Volume 41, Issue 12 - December 2006

FMA Insights

Hindsight is 20/20
Rebuilding After a Catastrophe
by Kristin Leonard

2005 was quite a year for our company. Our plant is in Slidell, La.—a city impacted heavily by Hurricane Katrina. We were flooded and left without power for several weeks. Almost 70 percent of our employees moved. For a while, our future looked dark. But, with much hard work, we rebuilt and are stronger than ever. 

As I think about that year, I think about the things we could have done better, about the things we did well, and about the things we learned. Take a moment to ask yourself, “What if my plant caught on fire, flooded, was struck by a tornado, or hit by an earthquake?” How prepared are you to restore your company and employees? 

Keeping Communication Going 
Reestablishing communication with your employees is critical. We had the foresight to collect a contact list of employee contact information and bring it with us when we evacuated. Later, we realized that the list contained mostly employees’ home numbers, mixed with only a few cell phone numbers, and even fewer relatives’ alternate contact information. 

Ask yourself, “If conventional communication is interrupted–how will we communicate with our employees?” Consider ideas such as an employees-only message board on your website, an alternate phone number to which you can forward your office lines, or perhaps a cell phone number dedicated to emergency use only. Whatever creative ideas you decide to implement, communicate them to everyone in advance so everyone knows what the plan is. 

Keep Employees Informed
Your next challenge is that your employees will want to know the status and condition of your plant. What they are really asking is whether they still have jobs and whether their pay will be interrupted. One thing we did very well was to process payroll by direct deposit. We had this system in place before the storm, so we were able to process payroll via a laptop and to get our employees the money they needed. 

Back Up Data
The other critical asset is your computer data. Many companies back up their data nightly and take the data off site. Does your company test its backup systems to ensure that your data is recording correctly? Moreover, if your server were not accessible, could you upload the backups quickly and start using them? Do you need a computer with your particular operating system or a specific program to view the data? 

Right before we left, we sent our data to our software vendor in Illinois. Our vendor uploaded our data to its server and set up remote access for us to use via laptop from our ever-moving evacuation site. We were not able to access the data on our server for several weeks. That remote link was where we obtained information for customers.

Get the Proper Insurance
Floodwater damaged all our core manufacturing equipment. CNC saws, four-point welders, twin-head two-point welders, CNC corner cleaners and XYZ glass cutting equipment all had damage to control boards, wiring harnesses, circuit panels and other parts. Unless you buy specific insurance coverage for flood, your insurance will not cover loss due to rising water. If you are not in a designated high-risk zone, flood insurance may seem like a needless expense. However, I promise you that if you ever need flood coverage, you will be grateful you bought it. Take a few minutes to read your policies and make sure that your business interruption insurance is linked to your flood and hazard policies. 

If you make an insurance claim, you carry the burden of proving and documenting your loss. Could you give an accurate itemized loss? How would you substantiate your claim? Do you have a log of your assets with photographs (or videotapes) and sales receipts? Could you prove how much revenue and profit you lost? Is this crucial information kept off-site? 

I hope that this look back will help you in your business. I encourage you to think through all the logistics and scenarios that a catastrophe may bring. Walk through the process in your mind. Write down your findings. Think about the people with whom you will have to interact and about the roles that they serve. What information will you need to provide them? What is important to them? And, most importantly, what information will you need?

They say that the best insurance is to be prepared. I hope this is true for you. 

Kristin Leonard serves as general manager for Alliance Windows in Slidell, La., and is a member of the board of directors of the Fenestration Manufacturers Association.

© Copyright 2006 Key Communications Inc. All rights reserved.
No reproduction of any type without expressed written permission.