ILMA Compoundings - June 2020 - 20

how much inventory would remain for shipping to customers in a manufacturing shutdown.
Tests should also examine staffing capabilities, providing
insights on who is essential and how operations would proceed
under diminished staff. They can also generate data to inform
decisions around such disaster-related questions as when to
trigger force majeure clauses or when to dip into cash reserves.
Stress tests are a business essential, said Sandler. "Otherwise, you may be forced to react to things as they happen,"
he said. "If you run a stress test, you can identify certain
areas of risk and plan accordingly."

Communications
A truly functional preparedness plan is tailored to the
distinct needs of every business, but communications is a
vital element to each.
"If you wait until the point that there is a disaster or
emergency to lay the groundwork for how you communicate to
employees, it may be too late," said Moreno. Basic information
to be conveyed can include when or whether employees can
come to work, any special requirements in order to work and
whether absences would be paid or covered by leave policies.
South Coast Terminals assures workable lines of communication through advance planning for remote working
and access to off-site servers, gap analysis after major events
such as hurricanes and floods, and revisions to address any
weaknesses discovered in the initial plan, said Griffin.

Keeping the Supply Chain Open
Each region faces unique threats based on geography and
weather, but disaster plans should also consider those disasters not likely to roar through, because they can still disrupt
the supply chain.
When Henry and his team revised BG Products' crisis-response plan, they "looked around the globe to see what snuck
up and surprised people." Realizing that any supplier could
be impacted by crisis, they decided to enhance the company's
second- and third-tier vendor supply options. While longterm relationships with key partners remain vital, new lines
were opened to vet and qualify backup suppliers.
The effort also prompted a search for suppliers closer to
home, said Henry. The relationships help assure shorter lead
times for shipments in case supplies coming from other
states and along the coasts are waylaid.
As manufacturers vet their vendors, the crisis-response
plans of those suppliers should be part of the investigation.
"It's important to know what their policies are and whether
they're going to be able to continue to supply you," said

JUNE 2020

| COMPOUNDINGS | ILMA.ORG

Moreno. "That hinges on what your inventory of raw
materials will be and also how diverse your supply chain
will be, so if there's a specific problem with one supplier, it
won't affect you, because maybe you'll be able to switch to
an alternate supplier."

The People Factor
Top-down leadership and involvement is key to devising a
plan that people follow. From there, infusing the plan and a
crisis-response mindset into the company culture takes time
and constant communication.
In addition to weekly and monthly trainings and
post-mortems to review lessons learned, South Coast
Terminals aligns its activities with the seasonal calendar.
Before every hurricane season, refreshers are held on the
disaster-preparedness and response plan, said Griffin.
Measures taken to support employees during emergencies
will vary by company and by disaster, but officials agree that
the steps taken reflect company culture. "If a company has a

"If a company has a people-oriented
culture, their crisis-management plan
will be as people-oriented as possible."
Jeremy Henry, director of operations, BG Products Inc.

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ILMA Compoundings - June 2020

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