December 19, 2017 Your Checklist for Disaster Preparedness

1 in 4 businesses never reopen after a disaster. Manufacturers need to engage in disaster preparedness to ensure business continuity.

By Miya Moore

According to the Federal Emergency Management Agency (FEMA), at least 1 in 4 businesses never reopen after a disaster. For this reason, it is important that manufacturers engage in disaster preparedness planning to properly respond to an emergency and ensure its business continuity. Every manufacturer should have an Emergency Action Plan (EAP) and Business Continuity Plan (BCP) to safeguard its survival and recovery in the event of an emergency. Both the EAP and BCP should be sufficiently integrated to mitigate hazards, warrant workplace safety and to protect operations.

Unfortunately, many manufacturers are not prepared for a natural disaster and often bear massive financial costs as a result – but this doesn’t have to be you. As stated by former FEMA Director James Lee Witt with respect to investing in disaster preparedness, “Every dollar we spent, saved five dollars in future losses. And it saved lives. That’s a big deal.”

Consider these 10 factors to include on your disaster preparedness checklist to safeguard survival and continued business operations during an emergency and in the aftermath:

Crisis Management Teams

One of the first items that manufacturers should consider is creating crisis management teams to plan for how to properly respond to an emergency. Crisis management teams should consist of key personnel who are responsible for analyzing and priming for an emergency that could have a devastating impact on your operations, market share and relationships with suppliers.

Personnel Training

The next thing to consider is training personnel on the course of action for an emergency and what to do in the aftermath. There are several avenues that manufacturers can use to conduct trainings. Consider having orientation sessions and full-scale drills to test emergency functions, emergency notification/communication procedures and equipment, and drills to simulate real-life emergency situations. More importantly, manufacturers should document any challenges they encounter during the training process and solicit feedback to determine whether any updates or changes are necessary.

First Responders and Community Organizations

Coordinating with first responders and community organizations such as federal, state and local government agencies, utility providers, insurance carriers, and local hospitals and medical facilities prior to an emergency can be very beneficial. These outside groups can provide resources in the event of an emergency and aid in resuming operations as quickly as possible.

Adequate Communication/Notification Procedures

Furthermore, manufacturers should communicate their emergency response and disaster recovery plans to all staff either electronically or by hard copy and should have adequate warning and notification procedures in place. This allows you to communicate with and account for everyone during the emergency and in the aftermath.

Human Resources

Next, there are an array of human resources issues that manufacturers should pay attention to when engaging in disaster preparedness planning, such as the potential for advance pay for employees, leave sharing plans, payroll production and plans for payroll continuity. Moreover, manufacturers should consider establishing a process for any management changes that may become necessary as a result of the emergency.

Data Backups

Data recovery and processing also are important for disaster preparedness. Manufacturers should coordinate with their IT departments to improve their current program or identify a program that protects and recovers vital records and information – both electronic and hard copy – for continuity purposes.

Vulnerability and Resource Priority

One of the more important things to include on your disaster preparedness checklist is analyzing your susceptibility to an emergency. This includes defining which departments would be most affected in the event of an emergency to determine what resources should be prioritized. Try to quantify the likelihood of an emergency by looking at past emergencies, geographic location, weather patterns and technology. Also, look at the potential costs of reconstruction, alternative locations and the potential loss of market share and product distribution.

Regulatory Compliance

Additionally, manufacturers must be aware of the impact on regulatory requirements during an emergency. Some include: the Family Medical Leave Act, proper maintenance of exit routes, adequate alarm systems and zero discrimination against personnel who comply with emergency evacuation orders.

Suppliers

Due to the interdependent nature of the manufacturing industry, manufacturing companies must also think about their suppliers and other organizations they regularly do business with if their primary contractor cannot service production needs due to the emergency.

Alternative locations

Manufacturers should consider having alternative locations to allow data processing and production to continue and minimize the impact of an emergency.

In sum, these 10 factors, though not conclusive, serve as a baseline that manufacturers should consider when undertaking disaster preparedness planning.

Miya Moore is an attorney in the Birmingham office of Burr & Forman, where she practices in the firm’s Labor & Employment practice. She may be reached at (205) 458-5352 or by email at mmoore@burr.com.

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