May 21, 2020 How Manufacturers can Reduce Damage from Severe Weather

Severe weather can be unpredictable, and damages to your company can add up quickly. Here are seven steps for your manufacturing business.

In 2019, severe weather caused USD 232 billion in global economic losses[1]. Manufacturing incurs a large part of these losses, whether from damage to machinery or infrastructure, disruption of supply chains, and, in extreme cases, a complete halt to production.

To a large manufacturing company, these losses can be devastating. To small manufacturers, they can be terminal. In fact, up to forty percent of small businesses never recover from a disaster[2]. How, then, do manufacturers cope with potential weather hazards? Answer: They plan for them.

While it is often impossible to completely avoid damage from severe weather, investing in the right tools and advanced preparation can keep losses to a minimum. Here are some steps you can take to make your company ready and resilient.

1. Designate an Incident Management Team

Create a team responsible for reducing the impacts on tangible assets, such as your work site, staff, technology, supplies, and supply-chain processes. Once activated by your executive management, the team is responsible for creating and implementing plans for incident management and communication, recovering assets, restoring services where needed, and ultimately, resuming business.

An Incident Management Team will look different in every organization. Larger companies may have a dedicated team of emergency managers and coordination specialists with a large support budget. Smaller companies may give those tasks to a single staff member such as a safety officer or engineer.

Whatever your company’s size, thinking through every possible weather disaster will take time and money. It’s worth investing in a team that is dedicated to understanding and meeting your severe weather needs, ensuring your staff and company are prepared for any severe weather event.

2. Develop and practice emergency procedures

Conduct an annual analysis to determine what type of hazards leave you the most vulnerable. From that analysis, develop emergency response procedures in order of priority. For example, if your company is located in the southeastern United States, it may be more important to focus on hurricanes and floods than planning around a potential earthquake.

Design response procedures and build training protocols for each prioritized hazard. All employees should be aware of their responsibilities in each scenario, no matter how small. Ensure your employees are prepared through periodic training and regular drills (which should be as realistic and thorough as possible).

Once you’ve developed your emergency procedures, inform everyone in your supply chain: vendors, customers, and other relevant parties. Should you change any part of a procedure, document it and inform all those involved. Your focus should always be on ensuring your procedures run smoothly and that everyone involved knows their role.

3. Have a contingency plan in case of shutdown

To minimize downtime, it is vital that you continue communication and stay connected. Provide a website or toll-free number where employees can check in, report their status, and keep up to speed on the status of your company. Distribute a 24-hour emergency contact list, including members of your crisis management team.

Should your facilities sustain damage from severe weather, you may need to designate a safe room for employees who need to stay onsite during or after a storm. Keep in mind that you likely won’t have many options for alternate work sites. You may need to quickly decide whether you’re in a position to continue production, or if it’s safer to reduce or even shut down operations. Determine the thresholds you would need to cross before halting operations, and what metrics you would use to calculate your distance to those thresholds. Ensure your company isn’t at a disadvantage by losing key functions or documentation. Do an audit of your records and protect the ones that are most vital. Back up any essential files and store them off-site. Ensure your electronic equipment is well-protected from water damage.

4. Prepare your damage assessment team

Once you’ve been given the all-clear to return to your workplace, ensure your employees are safe and take stock of your facilities. The team in charge of this process is your Damage Assessment Team (DAT).

Your DAT should incorporate members from throughout your business. Some common areas to choose from include security, legal, business continuity, facility staff, and Health, Safety, and Environment (HSE). Your DAT will likely be a subset of your Incident Management Team. No matter how your DAT is assembled, each team member should be thoroughly trained prior to a severe weather event through regular functional exercises.

Your DAT team is also responsible for reviewing your company’s stock of personal protective equipment (PPE). Depending on the situation, you may need hard hats, safety glasses, leather gloves and/or steel-toed boots, as well as common emergency supplies.

The DAT’s mission after a storm will be to assess and report the condition of the facilities to the Incident Management Team. This information can then be passed along to all employees with a plan for next steps.

5. Conduct regular risk assessments

At least once per year, conduct a severe weather risk assessment to evaluate your contingency and recovery plans. This shows which areas of your emergency plans need to be developed or enhanced. There are typically four areas where companies are the most vulnerable:

• Loss of infrastructure
• Employee shortage
• Employment safety
• Loss of essential functions

Ensure your plans take each of these areas into consideration.

6. Weather-proof your supply chain

Even if your company is not damaged by severe weather, your operations could be affected if the partners or vendors you depend on are impacted. Your response plans should include contingencies for when external parties are impacted.

Conduct an audit of all third-party contracts to ensure weather-related events, damages and total losses are addressed to a degree you’re comfortable with. If the vendor is critical to production, don’t hesitate to get specifics on their emergency response plans.

Your focus should be on maintaining a supply chain while keeping your employees safe. If you run a just-in-time (JIT) operation, be aware of potential disruptions to production and plan your supplies accordingly. Keep an active channel open with your entire supply chain before and during a disruption to keep its impact on production to a minimum. Notify your partners immediately if you think you may encounter a shortage. Used an agreed-upon checklist to assist in coordination between you and your supply chain partners.

Regularly check in with critical supply chain partners to make sure they have current response and backup plans to continue production. Identify a short-term alternative to each vendor, perhaps in a different location that would not be impacted in the same way, just in case.

7. Invest in weather detection solutions

Ultimately, one of the best ways to navigate severe weather is to enlist the help of a professional weather service like StormGeo. These services provide manufacturers site-specific reporting, tailored to the manufacturer’s needs and top concerns, with a familiarity with the manufacturer’s business that comes with regular interaction.

Weather detection services can empower JIT production facilities to anticipate severe weather events with pinpoint accuracy, enabling you to make the maximum use of your company’s supplies while reducing costs to a minimum. They can help you identify severe weather risks to an entire supply-chain so that you can activate contingency plans before it’s too late and keep your operations running.

Severe weather is unavoidable. In a time where we all find ourselves more vulnerable, one storm can break a production chain. The sooner you prepare for severe weather, the better off your company will be.

Ian Nicolson, Senior Industry Manager at StormGeo, has more than 14 years of experience delivering innovative business solutions for a variety of business sectors. He currently specializes in providing manufacturing companies with advanced analytics, custom forecasting and decision support solutions for their weather sensitive operations to ensure they fulfill their profitability, safety, operational and business goals.

[1] Aon Benfield, “Weather, Climate & Catastrophe Insight: 2019 Annual Report,” aon.com, accessed March 6, 2020, https://www.aon.com/global-weather-catastrophe-natural-disasters-costs-climate-change-annual-report/index.html

[2] US National Hurricane Center

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