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Thursday, Oct 6, 2022

Disaster Plans Must Be Tailored to Each Business’s Needs

The market for business continuity and disaster recovery services is definitely not one-size-fits-all.

Marc Simon, CEO of Rubio’s Restaurants Inc., considers refrigerated trucks an asset in dealing with calamity. But that’s not the case for the nearby golf or action sports manufacturers in Carlsbad, whose concerns might cover international supply chain issues.

Customer needs vary depending on business size, vertical market, geographic location…and type of disaster.

Technology firms American Internet Services, RedIT and ScaleMatrix can all help businesses thoughtfully prepare their IT systems for a disaster (see accompanying story).

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However, not all preparation is technical.

When power failed for 12 hours on Sept. 8, 2011, the Rubio’s CEO suddenly found himself facing a food-safety problem. Freezers at his Southern California stores had no power.

Rubio’s has “very stringent procedures” to keep food at the proper temperature, Simon said. If that effort fails, “we’re not afraid to throw stuff out,” he said.

A Low-Tech Problem

Meanwhile, the blackout uncovered a very low-tech problem at the corporate offices. While store employees were able to communicate well during the power failure, Simon realized that the 70 people at headquarters didn’t have a good list of each other’s cellphone and home phone numbers.

“The key to this whole thing,” Simon said, “is being able to find people, and being able to communicate.”

It’s far better for employees to get information from reliable sources than from third parties, the executive added.

Food service brings industry-specific disaster preparedness measures. Rubio’s, like other restaurant chains, has the option of signing deals with distributors to deliver refrigerated trucks to strategic locations if needed, Simon added.

Faraway disasters can affect Southern California businesses, too. “Every supply chain is global,” said Joel Sutherland, managing director of the Supply Chain Management Institute at the University of San Diego.

The March 2011 earthquake, tsunamis and radiation leak in Japan “created huge problems” affecting industries such as automobiles, Sutherland said.

Businesses anticipate the effects of politics, labor issues, terrorism and technology in addition to natural disasters, Sutherland said.

Creating an atmosphere of communication among employees can help businesses spot disruptions in their supply chains early and head off trouble, notes Yossi Sheffi, a professor at the Massachusetts Institute of Technology.

Listening for ‘Nuance’

Sheffi, author of “The Resilent Enterprise,” counsels businesses to emulate the communication on board a U.S. Navy aircraft carrier. There appears to be a lot of chatter, Sheffi said, but what people are listening for is nuance — the sense that something is not quite right.

“Resilient companies communicate obsessively,” he said during an appearance several years ago in San Diego.

Business interruption insurance can be important in a crisis, noted Simon, the food executive.

“Failure to buy the coverage usually puts the companies out of business,” said Pat McQuade of Barney & Barney, the San Diego-based insurance brokerage.

The coverage can also be confusing, McQuade said. And it is easy, she said, for clients to underestimate the limit on the coverage they will need, and the time it will take to rebuild.

Above all, preparing for disaster can be a guessing game.

As the London newsweekly The Economist pointed out in its recent coverage of Hurricane Sandy hitting the East Coast of the United States: “Each new disaster tends to surprise firms that thought they had good plans in place.”


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