A hurricane blows through your region, ripping out the inside of your offices, leaving wind and water destruction. The roof at one of your branches takes a beating and will need repair. In another part of the country, an unexpected flood sweeps through one of your locations, soaking and ultimately destroying it, costing a small fortune in equipment the flood has rendered useless.
We read these types of reports quite frequently in the newspaper or sometimes view the wreckage in a news segment on a local television broadcast. Maybe we mutter, “Thank goodness that wasn't me,” and forget the news item within minutes.
If it didn't affect us, it did not, in a sense, really happen.
But we know that misfortune does occur, and when it happens to those we know and care about, such as a fellow HARDI member, we pay more attention.
Last September, HARDI Vice President Richard Cook learned firsthand the effects of a disaster. During Hurricane Ike, Cook, the president and COO of Houston-based Johnson Supply, witnessed severe damage at the company's main office in Houston, while several other locations in the 10-store operation suffered less damage. His Beaumont branch, however, suffered significant destruction.
It was a mini-nightmare for the company. Ike's fury affected electrical power and the ability to obtain water, food and gasoline. Indeed, in the storm's aftermath, not only had there been physical damage, but the inability to even arrive at work created a major impediment to conducting business. Fortunately, no one was hurt during the storm or the cleanup process. (According to Wikipedia, Hurricane Ike was the third most destructive hurricane to ever make landfall in the United States.)
If there was a silver lining during Ike's lashing, it was the storm's timing. It hit over a Friday evening and Saturday morning, probably mitigating some of the work interruption. Cook says the “wonderful” response on the part of employees saved the day for returning the business back to an operational status, as they worked feverishly over the weekend. They hurried to undamaged stores, got supplies and started to clean up, using portable generators for power. They also started contacting their customers and were able to serve them once again by Monday afternoon.
“You need a good contingency plan that involves reporting infrastructure (websites, phones, etc.) for people, customers and financial systems,” says Cook when asked what advice he would offer other HARDI members.
He urged members to have a contingency plan that called for 100 percent self-sufficiency for five days, which includes access to power, fuel, water, food and lodging.
He stressed the importance of computer backup off-site and of protecting on-site computers with waterproof and windproof coverings.
As well, Cook suggested that before a crisis, HARDI members should pre-arrange contractor contacts who can leap into action as quickly as possible.
He also suggests keeping cash on hand for purchases such as ice, food, supplies and security items.
If a disaster strikes a region, government officials could conceivably restrict access to your location. He suggests registering your business as a “critical industry” with local authorities (if that option exists), which might give you greater influence in obtaining access.
Then there is the matter of cost. The storm did a significant amount in direct damage, according to Cook. And Johnson Supply is still calculating the loss in business interruption, which may easily run into the six-figure range.
Finally, be sure to communicate with key suppliers about problems at the earliest possible moment regarding terms, delivery of product and similar issues. You have to assume almost anything can happen regarding potential destruction to your building and even the region.
It didn't rain for 40 days and 40 nights in Johnson City, NY, during late June and early July 2006, but storms did drop 15 inches of rain during a seven-day period.
It caused the Susquehanna River to crest and flood the area, which resulted in severe water damage to the main operation of former HARDI President Frank Meier.
It flooded his main distribution center, which also housed the executive staff, says Meier, president and CEO of Meier Supply Co. Inc., a 16-location operation.
The flood damage resulted in five days of being unable to replenish inventory at the branch level and a loss of slightly more than $1.2 million. “A huge loss for a company of our size,” says Meier.
While suffering significant damage, Meier says his employee-owned company “worked like crazy as a team to get the operation back into working order. What got us going were a phone tree plan and an action plan that got us moving the minute we discovered the flooding.”
A phone tree is a list of phone numbers, which unites individuals with a common cause during a crisis. A “first person” activates the phone tree by making several calls. The recipients of those calls then, in turn, call others on the list until everyone on the list receives a notification.
“We worked around the clock, and everyone pitched in,” he says. “We moved our IT equipment to a safer location and relocated some of the undamaged inventory.”
Meier offers some sage advice for HARDI members. “You can't prevent disasters; you can only make plans to allow as little harm as possible.”
Tom Peric is the editor of HVACR Distribution Business. Contact him at 856/874-0049 or at [email protected].