6-11. Lessons from a Company That Suffered Long-Term Operational Stoppage Due to Flawed BCP During a Disaster

In corporate management, a Business Continuity Plan (BCP) is a crucial mechanism for minimizing damage and quickly restoring business operations when faced with emergencies like natural disasters, accidents, or pandemics. However, many companies have experienced delays in post-disaster recovery and long-term operational shutdowns due to insufficient BCPs. Here, we'll explain the typical causes of these failures and the lessons to be learned from them.

1. Underestimating Disaster Risks

If a BCP is created with a limited scope of anticipated disasters, it will not be effective during a large-scale event. For example, a company in an earthquake-prone area that did not prepare for a tremor of magnitude 6 or higher, or a company in a flood-prone area that did not implement flood control measures, could suffer catastrophic equipment damage and be unable to resume operations. It is essential to comprehensively identify risk scenarios and plan for the worst-case scenarios.

2. A Lack of Alternative Locations and Supply Chain Measures

A common problem companies face is not securing a means of business continuity outside of the disaster-stricken location. Without a pre-arranged alternative factory or external warehouse, the company will be unable to supply its customers until recovery is complete. There are also cases where operations are shut down for an extended period because the company did not consider the risk of its suppliers being simultaneously affected, leading to a prolonged inability to procure parts and raw materials. Redundancy is especially important in global supply chains.

3. Confusion in Employee Safety and Command Systems

In a disaster, confirming the safety of employees and guiding their evacuation is the top priority, but a lack of training can lead to confusion. Furthermore, an unclear chain of command can cause delays in the on-site response and hinder recovery efforts. It is necessary to have a clear command structure and regular drills to ensure both employee safety and rapid decision-making.

4. Inadequate IT and Data Backup Systems

In modern business, operations can be completely paralyzed if core systems or production management data are disrupted. Companies that did not set up cloud or remote backups have experienced long-term chaos after losing data to server floods or fires. Redundancy in IT systems and a data preservation plan are central elements of a BCP.

5. Lessons and Directions for Improvement

The lesson to be learned from these failures is that a BCP must be effective, not just a formality. It is crucial to maintain a realistic plan through regular reviews, drills, and verification by external experts. Additionally, collaboration with business partners and the local community can accelerate disaster recovery.

In summary, a flawed BCP can lead to long-term operational shutdowns, which cause serious business damage, such as loss of customers and credibility. For a company to grow sustainably, it is essential to not underestimate disaster risks and to create a multi-layered plan that protects employees, equipment, information, and the supply chain. Positioning the BCP as part of a business strategy and building an effective system is the most important lesson for protecting a company's future value.