Business Continuity and Disaster Recovery

Group Members: Christian Evan (1501197433)

Eko Budi Santosa (1501197603)

Muhammad Rasyid (1501198354)

Maryland & Virginia Milk Producers Cooperative Association Case

Introduction

The 92-year-old Maryland & Virginia Milk Producers Cooperative Association (Maryland & Virginia) is owned and operated by 1,500 dairy families whose farms span the Mid-Atlantic and Southeast regions of the U.S. With farms ranging in size from 100 to 2,000 dairy cows, Maryland & Virginia members produce an average of 3 billion pounds (1.3 billion kilos) of milk each year. With products ranging from:

• Fluid Milk
• Powder Milk
• Butter and cream

The Cooperative ended 2011 operations with an EBITA of $15.7 million and member equity of $34.8 million. Revenues were up by $143 million in 2011 compared to 2010, for a total annual revenue of nearly $1.4 billion. This increase was due primarily to higher raw milk prices and an increase in member milk production.

Headquartered in Reston, Virginia, Maryland & Virginia is governed by a 16-person board of directors, including three directors from each of the cooperative’s five member districts. One public director is appointed to provide an outside business perspective.

Its business divided into 3 processes:

1. Fluid Milk Processing

[pic 1]

Figure 1 Skim milk processing

1. Powder Milk

[pic 2]

Figure 2 Manufacturing Powder

1. Butter and Cream

[pic 3]

Figure 3 Manufacturing Butter

Problem

Problem 1: Fire

Associated Risk:

• Loss of inventory/equipment
• Physical Data loss
• Employees turnover and loss
• Decline in Production capacity
• Reputational impact (safety, trustworthiness, etc)
• Environmental impact
• Potential decline in profits

Problem 2: Epidemic and viral disease (FMD)

• Loss of livestock
• Decline in Production rate
• Reputational impact (safety, trustworthiness, etc)
• Environmental impact
• Potential decline in profits

Problem 3: Media/activist backlash

• Reputational impact (trustworthiness and integrity)
• Disruption of production process
• Potential decline in profits

Problem 4: Equipment malfunction

• Disruption of production process
• Potential decline in profits
• Over budget of production

Mission Statement

        To provide advice preventive actions which help the company in mitigating the losses associated by the potential risks which arise from the problems.

Potential Major Risks

Existing BCP:

1. Annual in-person training drills across the U.S.,
2. Online crisis training programs,
3. Crisis-ready Web sites and social media properties,
4. Template situation-specific crisis plans and
5. A wide network of media-trained academic and government partners who can serve as third-party experts in the event of a crisis
6. “Live” and “dark” web sites (the latter will only be “turned on” in the event of a crisis)
7. In-person and virtual crisis training sessions
8. A social media education program and in-crisis social media strategy
9. Monitoring of federal government’s crisis communications information
10. Messaging manuals
11. In-crisis procedural toolkits
12. Video footage of dairy farm and processing operations that can be shared with television networks
13. A network of third-party scientific and government spokespeople who can be mobilized to talk with the media at a moment’s notice.

Business Impact Analysis

Maryland and Virginia

The firm’s business functions and processes are following Porter’s value chain model which consists of primary activity and support activity. The model is shown in the picture:

[pic 4]

Core Values

1. We are responsible to the membership.
2. We are financially sound.
3. We have a profitable strategy.
4. We are prepared to handle change.
5. We are national leaders.

 (Maryland & Virginia, 2010)

Primary activities:

1. Inbound logistic: receiving fresh raw milk from supplier (farms)
2. Operations: producing milk and butter
3. Outbound logistic: finish product(milk that has been convert into butter and cheese)
4. Marketing and sales: Market the finish product to stores and food chain
5. Service: deliver the finish product (final) to customer

Support activities:

1. Infrastructures: the firm has multiple milk farms in each branch, these milk farms supply the milk that the company process into valuable goods (milk, skim milk and butter).
2. Human resource: the employees of the firm have been trained in the company processes, each of them have roles and tasks to complete (from receiving and quality checking to manufacturing).
3. Technology development: the company develops and implements IT in manufacturing processes (pasteurization and manufacturing) and in its sales tracking.
4. Procurement: the procurement processes in the company are tightly controlled (especially in quality control area) with the entitlement of premium for excellent quality and penalties for poor quality milk.

IT system:

-The process of converting  milk (raw material) into butter and cheese are process by the machine