Business Continuity Management Framework

Introduction to BCM

Business As potential key control to minimize the impact of

Continuity disasters on the organization, its people, and assets

Management As an alternative mechanism for risk mitigation

(BCM) As a factor to organizational resilience in the face

of business disruption
 Toyota Business Continuity Management (BCM)

Despite the fact that Toyota was not directly

impacted by recent large-scale catastrophes
including the Great East Japan Earthquake as
well as the Thailand floods, it was
momentarily unable to achieve its goal of
providing consumers with consistently
improved vehicles as well as services.
Continued…
• Moreover, the Toyota Group's major activities are focused in regions that are likely to be affected
by a Nankai Trough earthquake, increasing the chance that Toyota may be harmed.

• Destruction to Toyota as well as its subsidiaries may have a significant effect on manufacturing as
well as other operations.
 Policy of BCM in Toyota
The main concept of Toyota's BCM is to focus on disaster recovery in this order: The Fundamentals of Toyota
After a disaster, what are your top priorities?

1
Humanitarian
as well as life
saving first
2
Early recovery
of the affected 3
areas Restoration of
Toyota
operation and
production
 Why BCM is important?

BCM is more than a reaction.

• also strengthening an organization's resilience

BCM is about more than simply putting out disasters.

• also establishing a knowledge of what may be at risk and building contingency plans in the event that anything goes wrong

BCM isn't simply about having overly detailed strategies to restore a company
• Furthermore, having plans that are appropriate for the type of your company

BCM isn't an add-on to your company's operations.

• It must have been an incorporated management process, as part of risk management and excellent business management, to be
successful.
BCM
PROCESS
  Toyota’s Basic Approach to
BCM

Since the 2010 recall, Toyota has been striving to

strengthen its business continuity management
system.

To fully avoid and minimize the effect of risks that

may emerge in business operations, Toyota created
the Risk Management Committee in June 2010 but
also designated risk managers worldwide and at
each department.
 Plans as well as Procedures
Toyota has named a Global Chief Risk Officer (CRO) as the company's head of international risk management.

The CRO is in charge of overseeing large risks and leading the company's response to major global crises.

Regional CROs are hired to administer their own risk management framework under the Global CRO.

Risk management is allocated to senior officers and their sections in the head office (such as Accounting and
Purchasing), whereas risk assessment is allocated to the head of the company and their company within every
in-house business. They work together with the local head offices and each department to coordinate and
collaborate.
 Continued…

 Information security initiatives

• Toyota will protect our customers' safety and security from cyber-attack risks.

• Toyota sees it as our societal duty to safeguard our customers' personal

information, and as a result, information security is being reinforced via
governance and risk management.
• Toyota and its consolidated subsidiaries developed an Information Security Policy
in June 2016 to define information security fundamental policies and objectives.
Disruption related risk management

• Taichii ohno said three business disruptions that must be avoided

1. Mura (unevenness)

2. Muri (overvurden)

3. Muda (waste)

Disruptions comes from several sources in Toyota

• Natural disasters

• Plant manufacturing electrical blackouts

• Operational risk

• Supply chain disruptions

Continued…

• Semiconductors, passives, and other components utilized in such systems are not purchased by automakers.
Instead, they rely on their tier 1 suppliers to procure the chips, capacitors, resistors, as well as other electronic
components required for manufacturing, as well as to maintain relationships with those vendors.

• When it comes to supply chain risk that may influence components used in automotive systems, however,
vehicle manufacturer purchasers are more engaged and have established risk management methods that affect
not just their tier 1 suppliers, but also their tier 2 and tier 3 suppliers.

• Automakers' purchasers must be engaged in supply chain risk management to ensure that their supply
networks maintain supply continuity if a natural catastrophe interrupts component or other material
manufacturing, or market circumstances result in part shortages.
 Action plans-activating emergency management and BCM
plans

• Following the earthquake and tsunami in Japan, Toyota issued a challenge to its first-tier suppliers to examine their supply
chain and estimate how long it would take them to recover if another catastrophic event interrupted production.

• Toyota also wanted to hear how suppliers might bridge the gap between the recovery and the automaker's urgent
requirements for components.

• “Once they figured it out, they informed us what their countermeasures were going to be,”. Toyota examined the
countermeasure suggestions it received from all of its suppliers and found "some excellent countermeasures" that might
help reduce risk and keep parts supplies flowing, according to Lewis.

• Other supplier proposals "required some tweaking," and Toyota offered recommendations for how they might be improved.

• According to Lewis, two-way communication with suppliers is critical for reducing risk. If a potential risk issue is
discovered, suppliers must notify Toyota as soon as feasible.
  Review and Maintenance
To keep the BCM in a consistent condition, Toyota follows the following directives:

The business continuity plan should be maintained in a variety of places, including the principal
site, alternative recovery sites, staff cars, and residences.

The continuity plan is tested on a regular basis to detect gaps as well as weaknesses.

Any major changes in process, people, and resources are evaluated to see whether plan
modifications and testing are necessary.
To prevent misunderstanding and the usage of obsolete information, version control was provided
for the business continuity plan as well as the business continuity test plan..
Integrating current and future initiatives into the business continuity plan change management
process is critical.
The maintenance of the business continuity strategy is delegated to an experienced individual or
team.

Maintenance of the business continuity plan is included in the BCMS budget, according to Toyota.

New hires are given sufficient training..

Maintenance plan for
BCM
 References
Hiles, A. (2010). The definitive handbook of business continuity management. John Wiley & Sons.

Mishra, S., Raut, R. D., Narkhede, B. E., Gardas, B. B., & Priyadarshinee, P. (2018). To
investigate the critical risk criteria of business continuity management by using analytical
hierarchy process. International Journal of Management Concepts and Philosophy, 11(1), 94-115.

Hino, S. (2005). Inside the mind of Toyota: Management principles for enduring growth. CRC
Press.
THANKS