Does your business have a detailed, procurement disaster recovery plan in place in case of a serious emergency?
Years ago, an organization I previously worked for had a maverick spending employee I will call “Bob”. Oddly, Bob somehow controlled certain purse strings that did not fall under his department. Even more amazing, his position in the organization had nothing to do with procurement or finance.
The Perfect Storm(s):
In September 2004, Hurricane Ivan ravaged the east coast of the United States and hit Southwestern Pennsylvania particularly hard, causing severe flooding and damage. Even though we experienced power outages, the business where I worked continued to serve our global partners as we ran our office off of a diesel-fueled generator. Everything worked as planned and we never lost communication.
Two months later, a major telecommunications provider was digging about a quarter mile from our facility… and the lights went out. This time, however, the generator did not come on, it was out of fuel. We were suddenly cloaked in darkness. The services our partners and their clients who counted on us to deliver on a daily basis instantly ceased.
Phone calls started pouring in on our cell phones from executives at our major clients threatening us with penalties, out-clauses, and taking away our business.
Since the telecommunications provider struck a major underground power source, we were at their mercy eagerly awaiting repair. Unfortunately, this did not occur until 30 hours later. Our diesel fuel provider was unable to deliver the fuel for the generator until 48 hours later. Although we scrambled to get service provided to our partners from our remote employees’ systems and even from our competitors, the damage had been done.
Suddenly, Bob was cornered and nobody was throwing him a lifeline, so he did the only thing left he could do before he drowned…he threw the purchasing department under the bus and blamed them for not scheduling a delivery of fuel!
After this incident occurred, thought leaders were gathered to assess the situation. Procurement disaster recovery plans were carefully drafted and implemented alongside Information Technology disaster recovery plans to prevent such an incident from ever happening again. Our backup generator was fitted in with an IP-based fuel gauge that sent out warning emails to let concerned parties know when the fuel levels were dropping close to the minimal acceptable threshold levels.
If disaster recovery procurement best practices had been implemented prior to these incidents, the maverick Bob would have been forbidden from being the one to purchase diesel fuel for the generator. His lack of awareness of fuel levels being critically low damaged our brand reputation and cost our company the business of a major entity for over a year before we were able to regain their trust.
Drafting disaster recovery policies and procedures does not make for interesting work, but, when an incident occurs, they allow for memorable stories. On the surface, one would perhaps not see the immediate tie-in between disaster recovery and procurement, but the two are very much interwoven.
Has your business ever been severely affected by the lack of a sound procurement disaster recovery plan? I’d enjoy discussing this topic with you and learn how you and your team adjusted and implemented disaster recovery policies and procedures.