Business Continuity Management (BCM): Strategies and Approaches in Managing Business Continuity Risks - Toyota in Malaysia
Business Continuity Management (BCM): Analysis of select Corporation’s strategies and approaches in managing business continuity risks in relation to natural or human-caused disasters.
You are to choose any one of the following industries/sectors as your focus analysis.
Toyota in Malaysia
1. Based on your research and analysis of the chosen industry and company:
a.) Provide an overview and examples of incidences that the industry or company had faced in relation to natural disasters or other major human-caused incidences that triggered the entity / company to activate its business continuity or crisis management actions– either on a domestic (Malaysia) or global scale. (3 marks)
b.) articulate as to how the public entity or company learnt from those disasters or incidences and get itself prepared for possibilities of similar ones. Where appropriate, consider the entity’s / company’s responses to the increasing risk of natural disasters and other major human-caused incidents. (3 marks)
c.) identify at least two(2) of the entity’s/company’s objectives that relate directly to its management of business continuity risk across the group/company. Comments on its success or failures over the years that the entity / company faced. (2 marks)
d.) consider the existing business or activities of the company and provide your team’s overall view on at least two (2) of the key success factors of the entity / company in facing the increasing natural and human-caused disaster risks. (2 marks) (Total = 10 marks)
2. Assume that you and your team are given the responsibility form an aging the overall risk management function of your chosen company. Given the worsening global warming and unpredictable weather pattern hence increasing the possibility risk of natural disaster which would affect many industries and businesses including your group’s chosen industry and company, the Board of Directors and the Management wish to re-examine its approaches and strategies to make the company better prepared for any future situations. On top of the increasing natural disaster risk, various industries are also facing increasing human-caused crisis such as chemical or nuclear related disasters.
In line with the Board’s and Management instruction, you are requested to prepare and present a strategic paper to assist the Board and the Management to review the Company’s business continuity priorities and manage the emerging risks in the continuing operations of the group.
Based on the industry’s information, your team is required to develop, recommend and present in the next month’s Group Management Committee meeting focusing on the management of business continuity risk aspects.
a) For the purpose, the Group Managing Director’s Office and Strategic Management Division had requested that you and team to identify and articulate at least 5 core business continuity risk management objectives and the relevant operational considerations that may be considered by the company / group to better manage its business continuity risks. Focus your attention to the company’s / group’s infrastructure and organizational readiness. (10 marks)
b) Prepare and articulate your findings and recommendations on the chosen objectives and operational considerations to the Group Management Committee, having taken into consideration the company’s limited resources, potentially complex public affairs scenario, sensitivity of the business or company position, potential environmental impacts and other strategic considerations that have been looked at and executed in the past. (10 marks) (Total = 20 marks)
3. Despite the increasing use of automation and artificial intelligence, the risks that any company faces involve the vulnerability to people-related issues that could significantly affect its operational and business activities. In the case of current talent shortage in many business and operational aspects and made worse by the Covid-19 pandemic, a strong crisis management team is critical to ensure that the entity / company could respond and managed the situation effectively. Highlight to the management what such a team entails to in terms of its overall set-up, roles and responsibilities, as well as its importance to the company. (5 marks)
Business Continuity Management (BCM): Strategies and Approaches in Managing Business Continuity Risks - Toyota in Malaysia
Introduction
Business Continuity Management (BCM) plays a crucial role in ensuring that organizations can continue their operations in the event of natural disasters or major human-caused incidents. This essay will focus on Toyota in Malaysia and analyze their strategies and approaches in managing business continuity risks. Specifically, it will provide an overview of incidents that triggered the activation of business continuity actions, examine how Toyota learned from those incidents and prepared for similar ones, identify objectives related to business continuity risk management, evaluate the company's success or failures, discuss key success factors in facing disaster risks, and highlight the importance of a crisis management team in addressing people-related issues.
1. Overview of Incidents and Activation of Business Continuity Actions
a) Toyota in Malaysia has faced several incidents in relation to natural disasters or major human-caused incidents. One notable incident occurred in 2011 when the Great East Japan Earthquake and Tsunami struck Japan, severely affecting Toyota's supply chain. As a result, Toyota had to activate its business continuity plan to ensure the continuity of operations in Malaysia. The disruption in the supply chain led to a shortage of parts, impacting production and delivery timelines.
b) Toyota learned from the 2011 incident and implemented measures to better prepare for similar situations. They established stronger relationships with suppliers and implemented a more robust risk management system to identify potential vulnerabilities. They also focused on diversifying their supply chain to reduce dependency on a single source. In response to the increasing risk of natural disasters and other major incidents, Toyota invested in advanced technologies and systems to improve the resiliency of their operations. They also conducted regular simulations and drills to test their preparedness and identify areas for improvement.
c) Two objectives that Toyota in Malaysia focuses on relating directly to the management of business continuity risk are:
i) Ensuring a resilient supply chain: Toyota aims to establish a supply chain that can withstand disruptions caused by natural disasters or other major incidents. Over the years, Toyota has made significant progress in enhancing the resilience of its supply chain through improved risk identification, supplier relationships, and contingency plans. However, there have been instances where unexpected events have still resulted in production delays, indicating room for further improvement.
ii) Minimizing operational downtime: Toyota strives to minimize downtime during crises to ensure continuous operations. While they have made efforts to improve their response mechanisms and implement backup plans, there have been instances where the company experienced temporary shutdowns due to unforeseen circumstances. These instances highlight the need for continuous evaluation and enhancement of their business continuity strategies.
2. Strategic Paper for Better Business Continuity Preparation
a) To better manage business continuity risks, Toyota should consider the following core objectives and operational considerations:
i) Enhancing infrastructure resilience: Toyota should invest in infrastructure upgrades to mitigate the impact of natural disasters or major incidents. This includes strengthening physical facilities, implementing redundancy measures for critical systems, and adopting advanced technologies for early warning systems.
ii) Strengthening organizational readiness: Toyota should focus on developing a culture of preparedness among employees by providing comprehensive training programs and regular drills. Additionally, they should establish clear communication channels and protocols to ensure effective coordination during crises.
iii) Improving supply chain resilience: Toyota should continue diversifying its supplier base and establishing robust relationships with alternative suppliers. They should also consider implementing technologies such as real-time tracking systems and predictive analytics to identify potential disruptions and take proactive measures.
iv) Enhancing crisis communication capabilities: Toyota should develop a comprehensive crisis communication plan that includes both internal and external stakeholders. This plan should outline protocols for timely and accurate communication during emergencies to maintain stakeholder confidence.
v) Conducting regular risk assessments: Toyota should regularly assess potential risks and vulnerabilities across their operations. This includes analyzing emerging threats, conducting scenario-based simulations, and updating their risk management strategies accordingly.
b) When presenting the findings and recommendations to the Group Management Committee, it is important to consider limited resources, complex public affairs scenarios, sensitivity of the business position, potential environmental impacts, and past strategic considerations. The presentation should focus on demonstrating the potential impact of improved business continuity management on financial performance, brand reputation, customer satisfaction, and regulatory compliance. It is crucial to emphasize that investing in proactive measures will result in long-term resilience and competitive advantage.
3. Importance of a Crisis Management Team
Despite increasing automation and artificial intelligence, people-related issues remain significant risks that can affect operational and business activities. In the case of talent shortage exacerbated by the Covid-19 pandemic, having a strong crisis management team is essential for effective response and management.
A crisis management team entails the following:
Composition: The team should consist of individuals from various departments and levels within the organization, including senior executives, representatives from key departments (operations, communications, HR), legal advisors, and external experts where necessary.
Roles and Responsibilities: Each team member should have clearly defined roles and responsibilities during crises. This includes decision-making authority, communication coordination, resource allocation, incident assessment, and action plan implementation.
Importance: A crisis management team plays a vital role in ensuring coordinated response efforts during emergencies. They are responsible for assessing risks, developing response plans, activating business continuity measures, communicating with stakeholders (both internal and external), coordinating recovery efforts, monitoring progress, and conducting post-incident evaluations.
The crisis management team acts as a central point of coordination during crises, ensuring effective decision-making, timely response, and efficient resource utilization. Their experience, expertise, and ability to adapt quickly are crucial in mitigating the impact of people-related issues on operational continuity.
Conclusion
Toyota in Malaysia has demonstrated a commitment to managing business continuity risks through learning from past incidents, setting objectives related to risk management, focusing on key success factors such as supply chain resilience, and recognizing the importance of a crisis management team. By continuously enhancing infrastructure resilience, strengthening organizational readiness, improving supply chain resilience, enhancing crisis communication capabilities, and conducting regular risk assessments, Toyota can better prepare for future situations. Through these strategic priorities and operational considerations, Toyota can position itself as a resilient organization capable of effectively managing emerging risks in its continuing operations.