To Share or Not to Share Business Continuity in a Shared Supply Chain

One of the challenges to business continuity planning in 2013 will be the trend to share supply chain facilities between two or more companies. The logic is that to keep logistics and distribution running smoothly but at acceptable cost, the overhead of facilities such as distribution centres or delivery can be shared. It is even possible for two companies sharing part of the same supply chain to be competitors with each other. However, although this may work for supply chain operations, what about business continuity? Can it be shared or must business continuity be an individual activity for each company concerned?

The answer depends on the way in which the facilities are shared. For a distribution centre or specialised warehouse for example for pharmaceutical or chemical products, the reason for sharing is often that the centre or warehouse requires significant capital in order to be built. In turn, this means that if the facility becomes unavailable, the challenge will be that much greater to replace it. Two companies sharing such a resource may be obliged to have separate business continuity plans in that there may be no other suitable or affordable centre in the vicinity capable of accommodating the two firms at the same time.

Sharing a transport fleet on the other hand may afford other possibilities. While trucks and trailers are not necessarily cheap, there may be several of them in a fleet, compared to just one distribution centre. For the two companies sharing this part of the supply chain, they have a bigger chance of finding a few replacement vehicles if part of their fleet becomes unavailable. While overall performance and therefore customer service may be lowered while a fleet operates at sub-optimal levels, such a situation does not necessarily force supply chain partners to go their separate ways.