Industry Market Trends
Using Trade Associations and Expert Consultants in Disaster Planning and Recovery
January 15, 2014
Manufacturers can rely on trade groups and expert consultants in their disaster planning, says Michael Keating in his latest Expert's Corner. This is Keating's seventh article in the series on disaster planning and recovery. His series advises manufacturers what to do in disaster preparation and recovery. Fort Myers, Fla.-based Polygon Solutions, a manufacturer of rotary broaching and wobble broaching tools for CNC lathes and screw machines, knows it can count on a couple of trade groups in its disaster recovery efforts, according to Peter Bagwell, a product engineer at the firm. "We do have an emergency plan in place, and it largely involves the partnership of two different associations to which we belong," Bagwell told IMT. "When we started the business a few years ago, neither my partners nor I were from this area in southwest Florida, and we sought out this type of organization to help us find local resources, including emergency supplies, routes, methods, and partners that we can work with in case of a natural disaster (namely, a hurricane). The first trade group is the Southwest Regional Manufacturer's Association." The other trade group that Polygon Solutions has partnered with for disaster planning is the Precision Machine Product Association. The PMPA puts out a document called the Business Disaster Recovery Plan for its members to follow in aiding each other under special circumstances, similar to other cooperative consortiums. "This organization includes a few of my competitors," Bagwell said of PMPA. "Although it would normally be unusual for competitors to help each other, this is a very friendly community with a long history of helping fellow members. The PMPA has an emergency response policy that uses itself as a hub and lets me feed special projects to my competitors who will deliver the goods and basically agree not to steal my customers." Bagwell said Polygon Solutions has not had to put its disaster plan into action, "although, last year we had a storm get close to our plant and we started to get ready for it." Manufacturers should tap into resources at national interest groups like the National Association of Manufacturers or associations specific to their industries, such as the Aircraft Locknut Manufacturers Association, recommended Greg Raab, manager of integrated services at Adjusters International, a disaster recovery consulting organization. The trade groups, said Raab, "typically put out a publication with articles on disaster planning and the like, which may be a source of credible information and possible leads to qualified firms. However, nothing beats due diligence in investigating and interviewing attorneys, brokers, risk managers, and adjusters that have experience with manufacturing exposures, both on and off-premises." Raab said much of the basic disaster planning process can be handled by the manufacturer's staff, usually coupled with the advice of an insurance broker who understands the manufacturing business. "What we find from a post-disaster insurance adjusting perspective is that the firms that planned for 'off-premises' disasters were in a much stronger position," he noted. "Completing an off-site vulnerability analysis can potentially protect a manufacturer from a disaster that affects major suppliers, customers, etc. There are many examples of firms that have run into financial trouble when a tsunami or flood wiped out an overseas plant that was instrumental to the firm's supply chain." ARMA International is a professional association and authority on managing records and information. The group offers an online resource, the Records and Information Management Buyer's Guide, which lets manufacturers search for companies and consultants that provide disaster-related services. ARMA also provides information resources on managing and recovering business-critical records and evaluating and mitigating records and information risks, and offers an online course on assessing and mitigating risk. Meanwhile, the Restoration Industry Association represents more than 20,000 cleaning and restoration professionals from 1,100 member firms specializing in environmental issues, restoration, textiles, and materials. A search feature on the group's site lets manufacturers quickly find members' services by city and state. The site also has a handy glossary of disaster restoration terms. Consultants are ready to assist manufacturers in disaster planning. "Significant pre-planning that involves robust risk assessments, capability analysis, and simulation/training can significantly increase the organization's resiliency to the crisis event and improve its recovery capabilities," said Phil Samson, the Dallas-based principal of PricewaterhouseCoopers' risk assurance practice and the firm's business continuity management service leader. In its consulting work with manufacturing organizations, PwC uses a simulation model that details the supply chain, including suppliers and third-party service providers (i.e., transportation and third-party logistics companies), and the internal supply chain as well (i.e., manufacturing, distribution, product risk, supply chain administrative, etc). "The exercise of collecting and better understanding the details of supply chain functions provides insight of potential risk," Samson said. "Then the simulation model allows for a visual interpretation of the risk and what alternatives, if any, may exist," he added. The types of risks simulated are broad and include geographic density and the impact of a natural disaster or geopolitical event, supplier failure risk, third-party services risk, and internal supply chain operational risks. All types of manufacturers would benefit from crisis training and reputation management training, said Peter Smolowitz, management supervisor at Charlotte, N.C.-based Eric Mower & Associates. The company provides crisis communications, crisis consulting, and public relations, among other services in the B2B space. The key for any company is to have a well-trained crisis team in place before a crisis hits, said Smolowitz. "They should develop an early-warning system to help diffuse an oncoming crisis before it's too late. And if there is a crisis, the team will know how to act quickly so the crisis gets mitigated ASAP." Weather-related disasters are good examples of what-if scenarios a crisis team should prepare for in advance. "Companies should know what to do if a potential weather disaster is approaching, what precautionary steps to take, and what triggers those actions," Smolowitz said. "Companies should also know in advance that if and when there are media inquiries, who should field them and how they should be handled. Any potential spokesperson should receive media training to make sure they effectively communicate key messages." Disaster recovery (DR) and readiness planning is still wanting in many organizations, according to the not-yet-released "DRP Benchmark 2014 Annual Report" from the DR Benchmark Council. The bad news in the report: Nearly three out of four companies worldwide are failing in terms of disaster readiness, scoring either "D" or "F" grades. More than 60 percent of those that took the survey do not have a fully documented DR plan in their organizations, and another 40 percent admitted that the DR plans that they currently have did not prove useful when it was called on to help their organizations' worst disaster recovery events or scenarios. More information on the DR Benchmark research can be found here. Top photo credit: cbenjasuwan at FreeDigitalPhotos.net 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. Read part four of this series, Manufacturers Join Consortiums to Help Each Other After a Disaster. Read part five of this series, How to Preserve and Recover Documents After a Disaster. Read part six of this series, Why Preparedness Is Crucial in Disaster Response and Recovery. 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.