Case Study 1

DEUTSCHE BANK TIES BUSINESS CONTINUITY PLANNING TO THE BUSINESS

Deutsche Bank AG is one of the worlds largest banks, with 65,700 employees serving 21 million
customers in 74 different countries. It has investment banking and asset management
businesses throughout Europe, the Pacific Rim, and the Americas. Management is dedicated to
protecting the interests of customers, employees, partners, regulators, and shareholders
against loss of revenue and reputation, and the company has always treated business
continuity planning very seriously.
The bank has a global business continuity and disaster recovery program which addresses data
backup and recovery and procedures for minimizing changes in operational, financial, and
credit risk exposures. Operational risk focuses on the firms ability to maintain communications
with customers and keep mission-critical systems up and running. Financial risk deals with the
firms ability to continue generating revenue and obtaining adequate financing. Credit risk
occurs when investments erode from lack of liquidity in the broader market.
Every six months Deutsche Bank New York offices test their disaster recovery plan, practicing
what they would do if their computer centers in the World Trade Center and in neighboring
New Jersey went down. The companys data are always backed up on tape. Tragically, Deutsche
Bank lost two employees and its New York offices in the September 11 World Trade Center
terrorist attacks, but the remaining employees were back working within a few days because
the company is so well prepared.
Deutsche Bank has a permanent structure to manage and govern business continuity
management. Deutsche Banks Asia Pacific headquarters in Singapore and its bigger locations in
Hong Kong, Japan, India, and Australia have full-time teams for this purpose. The banks
business continuity planning (BCP) function brings together various internal units and experts
dealing with all aspects of riskinformation risk, physical risk, or business riskto coordinate
plans addressing loss of facilities, personnel, or critical systems.
A team headed by Kenny Seow, head of Business Continuity Management for Deutsche Banks
Asia Pacific Region, maintains a 12,000-square-foot Disaster Recovery Center (DRC) outside the
Singapore Central Business District. The DRC is a lights-out facility, meaning that it contains
no staff during normal business operations. It does contain, however, work space to support
critical business functions for over 200 staff and all backup computer and network equipment
for disaster recovery, including a generator with a 10-hour refillable fuel tank and smoke
detection and sprinkler systems. The computer center in the DRC also acts as a backup regional
processing hub for Deutsche Bank Asia Pacific so that the Asia Pacific Region will not be
affected if there is an outage at its production data center. Its systems are monitored and
controlled remotely from Deutsche Banks main production computer center or from bank
offices where information systems staff work.
To Think About: Why is business continuity planning so important for a firm such as Deutsche
Bank? What management, organization, and technology issues need to be addressed by a
business continuity plan?
Case Study No. 02
Modi Brand threads
Modi Brand threads are manufactured at their plant in Mumbai and sold all over the country
through their 15 area offices. It caters mainly to hosiery, tailoring and household segments.
Even though the distribution is done through their 15 area offices, the customer satisfaction
level was estimated at just 85% level. Moreover, the fill rate is also 80%. The market for this
product is very competitive. Many times there is cut-throat competition. Hence, to maintain its
customer base, Modi Brand has to maintain inventory of all its products at all time. This
increasing levels of inventory, just to maintain the customer base and ward off competition are
a matter of great concern to the company. The large levels of inventory have posed a myriad of
problems to the company, including reduction in the profits.
The treads manufactured are of two types, namely, cotton and polyester. They come in
different lengths, strengths and shades. There are 100 varieties of these shades in each shade.
Considering about 20 different shades, the total product range works out to 2000 stock keeping
units One carton of each colour is to be kept in stock to meet the varied demands of the
customers. The cost of one such carton works out to Rs. 2,000 for Modi thread. Thus, 2000
SKUs multiplied with Rs. 2,000 works out to Rs. 40 lakhs. If this has to be stocked at each of the
15 centres, the total stock value to be kept on hand at any time works out to Rs. 600 lakhs, or,
Rs. 6 crores. This is very high high for the company by any standards.
The company is also facing problems of warehousing and transportation. At present, the
company has contracted trucks for delivery of stocks to the various centres. But, the company
faces problems of reliability and consistence with these trucks. Warehousing problems pertain
to storage, pilferage and damage due to weather conditions..
Questions:
a) Identify and analyze each of the basic problems faced by Modi Thread
b) What steps would you suggest to reduce the inventory levels at the Regional Offices.
c) Suggest alternative distribution system, taking into consideration the problems of
warehousing and transportation al