Assign 7

Disaster Recovery

Name

Institution

CHAPTER 19

CUSTOMERS

Other People to Worry About

If we don’t take care of the customer … somebody else will.

—Author Unknown

INTRODUCTION

Successful businesses are built on the basics: supplying customers with the products and services that they want, when they want them, and at a price they are willing to pay. What would they do if you could not supply them with what they needed to run their business? How many times could this happen before their confidence in you as a supplier is eroded or fails altogether? Good customers are hard to find. It is always cheaper to keep the ones you have than to find new ones. Don’t wait until it is too late! Action steps must be identified to support your customer in the face of a disaster in your facility. A disaster plan that considers the customer is important!

The most basic step is to develop a customer notification plan. Properly implemented, such a plan builds a valuable image in your customer’s mind about your company and its usefulness to them. We have all experienced troublesome suppliers to our own businesses and value the ones that do not create problems for our operations. When a disaster strikes, it is imperative that your company’s hard-won reputation not fall victim to the calamity. You must consider the disaster’s impact on your customers and act decisively.

Our plan development steps by now should sound familiar. List what you want to protect, what the threats are, and then take mitigation actions to reduce the likelihood of the occurrence or the severity of a disaster. Of course, you then need to test it. A successful customer notification plan will strengthen the relationship between you and your customer. Just as your parents told you, “When life gives you a lemon, make lemonade,” this plan will demonstrate your commitment to top-quality customer service.

Throughout this chapter the term “product” means all manner of goods and services provided to your customer.

Once a catastrophe occurs, crews will be assigned to contain the damage and restore a minimal level of service. How will your customer find out if their orders will be delayed or are not coming at all? Will they learn this on the evening news? Will it be in the trade press? Don’t let competitors tell your story in a manner that is out of your control. It is unlikely that members of your sales force will be among the crews repairing your factory walls. Don’t leave them idle. They can assist in the long-term recovery by using their experience in dealing with your customers.

From a business continuity perspective, the best you can do at this point is to control the indirect damage this causes to your customers. As the saying goes, “perception equals reality.” To control the perception, the sales force staff will inform the most important customers personally. They will also assist the customer to minimize the shock a possible materials shortage will cause to their operations. We do this by notifying them of the situation, explaining to them what is already en route or available from intact warehouses, providing a realistic timeframe for restoring the flow of goods, and, if necessary, assisting them in locating equivalent products elsewhere.

These are the actions of a partner, not an adversary. Your customer still has a crisis, but now there are two of you working on it! Handle this poorly and long after your facility is operational again, the customer will only remember the time you forced them into scrambling for components. Use the tragedy to strengthen your supplier-customer bond by helping keep their business running. The long-term goodwill will be invaluable.

KEY CUSTOMER ASSESSMENT

Our first step is an inventory of who your key customers are (use Form 19-1 on the enclosed CD-ROM). Then, examine their buying habits to see which times of the year make them most sensitive to a problem. Third, add to the list any one-time customers currently under contract.

Who are your customers? If you are like most businesses, the 80/20 rule applies to your revenue stream: 80% of your revenue stream comes from 20% of your customers. All companies would like to be all things to all customers, but your efforts should focus on protecting core customers. This information might be extracted from historical shipping and billing data. Set a timeframe to reach back, perhaps 2 years, perhaps more, and total the amount of business each customer gives you. Place the big customers at the top of the list and sort in descending order, based on the amount billed. Drop the bottom 80% of customers from the list. Now, add back to the list any specific customers whose business you are cultivating or who have other significance to you.

Using this list of names, add contact information, such as contact names, addresses, phone numbers, and e-mail addresses. There may be multiple locations that buy from you or to which you deliver. Next, add the name of the salesperson who covers this account. In tough times, relationships are important. Now the list tells you whom to call, where to call to, and who should do the calling. The salesperson’s name is important because he or she may be sitting idle during disaster recovery.

For the customers on your list for the time period you specified, produce a month-by-month report of total orders or total billings (either one should do). Your goal is to dig out the buying patterns for the customer. You want to understand when the customer’s busy season is, which is when you need to be most dependable. The salesperson for this account can adjust the report based on experience with that customer. Before submitting that request, add to it a second report to break down the same time period by the specific products the customer buys. If you offer more than one product, in a disaster you may find your warehouse “fat” on some items and lean on others. It is likely that a disaster will affect some customers more than others.

In the case of specific contracts, either for one-time or ongoing purchases, you must check for a clause dealing with force majeure. This describes actions beyond your control, also known as “acts of God,” that prevent you from fulfilling the terms of your contract. This is especially important for contracts with penalty clauses. Note on the customer inventory sheet, next to the customer’s name, any agreements that contain penalty clauses and the products they cover. Invoking a force majeure clause means that the event could not have been avoided. A tornado isn’t avoidable, but an argument could be made that a warehouse fire was. If the other party demonstrates that you were careless in your fire prevention, penalty clauses in the agreement may be invoked. To do so, it must be established that your nonperformance was avoidable.

Some questions to consider:

1. If you cannot fulfill a contract, will you incur any penalties?

2. What is the financial and operational impact on your key customers?

3. In the event of a prolonged outage, how long can your customer withstand a loss of services or products?

4. Does your customer have alternative suppliers and supply channels?

5. How many days of inventory do your customers normally carry or are normally in the supply chain to them?

A Just-in-Time (JIT) supplier must have a documented and tested business continuity plan. Disasters happen to us all. One supplier’s failure can close down a customer’s production if products are not delivered on time.

Exceptions may exist, but most customers just want their goods delivered on time. Delivery credibility can be a positive (or negative) selling point for your company. Many materials managers maintain supplier scorecards to weed out unreliable providers.

With your plan in place (and tested), invite your customers to comment on how to keep them supplied in a crisis. It is in their interests as well as yours that you have a good plan. Invite them to observe a test and even allow them to select one of the disaster scenarios from a list you have prepared. They will see chaos, they will see people scrambling around, but more importantly, they will see how quickly order is restored to the situation and action begins.

This is a good time to further cement your relationship with them and ask them about their own recovery plans. This street runs both ways. Just as they want to ensure you are always ready as a supplier, you want to ensure they are always in business as a customer. This dialogue will be useful in developing or modifying your Supplier Notification Plan.

RISK ASSESSMENT

Looking at the other side of the issue, what are you to do if your major customer suffers a disaster? You need their future business. A quick risk assessment of the customer’s facility location may uncover those who might be closed by the same problem:

Hurricane (you are both on the coast).

Blizzard (scenically located in the Rocky Mountains).

Earthquake.

Other wide-area disaster.

To prevent nature’s destruction from closing your business, make a conscious effort to obtain customers spread over a wide geographic area. Customers are where they are and you handle as many as you can, but your risk will be reduced if they are spread out. Don’t let poorly prepared customers drag down your business as well.

DEVELOP A COMMUNICATIONS PLAN

OK! Now that you have an inventory of your customers, determine how you will communicate with them in an emergency. As always, the best way is by telephone, person to person. Face-to-face contact is fine but much too time-consuming. While traveling to the customer’s site, you are out of touch with the latest containment and recovery results.

It is much better for the customer’s purchasing agents to hear the first news of the calamity from you rather than from a newscast or your competitors. A newscast by nature consists of an attention-grabbing headline and few details. Your call will provide real information.

Before calling anyone, try to obtain a list of open and pending orders. Call those customers first. Lacking a list of orders, it is an executive decision as to which key accounts to call.

Contact your customers three times:

1. As soon as possible after the disaster.

2. Within 24 hours after the disaster with a clear picture of how this problem affects them.

3. When services have been essentially restored. Recoveries take a long time and your customers will be looking elsewhere. Do not wait until the last new nail is driven but when you can provide predictable delivery dates for their goods.

To facilitate the first call, a standard, written statement needs to be developed that can be used to inform customers of the problem. The statement should acknowledge the calamity, provide a few brief details, and promise to call them back within 24 hours with an update. If the disaster struck the factory but left the warehouse intact, don’t be afraid to say so. However, for the first message, all callers must use the same approved, guarded text.

An example text might be:

“This is to notify you that ABC Company has experienced a serious incident. A _________ occurred that has temporarily halted _____________. This may impact your order by _________. A detailed recovery assessment is now underway. We will contact you again within 24 hours with a full update to the situation and any impact it may have on your open orders. Thank you for standing by us in this moment of adversity. If you have any questions, please contact ________at _________.”

For the first call, it helps to know what they usually buy and when. Keep your conversations positive, but honest. You would want nothing less from them. If this is their busy season, they should be the first called. After reading the text, ask them how this will impact their operations. If it will be significant, then consider assisting them to quickly locate alternative suppliers.

The second call, 24 hours later, should provide specific and useful information to your customer. Tell them when you can deliver their products to them.

If the recovery will be long, help them locate another supplier. You may protect your relationship by acting as an intermediary between the customer and another supplier. It is doubtful you can charge a markup for your services but you are protecting a very valuable relationship.

If the recovery will be short, provide a best estimate for the resumption of shipments. If the goods now in shipping are sufficient for several days, this may keep your customer supplied for the short term. Once production resumes, send the next several shipments by express freight until the normal shipping channels are filled again.

This may sound somewhat strange but your competitors may become your supplier or your customer during a crisis. It all depends on whether you have the disaster or they did.

Do you have reciprocal-processing/servicing agreements with your competitors? In the event of a disaster, reciprocal-processing agreements should be available for immediate execution. For instance, a competing bank may clear funds for the customers of a competitor bank if the competitor bank cannot clear funds because a disaster has taken down its network. Or a competing airline may honor air travel tickets from other airlines in the event of a disaster that grounds the competing airline. It is good business and in the best interest of all competitors in the marketplace to make these kinds of reciprocal arrangements with each other, if possible, to minimize the impact of a disaster and be able to fulfill your obligations to your customers.

ACTION STEPS FOR YOUR PLAN

A customer notification plan is not necessary for small or well-contained disasters. It is only executed when your ability to deliver goods and services has been greatly diminished or temporarily halted. It is also used if a disaster is well publicized. The key items to cover in the notification are:

1. Conservatively estimate how long the facility will be out of service and what products are affected.

2. Establish what finished goods are available for shipment and allocate according to those customers who need them the most or as required by contract.

3. Gather the sales force and explain the situation. Provide general details of what may be damaged and what is intact.

4. Provide a copy of the preprinted text and explain any limitations on what should be said.

5. If the sales offices are not available, cover all expenses for them to call from home or from their cell phones.

6. For products affected by the disaster, identify alternative sources of materials.

7. Prepare the follow-up message for customers to set an expectation as to when the facility will be back to normal.

CONCLUSION

Don’t allow a disaster to become worse by failing to communicate with your customers. Most customers will work with you to get through the disaster if they are kept informed about the progress of your recovery efforts and status of their orders. Instead of a disaster becoming an opportunity for your competitors, make it into an opportunity for you to show your customers what a reliable business partner you are.

CHAPTER 20

SUPPLIERS

Collateral Damage

Advice is the only commodity on the market

where the supply always exceeds the demand.

—Author Unknown

INTRODUCTION

Every business has suppliers. If you have not been farsighted in dealing with the impact that a disaster may have on your ability to work with them, it may result in financial and operational hardships for your company. Some disasters have the ability to not only shut down your business for a time but could also affect your suppliers’ ability to provide the necessary goods for your business. If this happens, your business suffers. For example, if a tornado hits a section of the community where your supplier for raw materials is located, that supplier might not be able to produce the goods you need for your operation. Their building may be damaged, and their employees cannot get to work. Even if they still could operate, their distribution channel may have been affected. They may not be able to get trucks to their building so they can ship their products to you. Either way your business will be in trouble; your supplier cannot deliver the goods required for your business, which results in your not being able to satisfy and ship your customer orders. In turn, your customers won’t pay for unshipped orders, and you suffer serious financial problems.

KEY SUPPLIER ASSESSMENT

All companies, large and small, need to address how they will be affected by a disaster experienced by one of their suppliers. Businesses are linked together in the supply chain, each needing the other to complete the business cycle. The adage “you’re only as strong as the weakest link” is so true when it comes to the strength of the supply chain. Every business must work out with their trading partners how to deal with disasters that may result in the link breaking between the businesses.

As you conduct a review of your business practices and operations, identify the suppliers critical to your business. These suppliers can be local, national, or even international. Also, don’t overlook third-party influences. For example, if you buy products or services from abroad, then don’t just look at your supplier’s ability to deliver the products or services you need, but also consider the risk of the shipper not being able to operate or a delay or failure in supporting import/export documentation. Your supplier may be healthy, but the transportation method may be affected by the disaster. This was all so apparent when the disaster struck on September 11, 2001. For days after the attack, airline travel and even air cargo transportation was either completely at a halt or severely curtailed. Even though the disaster took place in New York City, Pennsylvania, and Virginia, the whole nation was affected. How prepared were you? Did you have an agreement with your suppliers on an alternative transportation plan or how they would supply their services to you?

Identify all business operations that could be affected if your suppliers are unable to provide the raw materials, supplies, or services required for your company to function. It is all too easy to concentrate on the major suppliers of products and services in your business, such as telephone, electricity, raw materials, etc., but do not forget to examine the role of all the firms you deal with, both large and small. Your smaller suppliers could be equally or even more important than your larger suppliers. For instance, your supplier for raw materials may not be affected by the disaster, but what about your advertising agency or printer? More often than not, a small local firm may be very critical to your recovery efforts. Without additional advertising or collateral, you may not be able to advertise or market your products effectively, even though you can manufacture them. If your ad agency or printer were affected by a disaster, would you have an alternative supplier?

Sometimes, there is no other supplier you could use. In such cases, one option is to store enough of the supplies so that you can function in the event of a disaster until you could get resupplied. For instance, if your business relies on printed material, such as direct mail pieces, to generate revenue, print additional pieces and store them in an off-site facility. In the event that your printer cannot supply these materials, you can use your stored supplies. Storing these supplies may have an additional cost, but not doing so could result in reduced sales and loss of revenues. What if you can manufacture your products, but you can’t use a local transportation company to deliver them to a larger shipper? Could these local suppliers be affected by the same disaster that has affected you? What alternatives do you have if you don’t have access to your local distribution channel? Can you rent your own vehicles to transport your products to your national shipper? Is there an alternative shipping method that you can use?

Several years ago, a regional shipper had a work stoppage because of a union strike. There was no natural disaster but an outage just the same. Those customers who didn’t have an alternative shipping method for their products lost millions of dollars in revenue because they couldn’t get their products to market.

Do not take for granted that your smaller and other third-party suppliers are not important in the supply chain; they just may be your “weakest link.”

Managing your vendors or suppliers in the aftermath of a disaster is critical. As with your customers, prioritization of your vendors is the key. Focus your business continuity planning on those suppliers that have the largest impact on your recovery efforts and are the most critical to the support of your business. Again, these may not be your largest suppliers! Set priorities for the management process on this priority basis.

Do you know who your supply chain partners are?

Large and small suppliers?

Service providers?

Security alternatives?

Public infrastructure service providers?

Other agencies and business partners?

Regulatory bodies?

The public?

The news media?

RISK ASSESSMENT

Failure of an important vendor can have a devastating impact on your business. Whether the result of a natural disaster or bankruptcy, your plan must include steps to manage the failure of an important vendor. This vendor could be supplying a critical component on a just-in-time basis, or it could be your ISP (Internet Service Provider) that is hosting your online ordering system. Quick action on your part could mean the difference between keeping your customers happy and losing business to your competitor.

The basic steps involved in handling the loss of an important vendor are to quickly assess the situation, mitigate the risks to your business, and develop a plan to keep the business moving while the vendor recovers or is replaced. Put together a small team of three to five people to handle the crisis; a larger team can cause you to waste valuable time arguing things in committee, and this is a time for quick decision making.

The selection of the right team members is important to the success of this effort. The team should have at least one member who understands the technical issues involved. Depending on the vendor, this might require someone familiar with the company databases, Web servers, or network infrastructure. Someone on the team should also have enough authority to cut through any red tape that might be in the team’s way. Team members should have experience with legal contracts and should also be able to evaluate new vendors if necessary. The team may also need to be able to negotiate service-level agreements with possible replacement vendors.

If the likelihood of the vendor not surviving is high due to a bankruptcy or major disaster, you may want to consider suspending all payments to the vendor. This is especially important if you have prepaid for some services. This will help to prevent any financial reclamation issues down the road.

The next step is to review carefully all legal contracts between you and the vendor. Make sure you understand your rights and obligations during this time. If a lawyer is not on your team, make sure you get advice from the corporate legal counsel. In many cases you will have a service-level agreement (SLA) that guarantees you a minimum level of performance and should provide for penalties if the vendor cannot meet the minimum service levels. An SLA should cover the following issues:

What is the minimum acceptable level of service?

What is the standard for measuring the service level?

How and when are service statistics calculated?

What is the process for notifying customers if service is affected?

Are there alternative sources of the service?

Once you have a complete understanding of the situation, your next step is to contact the vendor to discuss the problem. Work to help the vendor through the problem. If the vendor is providing technology, make sure you work out what you will need to continue operating. This may include software licenses, source code for custom software applications, architecture documentation for infrastructure providers, etc. Whether you ultimately switch vendors or see this one through the crisis, your first responsibility is to keep your own business functioning.

ACTION STEPS FOR YOUR PLAN

There are five steps to developing your plan to protect against supplier problems affecting your organization. These steps are:

1. Data collection.

2. Investigation.

3. Assessment.

4. Agreement.

5. Mitigation.

Data Collection

The first step is to collect your supplier’s vital information and data. Each internal department should appoint a supplier coordinator responsible for ensuring that the critical suppliers for that department or business unit are identified and documented. The department coordinator should document the process and specific approach to identifying the key suppliers. One good source for the initial identification process is to run an accounts payable list of current and past vendors. It’s pretty obvious that you need to identify and document the vital information of your current suppliers, but why include past suppliers? Past vendors are important because they may become your alternative vendors in the event that your current vendors cannot fulfill their obligations. Maintaining a dialogue with your past suppliers is extremely important for this reason. Some past suppliers may not want to work with you since you don’t buy from them any longer. Make sure you identify and document these as well so that if you need to select an alternative supplier, you don’t waste time finding out after a disaster occurs that a certain supplier doesn’t want to work with your business any longer.

Other means of identifying your suppliers should also be used because not all suppliers may appear on the accounts payable list. The supplier may not be paid through normal channels or there may be no payment for the service or product. Research “other” suppliers by conducting interviews with key personnel and research product documentation to identify suppliers that are not on the accounts payable listing. For instance, the supplier that packages your product may be a subsidiary of your company and no money changes hands for payment of their services. Their “payment” is only a journal entry in accounting. Missing this supplier as a key vendor may mean that if a disaster occurs, your products cannot be packaged and therefore they cannot be shipped to your customers. After each department has researched and compiled its supplier list, each coordinator should note the product or service that is supplied by the vendor or organization and how critical the product or service is to the organization. Each supplier coordinator should then assign an impact score for each supplier based on the criticality of the supplier’s product or service.

Apply the “KISS” (Keep It Simple Stupid) principle for developing your scoring system. Don’t overly complicate your decision process by dreaming up an intricate scoring process that requires a Ph.D. in mathematics to figure out and to maintain. A simple 1 to 10 scoring system is adequate, where 1 is very little impact and 10 is very high impact. The supplier impact score should relate to the impact on the organization based on the risk assessment for your entire organization, ranked by type of disaster and how critical the product or service is to the organization. Don’t give suppliers high-impact scores simply on the basis that they are your largest suppliers. As we saw earlier, your smallest supplier may just be the supplier that has the largest impact on your organization if they cannot supply you with their product or service in the event of a disaster. Use Form 20-1 on the CD-ROM to organize the data on your suppliers.

Investigation

The next step is to communicate with suppliers to determine how you will operate together in the event of a disaster. After you have collected and analyzed the data and completed your master supplier list, get in touch with them to investigate their capabilities and to achieve agreement on how to operate in the event either of you experiences a disaster. Don’t forget it’s to their advantage to work with you during this process. If you find a certain supplier is not cooperating and finds this process unimportant, then it may be time to find an alternative supplier. This supplier may be your weakest link in your supply chain; you must take measures to strengthen it!

The first step in forming a dialogue with your suppliers is to compose a letter that lays out the process that you are using for all suppliers and how each supplier fits into your supply chain. Let them know how important they are to your success in the event of a disaster. In the letter, ask a series of questions concerning their own ability to recover from a disaster. Some questions that you might ask them are:

Do you currently have a disaster plan?

Does your plan provide for supplying products to my business?

How important is my business to your supply chain?

Do you maintain safety stock for my products?

Form a dialogue with your suppliers to make them aware that you are formulating a business continuity plan and that their input into the plan is important and necessary in the event of a disaster. The next step is to mail out the letter to each supplier. Make sure you indicate when you want the questionnaire returned to you. Once you have received all the questionnaires back, arrange to discuss in person any concerns you may have in regard to their ability to keep you supplied with products or services. With each supplier, perform the appropriate level of investigation according to the priority and critical nature of the product or service. Determine if the supplier has completed a business continuity plan and to what extent that plan considers your operation. Determine if the plan adequately protects you, its customer, in the event that your supplier has to implement the plan in a disaster. If the supplier does not have a plan, offer to help develop one. You may even be able to charge for this service.

Discuss with your vendors the role they would play in the event that you experience a disaster. Discuss alternative processes in the event that suppliers could not deliver on their contracts to you. You might also want to explore changing your purchasing policy for certain products and services. Historically, your business might have purchased single orders from the lowest cost supplier. This may not be the best approach to help you through a disaster, as you might not be confident that the cheapest supplier on any one day will be able to supply you after a disaster occurs. An alternative policy could be to form a longer term relationship with a smaller number of trusted suppliers so that you can work with them to ensure continued supply in the event that you have to declare a disaster. This might cost slightly more money than a completely open approach to purchasing but it might pay off in the long run.

Assessment

Some questions that can be asked about a supplier to assess the impact criticality should include:

What happens if the supplier is struck by a disaster?

Will the supplier’s failure have an immediate financial or operational effect on your business?

Will the failure result in total or partial loss of support levels from your supplier?

Can you insulate your operations from this supplier?

Is there a workaround for this supplier?

Is this supplier a sole, primary, or secondary supplier?

What is your exposure based on alternative suppliers?

How long can your company function without the services or products from this supplier?

How does the supplier affect your operational processes?

Does your supplier have a business continuity plan in place?

Once each department has completed its individual supplier list and has scored the suppliers, compile one company supplier list that will now become the Master Supplier List. Once the Master Supplier List is completed, categorize each supplier by type of service or product. For instance, combine suppliers by raw material for production of your product; combine suppliers who supply communication services; and combine distribution suppliers that are used for delivery of products. The category type of suppliers will depend on your particular business and also on the number of your suppliers. If you have a large number of suppliers, you may want to break them down into very narrow categories; on the other hand, if you have a small number of suppliers, you may only have three or four categories. It all depends on your business.

Categorizing your suppliers is extremely important because it will allow you to see relationships of which you may not have been aware. It may point out that you may be able to consolidate suppliers to a smaller number. This will enable you to decrease your costs for certain supplies and streamline your supply channel, thus strengthening your supply chain. It may also point out alternative suppliers for the same products or services that you can use in the event that one of your suppliers has been affected by an outage. You may also find that any one supplier may be the only supplier in a particular category. This would indicate a potential weakness, or a single point of failure in your supply chain. Make sure that you address this issue immediately and determine if there is a quick fix for this potential risk. If there is not a quick fix then develop a separate plan to rectify this situation in the near future as soon as you are able. Once rectified, make the solution a permanent part of your business continuity plan.

Agreement

Agree with your critical suppliers on how you will deal with problems that surface as a result of a disaster. For instance, how will the supplier communicate with you if your communications lines are down? Do you operate with your supplier via EDI or another electronic means of communications? In today’s environment, look for ways to utilize the Internet to facilitate communications with your suppliers. Look for Web-enabled software that allows you to communicate orders, invoices, and other documents and information. Get your suppliers to agree to utilize these same communications methods in dealing with you. Document these agreements, develop operating policies, and document how these policies will be enforced if necessary. Investigate workarounds, such as producing paper copies for use rather than relying on computer-generated documents; this solution may not be elegant but it might just save your business. After a disaster occurs, communications lines or electronic means to communicate with your suppliers may be offline. The main point to remember is that during a disaster a reliable process is one that is repeatable and standardized, and where terminology and techniques are clearly defined. The process doesn’t have to be elegant to work; it just has to work until you are able to bring up your standard operating procedures.

One very important point is to agree with your suppliers on the framework for resolving any disputes that may arise during a disaster, theirs or yours. For instance, it may be pointless sticking to the letter of your supply contract in the event of a disaster. While you and expensive attorneys are arguing over the point in court, you still might not be getting the products, parts, or services you need for your business. Your business would not only suffer severe financial problems from not getting the products you need, but you will also spend valuable resources, time, money, and personnel on legal issues that could have been worked out in advance. You must avoid litigation during a disaster. You have leverage with your suppliers during this planning process to work out the details of how you will operate, utilize workarounds, and deal with problems. If you wait until the disaster strikes, your bargaining power is greatly diminished. It is always in your suppliers’ best interest to work with you during the planning stages of putting together a plan to determine how you will work outside the contract if the need arises. This planning process will also help you in future negotiations with other suppliers, as you can then include these agreements in a contract before you and they commit.

Depending on how important any particular supplier is to your business, you might want to investigate alternative sources. If you adopt this means, do not forget that merely identifying another vendor is not sufficient. You must ensure that the alternate supplier is in a position to supply you with your product or service as soon as possible after a disaster. The same assessment should be taken with any alternative suppliers as you did with your current suppliers.

Mitigation

As with any associated risk, events and factors that cause or even contribute to supply chain disruptions cannot always be stopped or even predicted. Any associated risk to your supply chain should be viewed as a possibility, and plans should be put into place to mitigate those threats or you should document why the risk is not worth mitigating.

Mitigation of these disruptions can be accomplished in several ways. One of the best methods is to establish a technology-based framework that will allow the prompt exchange of data and information about your supply chain activities. This framework allows the integration of data and information between your supply chain partners; it monitors your supply chain partners’ activities to detect irregularities and disruptions in the “chain.” It also provides for rapid resolution of disruptions as they are detected and provides a framework to manage the entire process to ensure continuity of resolutions as they occur. Some other mitigation factors to consider are these:

Current Inventory Information. Know what products you have in stock, where your products are being stored, who is shipping your products, and if any are in transit. Knowing when your products are arriving or the scheduled arrival of products can be crucial to determine how you will respond to a disaster and how you might deploy products to your customers in the event of a disaster.

Knowing How to Communicate with Your Suppliers. As stated, good communications with your suppliers in the event of a disaster is crucial! If your suppliers don’t know what is going on, how will they be able to respond to your requests? Knowing how to and whom to communicate that you have had a disaster may mean the difference in getting products or not.

Test/Test/Test. Documenting your disaster plans is essential, but that alone is not nearly enough. Exercising or testing your plan is crucial to the success of your recovery and the health of your company. Don’t just let the plan sit on your bookshelf and collect dust. Make sure it becomes a living breathing document within your organization. The way you will interact with your suppliers in the event of a disaster will depend on how accurate and up to date your plan is and if you have actually tested your plan. Like any procedure you have in your organization, if you have never tested it, how will you know if it will work?

CONCLUSION

In summary, the five elements in supply chain management continuity are these.

1. Data Collection. Identify every supplier to your organization, the products they supply, and how they supply them, as well as the product supply schedules and how you will operate with vendors in the event of a disaster. Collect data on your products or services, including how they are manufactured or delivered to your customers. Who are your alternative suppliers? Be certain that you collect all the data concerning your supply chain.

2. Investigation. Investigate alternative strategies with your supply chain. Can current vendors ensure product delivery if you or they have a disaster? Do they have a disaster recovery plan in place and are you an important element in their plan? Can the product be drop shipped directly to customers? Can existing inventory meet the demands of high-priority customers? Who are your weakest supply chain links? Can you strengthen these weak links through better communications or alternative processes or suppliers? Recoveries have a much greater likelihood of success when a company has already investigated their supply chain and has means in place to quickly react to a disaster with appropriate and tested procedure and policies.

3. Assessment. Once all your data have been collected and a thorough investigation of possible weaknesses and appropriate responses has been conducted, assess the risk associated with each supplier if a disaster or an event occurs. Identify by supplier the associated risk and the impact that may occur if the supplier is not able to fulfill its obligation to supply you with products or services. This assessment will determine the correct course of action to be taken if a disaster would occur and any additional cost that may be associated with the recovery.

4. Agreement. Form agreements with your suppliers on how they and you will react to a disaster should it occur. Don’t wait until a disaster to determine if there are any associated additional costs if your supplier has to use alternative shipping methods to supply you. Get agreement from your suppliers on how to deal with contract points. Don’t try to negotiate new contract terms while you are in a recovery process—and for sure don’t try to litigate a solution while you are trying to recover from a disaster!

5. Mitigation. As a company, you want a supplier that is a strong and viable partner, one that has planned for business interruption and has your interests as well as its own in mind. To ensure this, you should put into place a vendor management program while creating your disaster recovery plans. A vendor management program is a partnership between your company and your suppliers. Ensure that you have communicated to your suppliers the development of your disaster recovery plan and how they are important to its success. Work out any concerns they or you might have if they are not able to fulfill their commitment due to a disaster. If they do not have a disaster recovery plan in place, help them to develop one. The effort you take in helping them will be well worth the time if it clarifies everyone’s role in the event of a disaster.

Remember, business continuity planning in your supply chain is your responsibility; it is not your vendors’ or suppliers’ responsibility to manage the impact on your business.

CHAPTER 21

FIRE

Burning Down the House

Books have the same enemies as people:

fire, humidity, animals, weather, and their own content.

—Paul Valéry

INTRODUCTION

A fire can severely damage a business in many ways. The extent of the damage is determined by the fire’s location, timing, and size. Fires damage a business’s property through heat, smoke damage, and damage caused when putting it out. (Did you ever see the gusto with which a volunteer firefighter swings a fire ax?) Stolen objects can be recovered and returned. Water-damaged objects can be cleaned and restored. But burnt objects and documents are destroyed forever.

A fire can have far-reaching impact on a company’s profitability. Depending on the size and location of the fire, the damage may include:

Structural Damage. A fire can destroy or weaken walls, floors, ceiling/roof assemblies, and structural supports. Smoldering fires often make a home within walls, which must be opened so the fire can be suppressed.

Loss of Valuable Documents and Information. Financial records, personnel files, and a wide range of vital company records can disappear in a fire. Some of these documents can be reconstructed from other information sources; some of this information can never be recovered.

Injury or Death. Fire threatens the lives of your employees. Some of the physical injuries will take a long time to heal, and the mental injuries can take even longer.

Customer Relations. Your customers are expecting that the goods they have ordered will be delivered on time. A delay due to a fire will lessen their confidence in your reliability and may cost them lost profits.

Vendor Relations. Vendors deliver their goods on credit (terms often delay payment for 60 days or more). A fire that temporarily disables your business may delay your payments to them, thereby damaging your credit—or they may demand immediate return of goods already delivered!

Building Security. A fire is a major security threat to your business. Massive volumes of smoke pouring through your facility will sow panic among the employees. This makes an ideal opportunity for theft. Intentional fires are also set to cover up crimes.

THE ANATOMY OF A FIRE

A fire is a chemical reaction in which a fuel mixes with oxygen and is heated to a point where flammable vapors are created. A typical workplace contains numerous items that can become fuel for a fire, including furnishings, business records, interior finishes, display cabinets, office equipment, laboratory chemicals, and machining lubricants. Look around your office or workplace. Anything that contains wood, plastic, paper, fabric, or combustible liquids can fuel a fire.

The key ingredients of a fire are:

1. Fuel. Any combustible material.

2. Oxygen. The air we breathe is approximately 20 percent oxygen, more than enough to nurture a fire.

3. Heat. Something to raise the fuel’s temperature until it combusts.

Remove any of these elements and a fire will cease to burn.

A typical fire begins as a slow-growth, smoldering process. The smoldering stage may last from a few minutes to several hours, depending on the fuel type, arrangement of the fuel, and available oxygen. During this stage, heat will increase, and the fuel will begin producing smoke. A smell of smoke is usually the first indication that a fire is under way. Early detection (either human or mechanical) at this early stage can trigger fire suppression efforts before significant loss occurs.

As the fire reaches the end of the smoldering phase, flames will become visible. Once flames have appeared, the fire will begin to spread. The temperature of the burning object will quickly exceed 1800 degrees Fahrenheit. At this point, a room’s contents will ignite, structural fatigue becomes possible, and occupant lives become seriously threatened. Within 5 minutes, the room temperature will be high enough to ignite all combustibles within the room. At this point, most contents will be destroyed, and human survival becomes impossible.

As a fire progresses into open flames, some chemical interactions occur. Let’s use a piece of wood as an example. Wood contains all sorts of stuff, such as water, minerals, and volatile organic compounds. As the heat source applied to the wood exceeds 300 degrees Fahrenheit, the volatile organic compounds begin evaporating. This is typical of a smoky fire. Eventually, the fire gets so hot that these vapors begin to burn, which is typical of a fire with a lot of flame and not a lot of smoke.

Fires are classified according to their fuel, and the method used to attack a fire is generally based on the type of fuel that is burning. Each class of fire has some basic concepts that can be used to reduce the likelihood of an occurrence. The classes of fire are:

Class A fires are made up of ordinary combustibles, such as paper. Class A fires can be prevented through good housekeeping practices, such as keeping all areas free of trash and the proper disposal of greasy rags.

Class B fires are based on gases or flammable liquids. These fires can be prevented by never refueling a running or hot engine, storing flammables away from spark-producing sources, and always handling flammable liquids in well-ventilated areas.

Class C fires are ignited by electricity, such as an overloaded wall outlet. Sometimes, the electricity is still running when you move in on the fire. Class C fires can be prevented by inspecting for worn or frayed electrical wires and promptly replacing them. Never install a fuse with a higher rating than called for by the manufacturer. Keep electrical motors clean and monitor them for overheating. Always have a wire guard over hot utility lights to prevent accidental contact with combustibles.

Class D fires feed on flammable metals, such as magnesium. These fires are very difficult to extinguish and must be suppressed by use of a special firefighting agent.

RISK ASSESSMENT

Given the seriousness of a fire, what can you do to prevent one? The easiest and cheapest thing is to identify and eliminate potential fire hazards, and educate employees about these risks.

Begin by identifying what you are trying to protect. Offices move around, interiors get redecorated, and vital records repositories spring up in new executive offices. Rarely are a company’s fire protection plans updated to protect this ebb and flow of equipment and documents around an office. Begin by making a list of your facility’s critical areas and ensure they are adequately protected.

Next examine your building’s layout. Minimal fire safety is governed by local building codes and fire safety regulations. Violating these codes can shut your business as quickly as any fire! Hire a fire safety engineer consultant to evaluate the adequacy of your existing fire alarm and suppression systems. If money is an issue, invite the local fire inspector to perform this task. Inspectors will provide free evaluations of a structure’s fire risk, indicating both recommended and required changes.

An added benefit to using the local fire inspector is that the inspector can explain something about the fire potential of other occupants in the building or surrounding buildings, such as a facility that stores or uses combustible liquids, etc. Inspectors can also provide a wide-area picture of your fire threat and the ability of local services to contain it. Is there something in your facility that will require special fire suppression equipment to control a fire? For example, how quickly should you expect the first fire truck to arrive on scene? (This indicates the volume of fire suppression you should provide yourself.) Is your facility in the country or in the city? If your facility is in a rural location, do you have a pond nearby to refill the fire trucks?

Evaluate your facility’s fire program. If it isn’t written and available to employees, then it isn’t worth much. Ensure that the fire safety plan is incorporated with your other emergency plans as well. Things to look for include:

Automatic fire suppression systems to contain a fire. The most common approaches are gas fire suppression systems or sprinkler systems.

Internal barriers to a fire in the form of fire doors and firewalls to hinder the spread of a fire. Place special fire barrier emphasis on expensive computer and telecommunications rooms.

Well-marked emergency exits that are kept free from clutter.

Automatic fire detection to alert occupants and the local fire department. Automatic fire detection systems are especially important in areas that are not normally occupied, such as closets, attics, and empty rooms.

Manual fire alarms as a means to quickly alert all occupants to evacuate.

A system of fire extinguishers and fire hoses that can be used to contain small fires. Both types of equipment require trained operators.

Many fire hazards in the workplace are employee-related items, such as space heaters and coffee pots. Review any existing policies concerning the use of these items. Consider including these issues the next time that your company safety policies are reviewed:

Personal Space Heaters. These are popular in colder climates in the winter time. As companies economize by lowering workplace temperatures, some people compensate by purchasing personal heaters to place under their desks. The danger is that the heaters can start a fire. Heaters provide the elevated temperature necessary to start a fire, and fuel is all around it. Heaters may be overturned, left on after hours, or have something pressed against them that could catch fire. If possible, heaters should be banned. If that is not practical, then an acceptably safe heater must be identified by the company for all who need one.

Coffee Pots. Banning coffee pots is a fast way to make enemies all across the company! However, like all electrical appliances, the issue is that they may be of low quality or left on with no one to attend them. The best strategy is to select a high-quality coffee maker that is as safe as you need it to be in your environment (office, factory, warehouse, etc.). Require that someone occasionally checks to ensure that the appliance is turned off when not in use. A timed electrical outlet set to normal business hours can be used to ensure the pot is turned off at night.

Overloaded Outlets. Sometimes the tendency is to add more and more extension cords and surge protectors to a single outlet to feed the ever-growing flood of office electronics. This should not be allowed. A periodic safety inspection should be made of all work areas, and overloaded outlets should be immediately addressed with either the addition of more outlets or the removal of the extension cords.

General Housekeeping. Simple housekeeping can be a major source of fire prevention. Some people seem to want to keep their offices and workspaces as simple and uncluttered as possible. Others seem to be following them around and stuffing their papers into the recently cleaned-out areas. Excess papers and other materials are potential fuels to a fire. If you have valuable documents that you must retain, then treat them as such and store them properly. Utility closets and rarely used facility areas must be inspected regularly to ensure no one has started an unauthorized storage depot.

Another easy housekeeping issue is to ensure that nothing is blocking emergency exits or the paths to them. Sometimes boxes and factory components find their way into aisleways and around exit routes. These must be moved immediately. If they are truly needed, then an adequate storage place will be found. Otherwise, they need to go! Use Form 21-1, Sample Fire Poster, on the enclosed CD to help get the message out about fire safety.

BUILDING A FIRE SUPPRESSION STRATEGY

Once you have controlled the possible sources of fire, the next step is to look at how you will suppress a fire if one occurs despite all your efforts. Handheld fire extinguishers and automatic detection and sprinkler systems are the most common means of fire suppression.

A thorough understanding of fire safety systems can help you to evaluate your company’s existing safeguards to ensure they are current, adequate, and focused on employee safety. Before tackling a section in your plan for fire safety, be sure to inspect your existing company plans. This area may already be adequately covered.

Fire Extinguishers

Fire extinguishers can be used to contain very small fires, but they lack the capacity to attack large fires. The contents of a fire extinguisher determine the type of fire for which it is best suited. For example, using a water-filled fire extinguisher to fight an electrical fire would be a dangerous thing to do. Electricity from the source that started the fire may still be active and could travel up the stream of water and injure the extinguisher’s operator. The “class” of the extinguisher corresponds to the previously described class of fire. The types of extinguishers include:

Class A uses pressurized water to cool the material below its ignition temperature. This deprives the fire of its fuel. Never use a class A extinguisher on an electrical fire!

Class B uses foam, carbon dioxide, or a dry chemical to smother grease or flammable liquid fires. This deprives the fire of its oxygen.

Class C uses carbon dioxide, a dry chemical, or halon to smother the fire.

Class D uses a dry powder specifically for the metal fire being extinguished. In most cases, the powder dissipates the heat from the burning materials so it will cool below its combustion level.

An ABC-rated extinguisher is a multipurpose dry chemical extinguisher that is good for class A, B, or C fires. However, the extinguishing agent may leave a residue that is mildly corrosive and potentially damaging to electronic equipment.

A BC-rated extinguisher is a dry chemical extinguisher that is good for flammable fluids and electrical fires, but not suited to containing class A fires.

Fire extinguishers have conspicuous labels that identify the class of fire for which they are suitable:

ABC-rated extinguishers are almost always red and have either a spray nozzle or a short hose. Halon extinguishers look identical to ABC-rated units. These units are lightweight.

Water-based extinguishers are generally chrome colored and are quite large.

Carbon dioxide (CO2) extinguishers are usually red with a large tapered nozzle and are quite heavy. Care must be taken when handling these units because the contents are under very high pressure. CO2 extinguishers must be weighed to evaluate the volume of their contents.

After any use, fire extinguishers must be inspected and recharged. You cannot “test” a unit and then return it to its rack. It may not be ready for you when it is needed most! Most organizations have an ongoing maintenance program to inspect fire extinguishers monthly and to promptly recharge and repair leaky or discharged units.

Fire extinguishers are useless if no one knows how to use them. Include basic fire safety and the proper use of fire extinguishers in your company’s annual safety briefing. Rules for using fire extinguishers are:

1. Always fight a fire with your back to your escape route. If the escape route is threatened, leave immediately.

2. Remember the acronym PASS:

Pull the pin.

Aim at the base of the flames.

Squeeze the trigger.

Sweep from side to side.

In summary, know the location and type of fire extinguishers in your work areas—and in your home. Ensure they match the types of fires that are most likely to occur in these areas.

Detection Systems

Fire detection systems are required in most states to alert you to the presence of a fire and to protect human life. These systems enable you to contain a fire with minimal damage. The earlier that an alarm detects a fire, the more expensive the alarm will be and the greater maintenance it will require. However, in some areas of your facility, the extra expense will be well worth the cost.

Detection systems provide early warning to allow for evacuation and fire containment. Fires do not always occur when people are standing nearby. They can occur at night, in vacant rooms, in back closets, or even behind cabinets. Be sure that you have the proper detection system in all these places—and a way for someone to react to it. A fire alarm system that sounds at night when no one is there does you little good. It must be connected to a remote alarm monitoring facility (usually the same company that monitors your burglar alarms).

There are two signs of a fire that can be detected: heat and smoke. Both of these can damage your facility without flames ever touching an object. We already briefly discussed the characteristics of both a smoky fire and a fire that was more flame than smoke. As we cannot be sure if a fire will be a slow starter (smoky) or fast and furious (little smoke), you should install both types of alarms in sensitive areas.

There are three basic types of fire detection alarms.

1. Photoelectric detectors detect smoke from smoldering fires. These are fires that generate a lot more smoke than heat because of the type of fuel that is burning and the temperature of the fire. This is the most common type of detector.

2. Ionization detectors are better at detecting fires that have more flame than smoke. Flash fires can be ignited based on the fuel and heat source combination, such as in some industrial applications.

3. Temperature detectors detect excessive temperatures from fires or other heat sources.

A fire alarm system must do more than just ring a bell. It should:

Trigger the closing of fire doors.

Activate the early fire suppression system (usually CO2 or halon) if the fire is in that room.

Release electronic locks so that people can get out and rescue crews can get in.

Notify the people within the facility to evacuate. This should at least include both audible and visible (strobe lights) alarms.

Notify the fire department of the emergency.

In some cases, shut down automatic factory equipment.

Sprinkler Systems

Fire protection experts believe that automatic sprinklers are the most important feature of a fire management program. Properly designed, installed, and maintained, sprinklers are your first line of defense against a fire.

Fire sprinklers are the cheapest method of containing a fire while people evacuate a facility. They are most effective during the fire’s initial flame growth stage and will contain a fire’s growth within a few minutes of their activation. More than half of all fires are contained by one or two sprinklers. A typical sprinkler system will deliver 25 gallons of water per minute. Sprinkler systems offer several benefits to building owners, operators, and occupants.

Television dramas give sprinkler systems a bad name. It is highly dramatic to see a matrix of sprinklers begin spewing water across a large open office. Life, however, is a bit more mundane. Sprinkler systems only spit water from activated sprinkler heads. They do not waste water on a place where there isn’t enough of a fire to activate a sprinkler head.

These benefits include:

Sounding the alarm. Most sprinkler systems are connected to an alarm system that sounds when the sprinkler head is activated. Sometimes this is by detecting the flow of water in the pipe.

Sprinklers are always on duty. Even if no one is present when a fire starts, the sprinkler will activate.

Early detection reduces the amount of heat and smoke damage and allows for a more orderly evacuation of the facility.

Sprinkler control of fires minimizes intrusion opportunities because the fire is contained and detected early.

Insurance companies normally offer reduced premiums for buildings with sprinkler systems as compared with buildings without them.

When selecting a sprinkler, consider:

Desired response time. How fast do you want the sprinkler to kick on?

Criticality of what you are protecting. The value or importance of what the sprinkler protects can move you to a more expensive quick-reacting sprinkler system.

The volatility of what you are protecting.

Aesthetics.

Normal room temperature.

For most fires, water is the ideal extinguishing agent. Fire sprinklers apply water directly onto flames and heat. Water cools the combustion process and inhibits ignition of adjacent combustibles. Basic sprinkler systems are a relatively simple concept that consist of three primary elements:

1. A dependable water supply. Water must be available even if electrical service is lost.

2. Connecting the sprinkler heads to the water supply through a network of water pipes. Rusted, weak, clogged, or too-narrow pipes will reduce the effectiveness of a sprinkler system.

3. The sprinkler head. At intervals along these pipes are independent, heat-activated valves known as sprinkler heads. The sprinkler head distributes water onto the fire.

The sprinkler head is a valve attached to the pipe that is “plugged” by a fusible link. This link might be plastic, solder, or anything that melts at the desired temperature. While a fire is in the smoldering stage, the heat output is too low to activate a sprinkler. As the heat increases, the sprinkler’s thermal linkage begins to deform. If the temperature remains high, as it would in a growing fire, the sprinkler’s thermal linkage will fail within 30 seconds to 4 minutes. This releases the sprinkler’s seals and allows water to flow.

A sprinkler head has five major components: a frame, a thermally operated linkage, a cap, an orifice, and a deflector. Sprinkler heads vary among manufacturers but all use the same basic components.

Frame. The frame provides a structure that holds the sprinkler components together. Frame styles can be low profile, flush, standard, or concealed mounts. Selection of a frame type depends on the area to be covered, the type of hazard to protect, and the visual effect desired.

Thermal Linkage. The thermal linkage controls the water release. In normal use, the linkage holds the cap in place and keeps water from flowing out of the pipe. When the link is heated and gives way, the cap is released allowing water to flow. Common linkage types include soldered metal levers, frangible glass bulbs, and solder pellets.

Cap. The cap provides the watertight seal over the sprinkler orifice, held in place by the thermal link. When the thermal link fails, the cap is released and water flows out of the orifice. Caps are always made of metal.

Orifice. The opening in the water pipe at the base of the sprinkler valve is called the orifice. As its name implies, this is the opening in the water pipe where the water comes from. Orifices are about 1/2 inch in diameter. The orifice size may vary from larger for hazardous areas to smaller in home sprinkler systems.

Deflector. The deflector splatters the water stream shooting out of the orifice into a pattern that is more efficient for fire suppression. The deflector styles vary: mounted above the pipe, mounted below the pipe, and sideways in a wall mount. Deflectors mounted above the pipe are found in ceiling plenums. Below-the-pipe deflectors are commonly found in office ceilings—just look up!

A key element in your sprinkler system is a reliable water source. This can be from public water systems, rural lakes, or water cisterns. Wherever your water comes from, it must be ready when the sprinkler cap pops off or it has all been a waste of time.

If your water source is not reliable, then water must be provided from more than one source. The supply of water must be sustained until the fire is extinguished. Along with the sprinklers, the water supply may be called upon to support the fire department’s fire attack hoses. If so, then both requirements must be met. Things to consider when evaluating your water supply:

It must be resistant to drought. Dry conditions outside increase your fire chances. If drought dries up your water supply, sprinklers may not work to full capability.

Pipe failure can keep water from where it is needed. If your pipes cannot support the water flow, then again the sprinklers will not work to full potential.

In conjunction with the need for water flow is a need for water pressure. The water supply must be able to maintain a steady water pressure or a pressure tank system must be added.

Sprinkler water pipes are the way to ensure a steady water flow to the sprinkler head. Steel is the traditional material used. There are many other features available for sprinkler systems:

Alarms. The most basic fire alarms that are built into a sprinkler system are based on gongs that sound as water begins flowing in the sprinkler pipes. There may also be pressure switches and detectors at the sprinkler head to identify where the water is flowing to.

Control Valves. A control valve allows you to shut off the flow of water to sprinkler heads. If the fire is out, the sprinkler cannot stop by itself. Remember, that open sprinkler head is spewing about 25 gallons of water per minute over your carpets, desk, and down the hall. Once the fire is extinguished, the sprinkler’s water source must be shut off promptly. Shutting off the water to the sprinkler system is also useful for allowing periodic maintenance on the pipes and sprinkler heads. There is also a drain valve to allow the water in the pipes to drain out for easier maintenance. The control valve is kept locked to prevent an arsonist from disabling your sprinklers, so ensure a key is available when needed.

There are four basic types of sprinkler systems: wet pipe, dry pipe, preaction, and water mist. Wet pipe is by far the simplest and most common type of sprinkler system. In a wet pipe configuration, water pressure is constantly maintained in the sprinkler pipe. The advantage is that the only delay in action is however long it takes for the link to fatigue. The disadvantage is that the pipe may leak or the sprinkler head may become damaged and accidentally discharge.

Wet pipe systems have the fewest components and are the easiest to install. They are the easiest to maintain or modify. After a fire, they are the easiest configuration to restore to service. The major disadvantage to a wet pipe system is that the pipes must not be allowed to freeze. Frozen pipes may burst or weaken joints. Therefore the temperature of the building spaces with these pipes must be maintained above freezing at all times. This can be particularly troublesome if the pipes are run along exterior walls or in high ceilings in buildings located in very cold climates.

A dry pipe system uses a valve to hold the water out of the pipe. Instead of water, the pipe holds pressurized gas or air. When the thermal link is melted by the fire, the cap is released and the air in the pipe escapes. The water pressure pushing against the valve overcomes the declining air pressure and water flows to the sprinkler head.

Dry pipes are useful in unheated areas in cold climates. This prevents freezing of pipes, especially for exterior applications. Some people believe that a dry pipe is superior to a wet pipe because, if the sprinkler head is damaged, the surrounding areas will not be hurt by unneeded water. This is not the case. A dry pipe system would also leak and just deliver the water a bit later.

There are several disadvantages to using dry pipe systems. First, they are more complex to install and maintain. Second, the maximum size is limited, which makes it difficult to add on to an existing system later. Finally, there may be a delay of up to 60 seconds in the water flowing to a fire.

The most sophisticated approach is through the use of a “preaction” configuration. A preaction system uses a dry pipe approach, but the valve controlling the water is activated by a fire detection system. The preaction system uses a two-step process to fire suppression. The first step is when a fire detection system detects a fire. This releases the valve and allows water to enter the pipe. The second action is when the sprinkler head’s thermal link fatigues and allows water to flow onto the fire.

Disadvantages of the preaction system include higher initial costs and higher maintenance costs. There is also a short delay while the air in the pipe is displaced by water.

A variation of the preaction configuration is the deluge system. A deluge system is triggered by a fire detector and releases water through all the sprinkler heads over a given area. Deluge systems are used wherever high-velocity suppression is required, such as a paint booth and in chemical storage areas.

An emerging technology is a sprinkler system that uses a water mist to suppress fire. Micro mists discharge fine water droplets at a very high pressure, which has been shown to control fires with very little water. This technology minimizes secondary water damage to your property.

An automatic sprinkler system is your best first line of defense against fires. A properly designed and installed system is very reliable. If your sprinkler water pipes will be subject to freezing temperatures, use a dry pipe or preaction system. Remember, most system failures are due to poor maintenance. Always consult a sprinkler system professional before selecting or modifying a sprinkler system.

ACTION STEPS FOR YOUR PLAN

Two areas that should be included in your plan are storage that can resist the fire for your important documents and the evacuation of personnel safely from the building.

Fire-Resistant Storage

One defense against the damage caused by fire is the use of fire-resistant storage, which can be anything from a small cabinet to a large room. Fire-resistant storage is based on preventing combustion by removing oxygen from a fire (remember the three key ingredients of a fire?).

“Fireproof” containers consist of thick walls and a tight-sealing door. These containers are called fireproof because their thick insulated walls will protect documents and other valuables against a small, short-duration fire. The containers themselves are fireproof and will not burn, but the contents are what you really want to protect.

In a large or long-duration fire, the benefit of these containers is less complete. As the heat outside the container rises, the thick insulation walls slow the flow of heat into the container. If the container remains in the midst of a hot fire, eventually the interior temperature can rise high enough to begin a smoldering fire. This incipient fire will quickly die as soon as the oxygen within the container is consumed.

Depending on the amount of heat applied to the container, the contents can still be seriously damaged. At high interior temperatures, flammable materials will still char (until the oxygen runs out). Magnetic media will deform at temperatures above 125 degrees Fahrenheit and 80 percent humidity, much less than the heat required to burn paper.

Underwriters Laboratories has a standard for evaluating the protection value of a storage container. A “one hour fire rating” interior will not exceed 350 degrees Fahrenheit when exposed to an external temperature of 1700 degrees Fahrenheit. A “two-hour-rated” container would withstand this temperature for 2 hours and withstand a drop of 30 feet (since a fire of this magnitude would probably also cause structural failure).

After the fire has passed, you must allow adequate time for the interior to cool below the fuel’s flash point. Remember, the container starved the fire for oxygen. The interior still has fuel (your valuable documents). If high heat is still present and you open it, then you get to see your documents flash into smoke before your eyes! Always allow plenty of time (at least a day) before opening a fireproof container after a fire.

What does a typical business need to store in a fireproof container? Begin with:

Cash, checks, and securities.

Software licenses.

Magnetic backup media (use a container specifically rated for this).

Engineering documents, including work in progress.

Any legal papers difficult or impossible to replace, such as tax documents.

Works of art.

Precious materials.

Other steps to take include:

Make copies of critical documents and magnetic media and store them in a different building.

Place fireproof storage containers in your facility where they won’t fall through a floor weakened by a fire (such as in the basement or on a ground floor) and where there is minimal material overhead to fall on it and crush the container. Ruptured containers will let the fire in to burn your documents!

Evacuation Planning

An essential part of any emergency plan is to provide a way to safely evacuate the building. A well thought out evacuation plan will ensure that everyone has left the building and that no one was left behind. This helps the fire and rescue squads to focus their efforts on locating people known to still be in the building. Without an accounting of who may be still inside the structure, the fire department may needlessly risk their lives searching the entire structure, wasting time they could be using to contain the fire damage.

Evacuation plans come in many forms.

1. Evacuate the Building. Everybody out, due to perhaps a fire or earthquake.

2. Evacuate the Area. Everyone must leave to avoid a natural disaster such as a hurricane or a forest fire.

3. Evacuate into a Shelter. Leave your offices for the storm shelter for safety against a tornado, etc.

Normally, evacuation involves getting everyone out of the facility as quickly as is safely possible. Evacuation planning is an 11-step process.

1. Determine the conditions that would trigger an evacuation.

2. Establish “evacuation supervisors” to ensure areas are clear, to assist others, and to account for everyone at the rendezvous site.

3. Pull together a system for accounting that everyone is out of the building or in the storm shelter.

4. Assign someone to assist anyone with disabilities and those who may not speak English. This is important in your customer areas, reception room, delivery driver lounge, or any other area where outsiders may be in your facility. They need someone to show them what to do and where to go.

5. Post evacuation procedures around the facility. Also, post maps showing the nearest building exits. Identify primary and alternate evacuation routes. Ensure they are clearly marked.

6. Designate key people to shut down critical or dangerous operations during the evacuation. This might be transferring toxic chemicals, halting automated paint spraying operations, or disconnecting power to high-voltage equipment.

7. Designate someone to quickly secure the petty cash box, close the safe, and lock all cash registers before evacuating the area.

8. Ensure evacuation routes are always kept clear and unobstructed by material. They should be wide enough to handle the volume of people that may need to use them. The route should not take anyone near other hazardous areas in case the disaster spreads rapidly.

9. Install emergency lighting in case electricity fails during the evacuation. Some companies also install “knee-high” exit signs near the floor so that anyone crawling under the smoke can still find a building exit.

10. Designate outside assembly areas for each section of the building. Assembly areas should be well clear of the structure and clearly marked so they are easy to find. Some companies use signs on their parking lot light poles. Assembly areas should be located away from the roads required by the emergency crews so they do not interfere with incoming fire trucks.

11. Actions in the assembly areas should be clearly understood by the evacuation supervisors. To facilitate the headcount, department rosters should be kept adjacent to the evacuation exits so they can be picked up on the way out. These rosters list the name of every employee and long-term contract worker by department.

a. Keeping rosters up to the minute is an impossible task. Instead, use the roster to see if the normal staff is accounted for. Ask if the missing are out sick that day or known to be working elsewhere in the facility.

b. Ask if any other contract employees were working in the area that day.

c. Ask if any visitors were in the area that day.

d. Forward the completed roll call results to the Evacuation Command Center as soon as possible. Note the names and last known locations of any missing people. DO NOT reenter the building as these people may be at a different rendezvous point.

In some emergencies, you will evacuate your workspaces and head to the storm shelter. This might be as protection from a tornado. Evacuation supervisors will ensure the orderly entry and exit from the shelter and ensure that space is fairly allocated.

Employee training is essential if plans are to be executed as written. Training should be a part of initial employee (and long-term contract worker) orientation. An annual refresher class along with an evacuation drill will improve employee understanding and reduce some of the panic and chaos of an actual emergency.

FACTS ON FIRE

Fire in the United States:

The United States has one of the highest fire death rates in the industrialized world. For 2006, the U.S. fire death rate was 13.2 deaths per million population.

In 2006, 3,320 Americans lost their lives and another 16,705 were injured as the result of fire.

Approximately 100 U.S. firefighters are killed each year in duty-related incidents.

Each year, fire kills more Americans than all natural disasters combined.

Fire is the third leading cause of accidental death in the home; at least 80 percent of all fire deaths occur in residences.

Direct property loss due to fires is estimated at $8.6 billion annually.

There were approximately 1.5 million fires in the United States in 2006.

Residential fires represent 22 percent of all fires and 74 percent of structure fires.

Eighty percent of all fatalities occur in the home. Of those, approximately 85 percent occur in single-family homes and duplexes.

Causes of fires and fire deaths:

Careless smoking is the leading cause of fire deaths. Smoke alarms and smolder-resistant bedding and upholstered furniture are significant fire deterrents.

Heating is the second leading cause of residential fires and the second leading cause of fire deaths. However, heating fires are a larger problem in single-family homes than in apartments. Unlike apartments, the heating systems in single-family homes are often not professionally maintained.

Arson is the third leading cause of both residential fires and residential fire deaths. In commercial properties, arson is the major cause of deaths, injuries, and dollar loss.

Source: U.S. Fire Administration - www.usfa.dhs.gov

CONCLUSION

Fire is one “natural” disaster that knows no geographic boundaries. Where there is fuel, oxygen, and heat, you can have a fire. The key elements to avoiding a disaster caused by fire are:

1. Assess the risk to your business.

2. Have policies in place to reduce the risk from fire.

3. Have appropriate detection mechanisms in place.

4. Know how to extinguish a fire as quickly as possible.