Project Contingency Planning: 6 Steps to Risk Management and Strategic Supplier Success

By Allan Watton on

contingency planningIn the world of complex projects and strategic supplier relationships, the ability to navigate potential challenges is paramount. A key component of this navigation is the practice of contingency planning, also known as developing a ‘Plan B’. Contingency planning is the process of preparing alternative courses of action or strategies to address potential risks, obstacles, or unforeseen circumstances that are likely to derail a project’s success or disrupt the functioning of critical supplier relationships if such risks manifest themselves.

Contingency Planning: Navigating potential challenges

The importance of contingency planning cannot be overstated. When you fail to invest in a robust Plan B, you expose yourself to a range of negative consequences. These consequences often include project delays, cost overruns, compromised quality, strained supplier relationships and, ultimately, the potential failure of the project itself. In a competitive business landscape or one where your service delivery is under public scrutiny, such outcomes can have a lasting impact on your own and your organisation’s reputation, profitability, and growth prospects.

6 Steps to Effective Contingency Planning

In this article, we will explore the 6 essential steps involved in creating a comprehensive contingency plan for complex projects and strategic supplier relationships. By following these guidelines, you can develop a proactive approach to risk management, safeguard your projects from the unexpected and ensure their long-term success.

Developing a ‘Plan B’ strategy for highly complex projects or commissioned services involves several steps. These steps help ensure that potential risks and issues are proactively managed and that contingency plans are in place.

Step 1 – Risk identification and analysis

In the initial phase of creating a Plan B strategy, it is crucial to pinpoint the risks and challenges that could potentially hinder the project’s progress. This process involves a thorough examination of all aspects of the project, including technical, financial, and operational elements. By understanding the likelihood and potential impact of these risks, project teams can prioritise them and focus on developing contingency plans for the most critical threats to the project’s success.

Step 2 – Develop contingency plans

Once potential risks have been identified and prioritised, it is essential to create contingency plans to address each risk. These plans should outline alternative strategies that enable the project to either return to its original trajectory (Plan A) or successfully implement a new direction. By assigning specific roles and responsibilities for executing these contingency plans, project teams can ensure that they are well-prepared to tackle any unforeseen challenges.

Step 3 – Establish triggers for Plan B activation

To ensure that Plan B is activated at the appropriate time, it is necessary to set clear criteria that signal when the project has veered off course. These criteria, which often include Key Performance Indicators (KPIs) or specific milestones, help maintain focus and allow project teams to respond quickly to challenges. Effective early communication of these triggers to all stakeholders (see Step 6) helps ensure a coordinated response when Plan B is needed.

Step 4 – Monitor and update Plan B

As a project evolves, it is essential to continually reassess and revise Plan B to ensure its ongoing relevance and effectiveness. By regularly reviewing the project’s progress and adapting the contingency plans to address new risks or changing circumstances, project teams can maintain a proactive approach to managing potential obstacles. This process also involves keeping all relevant stakeholders informed (see Step 6 – again) of any updates to Plan B.

Step 5 – Test and validate Plan B

In order to ensure that Plan B is both viable and effective, it is crucial to test and validate the contingency plans against example ‘Use Cases’. This can be done through various methods, such as simulations or tabletop exercises, which allow project teams to identify any gaps or weaknesses in their strategies. By addressing these shortcomings, teams can ensure that their Plan B strategies are robust and ready for deployment when needed.

Step 6 – Communicate and train stakeholders

A successful Plan B strategy requires clear communication and training for all stakeholders involved in the project. By ensuring that team members, clients, and suppliers are aware of the contingency plans and their roles in executing them, both at the end of the procurement phase and again, at the beginning of the mobilisation phase, project teams can foster a collaborative environment that is equipped to respond effectively to both identified and unforeseen challenges. This proactive approach to communication and training helps ensure that all parties are well-equipped to navigate any obstacles that may arise during the project’s lifecycle.


In summary, contingency planning is crucial for managing complex projects and building successful strategic supplier partnerships. This proactive approach enables organisations to address both known and unforeseen risks and challenges, ensuring project resilience and adaptability in the face of potential obstacles.

The article outlines essential steps for creating a robust contingency plan, which includes risk analysis, plan development, trigger points, monitoring, validation, and stakeholder engagement. By adhering to these guidelines, organisations can strengthen their risk management processes and protect their projects and supplier relationships from adverse effects, regardless of whether risks are anticipated or unexpected.

Ultimately, effective contingency planning contributes to an organisation’s reputation, profitability, and growth, making it an indispensable tool in today’s competitive business environment.