Sainsbury's has begun a drive to ensure its key suppliers have business continuity plans in place to deal with disruptions such as the loss of IT systems or key sites becoming inaccessible.
The supermarket chain has begun quizzing companies responsible for supplying stock and providing services on their plans to keep computer networks running in the event of disaster.
"It is a massive piece of work. Given that Sainsbury's deals with 2,500 suppliers, we are focusing on those that are most critical to our operations," said Steve Mellish, head of business continuity at Sainsbury's. The firm is also looking at how to revise terms and conditions to include business continuity planning in future contracts with new suppliers.
Providing evidence that IT can survive disaster is becoming increasingly important in winning contracts, according to Richard Hawtin, partner at law firm Baker & McKenzie. "It is difficult to think of a significant outsourcing or services agreement where business continuity has not been addressed in significant detail," he said.
Sainsbury's initiative follows concerns that businesses, particularly smaller firms, are inadequately prepared for disruptions caused by terrorist attacks, power failures, floods or transport failures. Last month City of London Police warned that only half the firms in the City had continuity plans in place to deal with the impact of a terrorist incident.
Mellish said, "We will be asking what their current capability is. We will be asking whether they have business continuity and disaster recovery plans and whether they cover IT, loss of critical location, etc. If we get something back saying 'no we don't have cover for IT', we will be talking to them very quickly."
Over the past 12 months the supermarket has been piloting a programme to improve levels of business continuity planning with its IT outsourcing partner Accenture, LMUK, which runs the Nectar loyalty card scheme, and McAlpine, which manages Sainsbury's generators and refrigerators. Over the next 12 months it plans to extend the programme to cover up to 25 other in-store service providers and 200 major suppliers of goods to stores.
Sainsbury's plans to work with its suppliers to help them improve their business continuity planning, providing them with advice and guidance, rather than threatening to drop suppliers that do not comply. The supermarket has developed a rating scheme to assess how critical each supplier is to the business. It is focusing its attention on suppliers that could have a significant impact on Sainsbury's business reputation if they faced disruption.
Sainsbury's has set up two disaster recovery centres in London, equipped with desks, PCs and phones. They have the capacity for up to 500 staff in an emergency, and the firm has issued its workforce with maps showing where the centres are.
Rob Carolina, an IT specialist with law firm Origin, said companies could request an audit of IT disaster recovery plans when negotiating with suppliers. "You can say, 'we want to audit you, inspect your facilities'. That is the prime value of these contracts," he said.