Towards crisis-resilient production operations
In Finland, crisis preparedness is based on a comprehensive security approach and security of supply. Industrial companies ensure the survival of society as a whole in crises, so developing their crisis resilience is also important from a societal perspective.
Following the media, it is easy to conclude that we are living in an unprecedented era of crises. However, although globalization has made the impacts of crises more far-reaching, statistics show that the number of crises has actually decreased. For example, in 1990, almost two billion people lived in poverty, while in 2015 the corresponding figure was around 700 million. Of course, there are still many globally risky regions and numerous ongoing crises around the world.
From crises to polycrises
Crises are increasingly more holistic in nature: when environmental, technological and societal changes combine, they create a complex and difficult-to-manage situation. The threats or risks affecting business are also more diverse today than before.
When crises intensify, accelerate and synchronize, we can speak of polycrises. Their background factors include the deterioration of nature, competition for natural resources, increasing inequality, weakening trust in institutions, and the rapid development of technologies, such as artificial intelligence.
Starting point in Finland is comprehensive security
In Finland, crisis preparedness is based on a comprehensive security approach and security of supply. Comprehensive security is a cooperative model of Finnish preparedness in which the vital functions of society are ensured through cooperation between authorities, business, organizations and citizens. From the perspective of industrial activity, the aim is either to prevent crises or, at a minimum, to prepare for them.
Security of supply refers to preparing for possible crises and disruptions, as well as continuity management in exceptional circumstances. Vital functions are secured so that society functions, business operates and people can safely live their everyday lives. In Finland, security of supply activities are carried out in cooperation with the public, private and third sectors, and it concerns essential critical production and similar services, as well as securing infrastructure.
Global operating environment poses its own challenges
Industrial companies almost always operate in global markets, whether their business involves raw materials, technology or finished products. This exposes them to risks in the global operating environment, the management of which requires proactive preparedness.
The cornerstone of risk management is the ability to identify risks that threaten business, as they can stem from international trade, pandemics and complex supply chains. Recently, global logistics chains have been disrupted by trade tensions, the coronavirus pandemic, and a single container ship stuck in the Suez Canal.
Climate change also poses risks to business operations. For example, it can make it more difficult to access some resources, thereby increasing their prices. It can also increase the frequency of exceptional weather conditions and can even temporarily paralyze the operations of an entire company. For example, increased droughts may significantly reduce the availability of clean water.
Importance of traceability and continuity management
In order to maintain social peace, it is of paramount importance to secure the functions of society, especially critical infrastructure. The risks to water supply and energy systems in the past year have highlighted the need to also examine threats to the environment, food and water safety. In practice, this requires companies to invest in traceability so that the effects can be limited and operations can be rapidly restored to normal.
Continuity management is another key component of crisis resilience. It is a process that improves security of supply and helps organizations shorten recovery times from disruptions. It ensures the continuity of operations even during a crisis. Ensuring security is also an essential part of crisis preparedness. In particular, the role of cybersecurity is increasingly emphasized, as an increasing share of company operations is based on digital solutions.
Crisis resilience: the foundation for survival
When talking about crisis preparedness, it is also essential to highlight the concept of resilience. It refers to the ability of people and communities to adapt to changing circumstances, face disruptions and crises, and recover from them effectively. Resilience is created not only by preparing for crisis situations, but also by means of everyday operating models, flexible planning solutions, and strong cooperation with stakeholders.
Comprehensive security and security of supply activities on a national level create a solid foundation for supporting the crisis resilience of companies, but this does not eliminate the need for their own, individual preparedness and risk management. Equal attention must be paid to the speed of recovery from disruptions so that business can rapidly return to normal after a crisis.
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How should industry’s resilience be developed and maintained?
As the operating environment of industrial companies becomes more uncertain and threats more diverse, preparedness for crises and other threats becomes increasingly important. Sustainable industrial operations require proactive planning, where risks are identified and prepared for effectively. Resilient operations withstand unexpected challenges and recover rapidly from crises.
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