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Workshop II:

Workshop II:. Disaster…and Survival. Disaster…and Survival. Moderator Ed McLean, Advance Packaging Inc. Panel Scott Bittner, Hawkeye Corrugated Greg Arvanigian, Arvco Container Corp. John Petillo, Insurance Consulting Associates. Recovery Planning. Scott Bittner, Hawkeye Corrugated.

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Workshop II:

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  1. Workshop II: Disaster…and Survival AICC Spring Meeting

  2. Disaster…and Survival • Moderator • Ed McLean, Advance Packaging Inc. • Panel • Scott Bittner, Hawkeye Corrugated • Greg Arvanigian, Arvco Container Corp. • John Petillo, Insurance Consulting Associates AICC Spring Meeting

  3. Recovery Planning Scott Bittner, Hawkeye Corrugated AICC Spring Meeting

  4. Developing a Recovery Plan • 50% of the businesses that have lost their critical operation for 10 days or more never recover • 80% of the businesses that experienced a disaster without a contingency plan fail in 5 years or less AICC Spring Meeting

  5. Reasons to Create a Recovery Plan • To be able to react swiftly to a crisis and minimize the damage to the corporation and its employees • Customers are requesting disaster recovery documentation from their suppliers • Advent of just-in-time manufacturing processes • With the continued emphasis of single sources AICC Spring Meeting

  6. Reasons to Create a Recovery Plan (cont) • To protect the long term health of your organization • Two days and we begin to lose orders, four days and we begin to lose customers • Reduces the severity of a disaster • Reduces the potential of a disaster AICC Spring Meeting

  7. Plan Development Process • Plan Initiation • Business/Risk Evaluation • Plan Development • Training and Testing AICC Spring Meeting

  8. Plan Initiation • Senior management and ownership commitment • Develop the planning team • Establish the scope of the project • Create a timeline AICC Spring Meeting

  9. Business EvaluationCriticalInternal Business Operations • Communication • Fax • Telephone • EDI • Internet • Information dissemination (media, vendors, employees, customers) • Cellular System • Directories AICC Spring Meeting

  10. Business EvaluationCriticalInternal Operations, Processes, and Systems • Computer (hardware-software) • Hardware main operating system - Terminals - Cables - Printers - Connectors • Software operating systems - Back-ups - Off site storage - Internal storage AICC Spring Meeting

  11. Business EvaluationCriticalInternal Operations, Processes, and Systems • File Documentation • Production masters (blueprints) • Cutting die specifications • Printing dies specifications • Printing specifications…electronically stored, laser disk, paper copy AICC Spring Meeting

  12. Business EvaluationCriticalInternal Operations, Processes, Systems • Facilities • Hot site - Number of rooms required (war room, operations room, sales room) • Access • Manufacturing site (docks, size, utilities) AICC Spring Meeting

  13. Business EvaluationCriticalInternal Operations, Processes, Systems (cont) • Facilities (cont) • Warehouse site • Office supplies • Office equipment AICC Spring Meeting

  14. Business EvaluationCriticalInternal Operations, Processes, Systems (cont) • Equipment • Manufacturing equipment • Cutting dies • Plates…box certs. • Manufacturing Supplies • Maintenance Supplies • Schematics (electrical, mechanical) AICC Spring Meeting

  15. Business EvaluationCriticalInternal Operations, Processes, Systems (cont) • Processes • Order Entry • Payables/Receivables • Payroll • Estimating • Contractual Obligations AICC Spring Meeting

  16. Business EvaluationCriticalExternal Operations, Processes, Systems • Vendors • Paper • Finished Goods • Inks • Specialties - foam, plastics, labels • Glue, tape, stitching wire • Strapping AICC Spring Meeting

  17. Business EvaluationCriticalExternal Operations, Processes, Systems (cont) • Vendors (cont) • Maintenance Supplies • Forms - especially checks • Waste/Scrap Paper…mill or broker • Parcel Delivery - Fed-Ex, UPS, U.S. Mail AICC Spring Meeting

  18. Business EvaluationCriticalExternal Operations, Processes, Systems (cont) • Customers • Packaging Consumers • Primary Prospects • Fulfillment Customers • Financial Entities • Banks • Leasing Companies AICC Spring Meeting

  19. Business EvaluationCriticalExternal Operations, Processes, Systems (cont) • Utilities • Gas • Electric • Water • Transportation • Inbound Material Carrier • Outbound Material Carrier AICC Spring Meeting

  20. Business EvaluationCriticalExternal Operations, Processes, Systems (cont) • Transportation (cont) • Leasing Company • City or local cartage • Contract Carrier(s) • LTL Carrier(s) • To and from the plant AICC Spring Meeting

  21. Business EvaluationCriticalExternal Operations, Processes, Systems (cont) • Off site Warehousing • Finished Goods Warehousing • Raw Material Warehousing AICC Spring Meeting

  22. Business EvaluationCriticalExternal Operations, Processes, Systems (cont) • Services • Temporary Employment Services • Sub-assembly or work shops • Consultants - OSHA, EPA, DOT • Attorney • Insurance Agent(s) • CPA AICC Spring Meeting

  23. Identify Risks • Natural Disasters • Personnel/Human Disasters • Data/Technical Disasters • Business Disasters AICC Spring Meeting

  24. Types of Crises that have been Experienced by Business Organizations - Adverse Governmental Action - Computer Damage - Competitive Misinformation - Computer Viruses - Death of a Key Executive - Information Leaks - Death of a Key Customer - Leveraged Buyouts - Equipment Malfunctions - Labor Problems - Quotes (in & out of context) - Unethical Behavior - Grand-jury Investigations - Whistleblowers - Hazardous Material Spills - Landfill Sites Sources: Mitroff and Pearson, Crisis Management, Jossey-Bass Publishers, 1993 Castillo, J.E., Holmes Murphy & Associates AICC Spring Meeting

  25. Types of Crises that have been Experienced by Business Organizations (cont) - Accidents (major) - AIDS - Asbestos - Bad Debt - Bankruptcy - Foreclosure - Chemical Spills - Lawsuits - Takeovers - Chemical Abuse - Lying - Vandalism - Discrimination - Mergers - Weather - Embezzlement - Fire - Wind - Water (lack of) - Rumors - Sabotage - Contamination - Strikes - OSHA Sources: Mitroff and Pearson, Crisis Management, Jossey-Bass Publishers, 1993 Castillo, J.E., Holmes Murphy & Associates AICC Spring Meeting

  26. Potential Risk Evaluation • Risk Evaluation Form • Evaluation by multiple staff members • Severity of Risk • Numeric values • Onset of disaster • Speed of occurrence AICC Spring Meeting

  27. Business Impact Analysis Identify Risk Human Impact Property Impact Business Impact Internal Resources Internal Resources Probability Total Rank High 10 Low 1 Weak Resources 5 Strong Resources 1 High Impact 10 Low Impact 1 AICC Spring Meeting

  28. Plan Development • Establish plan format • Decide on plan media • Computer (format) • Hardcopy • Storage • Possession • Who and where AICC Spring Meeting

  29. Recovery Teams • Assign a Recovery Administrator • Establish team leaders • Create the required teams AICC Spring Meeting

  30. First Page of Recovery Document - Personnel - Insurance Carrier - Hot Site(s) - Hotel(s) - Home(s) - Alternative Business Locations - Telephone numbers - Telephone numbers of a person most likely able to contact (not immediate family) - Address - E-mails AICC Spring Meeting

  31. Second Page of Recovery Document • Evaluation of the disaster • ONLY Critical Operations, Processes, Systems • Personnel • Critical Operations • Critical Processes • Critical Equipment and Facilities AICC Spring Meeting

  32. Second Page of Recovery Document (cont) • Prioritize • Human security and safety issues • Communication • Systems and Processes • Production AICC Spring Meeting

  33. Divide the Plan by Topic • Communication • Numbers for the prearranged telephone transfer • Numbers for prearranged fax buffer • Equipment Requirements --phones, faxes • Dissemination of Information • Spokesperson (employees, media, government agencies) • Customers • Vendors AICC Spring Meeting

  34. Facilities • Hot Site • Requirements for temporary manufacturing • Requirements for temporary warehousing • Requirements for temporary office (portables) • Utility needs • Electric - voltage, amperage, volume • Water - volume, wastewater treatment • Gas - volume • Portables - generators, lighting, heaters, etc. AICC Spring Meeting

  35. Facilities (cont) • Security (new site, old site) • Construction Contractors • Requirements for a new or rebuilt manufacturing site AICC Spring Meeting

  36. Logistics • Transportation for product • Inbound • Outbound • Finished • Raw • Transportation of employees • Lodging (hotels, meals) • Intra-facility transportation (warehouses, office, hot site) AICC Spring Meeting

  37. Equipment Manufacturing • Equipment schematics and blueprints • Equipment manufacturing listing • Equipment brokers listing • Specific and minimum equipment needs • Staging • Warehousing • Riggers, electricians, plumbers • Material handling • Equipment, pallets, strapping AICC Spring Meeting

  38. Services • Consultants • Insurance carriers • Attorneys • Sub-contractors AICC Spring Meeting

  39. Testing • Reasons for testing • Feasibility of the plan • Identify shortcomings and oversights • Allows for training • Types of testing • Checklist testing • Segment or spot testing • Random testing • Simulation testing AICC Spring Meeting

  40. Divide the Plan By Disaster • Fire • Loss of key personnel • Storms • Computer/Data loss • Labor stoppage • Ect. AICC Spring Meeting

  41. Leadership Change Greg Arvanigian, Arvco Container Corp. AICC Spring Meeting

  42. Leadership Change • Leadership Transfer • Previous Management Style • Preparation for Transition • Employee Expectations & Responses • Options to Evaluate Continuing Business AICC Spring Meeting

  43. Leadership Change (cont..) • Transitional Issues • Role of the New Leader • Insurance • Banking • Key Managers • Employees • Suppliers AICC Spring Meeting

  44. Leadership Change (cont..) • Transitional Issues (cont..) • Customers • Family • Surprises AICC Spring Meeting

  45. Leadership Change (cont..) • Lessons Learned AICC Spring Meeting

  46. Leadership Change (cont..) • Developing a Contingency Plan • Family Member / Heir Apparent • Finding a Professional Manager • Insurance Protection • How Much is Shared • Key Managers • Others • When do you think Sell? AICC Spring Meeting

  47. Are you Adequately Covered? John Petillo, Insurance Consulting Associates AICC Spring Meeting

  48. Are you Adequately Covered? • Adequate protection for a disaster • Natural • Mechanical • Other • Proper and Adequacy Coverage's • Property Insurance • Business Interruption Coverage • “Key Man” Insurance in the loss of the Owner AICC Spring Meeting

  49. Disaster...and Survival Summary Ed McLean, Advance Packaging Inc. AICC Spring Meeting

  50. Disaster...and Survival Summary • Employees • Emergency Medical Training • Fire Responses • Internal • External • Where to go for Shelter & Headcount • Communication during the Event AICC Spring Meeting

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