Industry Market Trends
Expert's Corner: Manufacturers Join Consortiums to Help Each Other After a Disaster
November 5, 2013
In his latest Expert's Corner, Michael Keating shows how trade groups lend a hand to manufacturers during and after a disaster. This is Keating's fourth article in a series on disaster planning and recovery. Future installments in the series will cover document recovery for manufacturers after a disaster and key resources for disaster planning and recovery. After a fire destroyed the Clayton, N.C., manufacturing plant of 3C Packaging in 2005, the company continued to fill orders for key customers with cartons produced by Colbert Packaging in Lake Forest, Ill. The success of that disaster recovery partnership exemplifies the mission of the Independent Carton Group (ICG), say the trade organization's leadership. "Our members are all independent folding carton manufacturers," ICG Executive Director Jay Willie told IMT. "Many of them have a single manufacturing plant, which means that if, for example, a fire were to destroy their sole facility, they would be unable to fulfill customer orders. Fortunately, our production continuity assurance program ensures that this never has to be the case for ICG members. This program was the impetus of the ICG's founding in 1982, and for more than three decades, it has provided disaster recovery peace of mind for our members." Today, the ICG counts 18 independently owned and operated folding carton manufacturers in 11 states as members. The members account for more than $700 million in annual sales. "If a member faces operational disruption, our production continuity assurance program is called into action to ensure order fulfillment," said Willie. "Our board members believe so strongly in the value of this program that all member companies must commit to it. Upon joining the ICG, members sign a commitment letter agreeing to render assistance to any other member, to enable an adversely impacted member to retain its accounts in as close to regular fashion as possible." On the night of the fire at 3C Packaging, one-third of the company's 75,000-sq-ft building was engulfed in flames. About 30 employees were inside, but everyone made it out safely. It took three hours and nearly 100 firefighters to contain the fire. What was left of the building had to be gutted due to smoke damage, and most equipment was rendered useless. Joe Elphick, president and CEO of 3C Packaging, solicited the help of ICG members (including Colbert Packaging) to complete customer orders. A temporary "command center" trailer was set up on the property with computers tapped into client and data files, which had been backed up offsite. Jim Hamilton, president of Colbert Packaging, said he experienced the value of the ICG program when his company served as a backup production resource for 3C Packaging. "During the four months it took 3C to rebuild their fire-damaged plant, we produced cartons valued at more than $1 million dollars for one of their key accounts, giving them the chance to restore operations while retaining the account," he said. "We assured production consistency through team collaboration, transfer of customer documents, and sharing of quality procedures." Businesses that assist another member are compensated at the rate that the affected member would have charged. "The responding ICG member is not trying to make a profit," said Willie. The ICG disaster assistance program, he added, "is really more of a service to enable the affected member to keep their continuity going with their customer base, so that when they get back on their feet, they can continue to run that work for their customers." The details are spelled out in the emergency cooperation memorandum that each company must sign upon becoming an ICG member. ICG members play a crucial role in the U.S. supply chain. Most members serve large businesses, including Fortune 500 and Fortune 1000 customers. Many name-brand products from the food, beverage, pharmaceuticals, cosmetics, and other industries are shipped and sold in packaging produced by ICG-member companies. ICG's newest member, Frankston, Texas-based Frankston Packaging, also sees value in the continuity program. "It's a huge relief to know that members will have our back in the event of a disaster," said Norm Bullock, the company's vice president. The ICG keeps track of equipment, capabilities, and services at all 18 of its members. When disaster strikes a member's manufacturing plant, the ICG helps match the member in need with a member that can provide a seamless transition in producing folding cartons on its behalf. Through regular meetings, ICG members get to know each other. They tour each other's plants, so they generally know which member(s) would be the best fit for them, should they ever require assistance. Members can call on each other directly following a disaster. That was the case with 3C Packaging and Colbert Packaging back in 2005. 3C immediately reached out to Colbert when news broke about the fire. ICG members discuss overall disaster recovery preparedness and best practices at their meetings, said Willie. Some discussions center around disaster recovery from a technology perspective. Another topic is the importance of backing up company files and data and storing backups in a secure offsite storage facility. If ICG members do adequate backups, then things like customers' contact details, purchase orders, press-ready files, prepress renderings, paperboard and ink specifications, can be easily shared if the ICG's continuity assurance program is called into action, Willie said. Another trade group that aids member manufacturers is Irving, Texas-based Promotional Products Association International (PPAI). The group, in conjunction with the Regional Association Council, maintains a business recovery fund to assist promotional products industry members and non-members seriously affected by disasters. The PPAI offered assistance to companies following Superstorm Sandy and the 2013 Moore, Okla., tornadoes. For companies that have been adversely affected by a natural disaster, the PPAI can help replace lost equipment and supplies -- computers, cell phones, office supplies, promotional products catalogs and samples -- while providing a work area or other assistance as needed them up and running. Globally, manufacturers are helping their peers get production back up to speed following disasters. A United Nations Office of Disaster Risk Reduction report outlines how Asian home appliance manufacturers teamed up with their supply chains to speed delivery of much-needed appliances to retailers and on to consumers after the March 2011 earthquake and tsunami in Japan and the 2011 monsoon-season floods in Thailand. Many of the manufacturers sustained major damage to their production plants and had to find new sources to manufacture their products. In the near future, post-disaster communications for manufacturers could be more reliable, thanks to the work of a technology group. The Washington-based Network Centric Operations Industry Consortium (NCOIC) plans to offer a tool that can help manufacturers, governments, and other organizations build a cloud environment for secure communication and collaboration that can be used in disaster recovery. The tool is an open process called NRRC (NCOIC Rapid Response Capability), which the consortium expects to have available next month. In September, the NRRC performed well in a major disaster-response simulation based on the 2010 Haiti earthquake. The simulation showed that a cloud infrastructure can be quickly activated and a diverse group of response organizations from different parts of the world, all using different technologies and applications, can supply and retrieve critical information to meet a range of needs. Keating's series on disaster recovery for manufacturers returns in two weeks. Read part one of this series, What Manufacturers Need to Do About Data Recovery After a Disaster. Read part two of this series, How Manufacturers Can Preserve the Supply Chain After a Disaster. Read part three of this series, Social Media Tools for Manufacturers in Times of Disaster. Michael Keating is senior editor for Government Product News and a contributing editor for American City and County, both published by Penton Media. Read his mid-year 2013 government budget and spending forecast at the Government Product News site. Go here for his IMT 2012 report on how to land government business. His most recent item for IMT was about Mid-year 2013 Update on the Government Market for Manufacturers. Keating has written articles on the government market for more than 100 publications, including USA Today, Sanitary Maintenance, IndustryWeek, and the Costco Connection. Michael can be reached through his website, MikeKeat.net.