plan works when you need it to. Validation of complex, real-world plans can not proceed theoretically. It has to be done on the basis of systematic plan testing. Testing involves actuation of the plans in various simulated scenarios. These scenarios would include contingencies particular to the module (e.g., a machine fire), and those that require a wider span of organizational involvement (windstorm or earthquake, for example). The testing of modular plans under realistic scenarios allows us to identify weak spots within the plans, as well as further develop observed strengths.
Testing of modular plans can also proceed in an individualized fashion that can enhance the testing process. Testing plans individually allows the testing to be more comprehensive and timely than a test of the entire system all at once. While combined testing of the system is essential for making sure that the system is properly coordinated, this testing can proceed on a less frequent basis than module tests. An organization-wide test of contingency plans is invariably a large and demanding effort. We can put off coordinated testing to a once every few years basis, as resources permit, while modular plans can be tested and refreshed more frequently.
Simulating disaster scenarios in a modular environment can also help justify the worth of this approach. Consider an organization that has not engaged in formal, centralized planning in the past. The entity does, however, have independent modular contingency plans for the electronic data processing department and power distribution facility ("power house"). These plans were developed and are maintained by these individual departments. Now let us suppose an organization-wide disruption occurs due to a severe windstorm. Effective risk analysis by the data processing and power distribution groups would have anticipated such an event, and developed plans accordingly. This organization will at least have data processing backup and power. These factors alone could go a long way in preserving the continued operation of the organization in the event of a severe circumstances. The organization will certainly be better off than one that had no plans, or an ineffective central plan that suffers from lack of attention to detail.
The ultimate test of a contingency plan is of course an actual disaster. By starting down the course of modular plan building, an organization will gain the immediate comfort of knowing that at least some of the critical operations of that organization will be covered in the event of disaster. Even these initial efforts can make the difference between organizational life and death. As the modular plans expand, that comfort level will grow as well. The ultimate goal is a fully-linked modular plan. Not only are such plans eminently manageable, they also provide the best protection an organization could hope for in the face of adversity.
Mark Jablonowski, ARM, CPCU, has over twenty years of experience in risk management, response and analysis. He is currently Risk Manager for the Hamilton Sundstrand division of United Technologies Corporation, located in Windsor Locks, CT.