CPA & Business Advisory Blog

Planning

Planning for the Unplanned

This article is published by Skoda Minotti’s Manufacturing & Distribution Group.

The good news in Skoda Minotti’s recently-released 2017 Manufacturing & Distribution Survey is that Northeast Ohio manufacturers are generally confident about the near-term future. However, while the business climate is brightening, most survey respondents also have an eye toward future concerns such as finding skilled employees and transferring knowledge from an aging workforce to the next generation of manufacturing talent.

What if “the future” arrives too quickly? Many organizations have a small administrative staff. Can your organization absorb the loss of key personnel, whether it’s via normal attrition or something more sudden like illness or a personal emergency? How much disruption will result from the absence of certain employees?

It may be unpleasant to consider the possibility, but it’s important to plan for such absences by creating and maintaining standard operating procedures for each key role within your organization. At a minimum, develop procedures so the organization can function effectively until normal staffing levels are restored.

A good place to start is to take inventory of key business processes and regular activities, such as procurement, sales processing, production planning and financial reporting. With this list, identify those activities that are most critical or those that rely on one person to complete. For example, does the accounting clerk have the knowledge to perform the controller’s duties if the controller is unavailable for an extended period of time?

When documenting processes, no detail is too small to capture, and it may be helpful if another person records the process steps to ensure steps are not passed over. This independent person acts as a quality check to ask the question if the process flow isn’t logical. This is especially important when a person has to consolidate data from multiple systems or manually generate any information. When creating a procedures manual, it may be beneficial to include screen-shots as applicable.

Lastly, consider systems access. While it’s never wise for personnel to share login credentials, can your IT support personnel quickly replicate an access profile which enables replacement personnel to perform critical tasks? Is company data stored on a shared server, or can data be quickly retrieved if it’s stored on a local device?

The old adage “an ounce of prevention is worth a pound of cure” is certainly applicable to these scenarios. Taking the time to document key processes and developing a plan to mitigate business continuity risks resulting from the loss of key personnel will pay dividends in the additional sleep you gain from knowing that you’re well prepared. Additionally, documenting your processes is the first step toward improving current processes, which was noted as a top priority for 2017 Manufacturing and Distribution Survey respondents.

Skoda Minotti’s Manufacturing and Distribution Group can help you assess risks to your operations and can assist with mitigating those risks.

Curious how you can implement or improve process documentation at your company? Please contact Randal Slifer at 440-449-6800 or email Randal.

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