Many years ago, I was working for this great company and I was about to get married.
The Saturday before my wedding day, somebody came knock on my bedroom door and yelled the company is on fire. At the time I was living around the corner from the said company. I could see the flames through my bedroom window. The warehouse had caught fire.
I ran out to the street and tried to get as close as I could. I was trying to make sense of what I was seeing.
Some self-appointed protection guard came and started creating a line around the company to prevent people from getting too close. Firefighters arrived probably 15 minutes after this line has been formed. Some of these people may have had good intentions but they were amateurs. When curious people tried to get closer to the building, they started yelling stay away the chemicals inside the factory might explode.
I started trying to tell them there were no chemicals inside and that there was no factory, I knew because I worked there, but that just seemed to make them angry and they made me stay even further than the rest of the people. The fire was put out in the very early hours of Sunday.
Sunday after the fighters decided it was safe to use certain parts of the building while the rest were still under inspection, executives and manager from the company started gathering in the conference room to assess the situation.
Monday morning when everybody came to work, the fire was news for most employees. We were not allowed into the building for several hours. We had no Disaster Recovery Plan, External Data Processing Center or Alternate Center of Operation. Recovery plans had to be created on the spot.
Within the assessment of the whole situation 2 issues were priorities related to my work. I was the liaison between Information Systems and Operations Management. I had also developed the system that calculated all the inventory transfers to the distribution centers. The first issue was that 100% of the finished goods in the central warehouse were lost, representing 60% of the total inventory company wide. The second issue was that the section of the building where the mainframe computers were located, was not yet released for use by the fire department.
The company was facing several problems from which I want to highlight 3 of them.
- A PR problem for this company, which was a direct sales company they needed to make all the Salesforce confident that the company was still a reliable source for their individual business.
- Rebuilding finished goods inventory as fast as possible
- Using the existing inventory to support sales as efficiently as possible.
We were able to get tapes from the computer room and take them to another company that facilitated some disk space and a couple of hours to print reports and download some critical information to be used on PC’s.
I was getting married on Thursday and a cancelation of the vacations I was counting on for my honeymoon was a real possibility.
Most of the areas of the company were rushing to enact reactions in synchronicity. Communication and Coordination were the order of the day. Area managers found a way to keep priorities clearly defined and interruptions immediately communicated. I myself was rushing to complete my part in coordination with the Information Systems and Operation areas. I modified the hard-coded parameters of the distribution system to redistribute finished goods through out all the country.
By Wednesday morning it was clear the vital functions of my responsibility were covered. Inventories were rebalanced in such way that sales suffered just a minor level of stockouts, contract manufacturers were responding quickly to refill finished goods at record speed, information systems were back on, enough to continue my plans and take my vacations
When I returned to from my honeymoon, I found that there were people pushing the local authorities to revoke the operation license of “such dangerous factory”.
Lessons Learned
Looking back, these are the conclusions I draw from that experience:
- Disasters are going to happen. Having a plan will save time that will be very valuable when having to react.
- Plans should not be too detailed. There are always going to be unexpected details, during contingency times there will be too many moving parts.
- During contingencies, communication and coordination are paramount. For this medium sized company, before social media, widespread cell phones, intranets, etc., the results were remarkable.
- Companies need to include PR as part of their Disaster Recovery Plans and have a clear visible face to the company to address social issues.
- Contingencies affect not only companies, but personal lives. The responsibility of the Disaster Recovery Plan should include all stakeholders, including customers, employees, stockholders and the community.
BIO:
Victor Granados, CC, CPIM, CSCP
President of the Ventura County Chapter of APICS
APICS IDP Master instructor for Operations Management (CPIM) and Associate Instructor for Supply Chain Management (CSCP) certifications
Sole Proprietor of Granados Systems & Processes Consulting
Victor Granados, CC, CPIM, CSCP
President
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