EDINBURGH, 9 November 2006 – Aon, a leading insurance broker and risk management consultant, is calling upon the timber trade to make business continuity management a top priority to help boost its competitiveness in a flourishing sector. Speaking today to key players in the timber community at a joint seminar with the Royal Bank of Scotland in Edinburgh, Aon is telling companies to plan for disasters which could threaten the health of their business in the forestry industry which generates £960 million a year in Scotland (source: Confederation of Forest Industries, November 2006).

In fact, having a business continuity plan can make the difference between winning and losing a contract. Scottish timber importer and timber engineering business, James Donaldson & Sons Ltd, has already reaped the benefits. When tendering for a large order, one of the required terms was to demonstrate business continuity plans. Donaldson is convinced it won the business because it had a robust plan in place.

Tom Aldridge, development manager for Aon, said: “As the Scottish government sets its goal to increase forest land cover from 17% to 25% for commercial and environmental drivers, it’s a great opportunity for the timber trade to thrive. This includes the whole supply chain from forest owners to the main three users of timber in printing and publishing, construction and furniture. However, companies need to protect their assets in the event of an incident, such as a fire on land or insolvency of a supplier, through a thorough business continuity plan.”

Donaldson case study

Aon’s Risk Control Consultants designed three mock scenarios for the importer that would test Donaldson’s resilience against a variety of exposures. The scenarios were a major fire at one of its main production facilities that would close the site, an incident at a sewage works next to one of its plants causing denial of access and the loss of a key supplier.

The main objectives were to increase the company’s awareness of potential disasters, decide who would be responsible for what and what actions the organisation needed to take to improve its business recovery capabilities.

For example, the fire at the production site exercise demonstrated to Donaldson that it had no alternative location to which it could switch manufacturing. This helped identify the risk that it could lose orders to competitors if an incident occurred. As this was a major concern, Donaldson has now signed a formal reciprocal agreement with a competitor, under which both will help each other out if either has a serious incident and loses its production facilities.

Following the scenarios, action points were agreed which addressed the concerns arising from the exercises.  Mr Aldridge added: “It demonstrates how seriously companies are taking business continuity, and that having a robust plan in place can give your organisation a competitive advantage.”

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About Aon

Aon Corporation is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 45,000 employees working in Aon's 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

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