A Business Continuity Reminder from the California Fires

Last week, when I first heard about the fire in Malibu, I thought, Not again! Malibu is always on fire. But I really took note when the infernos multiplied, affecting San Diego, Ventura, Orange, San Bernardino and Los Angeles counties.

I remember in 1993 looking out the window of the Wells Fargo Bank where I worked, watching flames and smoky red sky on both sides of the building. It was as if the end of the world had begun in Laguna Beach.

However, according to national news – and from what friends in the area have said – this past week’s fire in Southern California was the worst in my lifetime. Aside from the claim that my best friend now has “black lung” and my mother dirtied five Swiffer Dusters cleaning the house, fortunately no one I know lost a home.

Yet, the acreage affected, according to an Oct. 27 Washington Post report, was more than 500,000, with at least 1700 homes destroyed. And the damage has been estimated at $1.5 billion, according to AIR Worldwide Corp. Also, as of Oct. 30, some of the fires weren’t completely contained.

With this amount of devastation in such a progressive area, it’s no surprise that tech firms were affected. In response to mandatory evacuations, Sony Electronics’ U.S. headquarters and its nearby assembly facility in San Diego had been closed for three days as of Oct. 24, affecting some 2,000 employees. Kyocera stopped production of chip packaging in the same area because a number of its 500 employees were unable to reach the factory. Directed Electronics in Vista experienced a power outage, while Irvine’s Gateway gave employees the option of working from home. Hewlett-Packard and Hitachi temporarily closed local facilities.

While the long-term business impact as a result of this downtime is unknown, according to the latest reports, these companies did not lose facilities to the flames. Nonetheless, if the wind had changed direction, the outcome might have been much more debilitating – a not-so-gentle reminder of the importance of a thorough disaster recovery plan.

Writing in Computerworld, Pepperdine University CIO Timothy Chester said, “The whole purpose of planning is to make sure you’ve always got options – so that when you find yourself in a situation, you’re familiar with what those options are, as opposed to having to think them through with very little response time.”

A good example of familiarity with disaster options is the case of Fawn Electronics in Elm City, NC. In June 2006, Circuits Assembly recounted the fire that completely destroyed the EMS firm’s manufacturing plant. While a catastrophe, the results of what came out of that fire are a reflection of good contingency planning and a great reminder for all facilities.

Fawn returned to production within a month after following strategic steps, starting with an assessment of damage on the first day. The company had a disaster response team in place to notify all associates. Personnel from the corporate office informed suppliers and incoming material was put on hold. Fawn contacted insurance companies immediately and management called customers. By the end of the first day, several temporary sites had been identified.

On day two, “procurement readjusted the MRP system (which was fully backed up) and began expediting the supply pipeline now that a temporary facility had been located.”

By day four, recovery was underway, with a construction trailer serving as a command center at the disaster site. By week’s end, equipment suppliers had brought in benchtop demo units, and larger equipment for automated production had been ordered. After 10 days, equipment from the fire that could be salvaged was relocated for sorting and handling. By week four, Fawn was shipping product from a subcontracted facility.

In this article, written by Fawn’s Art Rutledge and Kim Boykin, eight disaster tips are listed and they bear repeating. Key concerns to consider for a strong business continuity plan include:

  1. The company should have multiple ways to contact employees and should update contact information at least annually. Available emergency contact information should include contacts for immediate support and relocation.
  2. “Production support options should include a list of facilities capable of absorbing a total loss of facility capacity.” An understanding of agreement options should be available.
  3. “Insurance coverage should be reviewed at least annually and replacement costs should be carefully analyzed.”
  4. “Customers’ consigned materials and equipment insurance coverage should also be reviewed both at project launch and periodically for interoperability with your own insurance coverage.”
  5. “Backup strategies should include provisions for hard copy documentation and designs/programming for unique pieces of custom equipment.”
  6. Design data should be considered, as well as replacement lead-time issues for tools.
  7. “Have a basic crisis communication plan and a means of communicating with the local media.” Employees should know these internal policies.
  8. “Develop a spreadsheet to assess recovery activity status.” This should be a living document readily shared with recovery team members.

Preplanning and communication are crucial, and not just in the event of a massive fire. Threats to Southeast Asian and other area electronics plants from typhoons, earthquakes and power outages are known to occur as well. What is your company doing to prepare for Mother Nature?

Side note: Qualcomm has committed $1.5 million to relief efforts in the San Diego fires, while Arrow Electronics will match North American employee donations to the American Red Cross Disaster Relief Fund. We salute the generosity and efforts of these companies.