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Chapter 19 Risk management 595
Figure 19.11 The stages in failure planning
later) but it is often necessary to know something of the causes of failure in case it is necessary
to determine what action to take.
Act. The discover stage could only take minutes or even seconds, depending on the severity
of the failure. If the failure is a severe one with important consequences, we need to move on
to doing something about it quickly. This means carrying out three actions, the first two of
which could be carried out in reverse order, depending on the urgency of the situation. First,
tell the significant people involved what you are proposing to do about the failure. In service
operations this is especially important where the customers need to be kept informed, both
for their peace of mind and to demonstrate that something is being done. In all operations,
however, it is important to communicate what action is going to happen so that everyone can
set their own recovery plans in motion. Second, the effects of the failure need to be contained
in order to stop the consequences spreading and causing further failures. The precise containment
actions will depend on the nature of the failure. Third, there needs to be some kind
of follow-up to make sure that the containment actions really have contained the failure.
Learn. As discussed earlier in this chapter, the benefits of failure in providing learning opportunities
should not be underestimated. In failure planning, learning involves revisiting the
failure to find out its root cause and then engineering out the causes of the failure so that it
will not happen again. This is the key stage for much failure planning.
Plan. Learning the lessons from a failure is not the end of the procedure. Operations
managers need formally to incorporate the lessons into their future reactions to failures. This
is often done by working through ‘in theory’ how they would react to failures in the future.
Specifically, this involves first identifying all the possible failures which might occur (in a
similar way to the FMEA approach). Second, it means formally defining the procedures
which the organization should follow in the case of each type of identified failure.
Business continuity
Business continuity
Many of the ideas behind failure, failure prevention and recovery are incorporated in the
growing field of business continuity. This aims to help operations avoid and recover from
disasters while keeping the business going, an issue that has risen to near the top of many
firms’ agenda since 11 September 2001. As operations become increasingly integrated (and
increasingly dependent on integrated technologies such as information technologies), critical
failures can result from a series of related and unrelated events and combine to disrupt totally
a company’s business. These events are the critical malfunctions which have the potential to
interrupt normal business activity and even stop the entire company, such as natural disasters,
fire, power or telecommunications failure, corporate crime, theft, fraud, sabotage, computer
system failure, bomb blast, scare or other security alert, key personnel leaving, becoming ill
or dying, key suppliers ceasing trading, contamination of product or processes, and so on.