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Emergency Preparedness FMJ Article
Weathering The Storm
Michael R. Smith
Kohler, Wis., USA, July 18, 1996: The Kohler Corporation
shuts down manufacturing for the first time in its history
and sends its people to safety. An F-5 tornado, the most
intense category, passes within a few miles from the plant,
injuring 12 people. Everyone at Kohler is safe.
Georgetown, Ky., USA, January 4, 1999: A Toyota Motor Manufacturing
plant experiences a normal day of production after an ice
storm rages across the Southeast. Based on information provided
by a unique weather risk management system, Toyota secures
additional assembly line parts before the storm and avoids
a plant shutdown. In contrast, 50 miles away in Louisville,
a Ford Motor Company plant shuts down, its supply of parts
exhausted. Workers are sent home at midday. The cost of
the shutdown was estimated to be more than $1 million.
Auburn Hills, Mich., USA, June 24, 1998: A Chrysler Corporation
(now DaimlerChrysler) board of directors meeting proceeds
and the workday continues as normal at Chrysler’s
corporate headquarters, even though tornado sirens are wailing
all across the county. Twenty miles to the south, tornadoes
and high winds cause serious damage. In the immediate vicinity
of Chrysler headquarters, no adverse weather occurs, other
than a light rain shower.
These stories have a common thread beyond the fact that
Toyota, Daimler Chrysler and their employees were spared
severe weather damage. These world-class organizations proactively
manage weather-related risk in support of their enterprise
resource management function. Each uses a unique weather
risk management system to provide a facility operating solution.
“Increasingly, weather information has multi-billion-dollar
implications to business,” according to The Wall Street
Journal. This is especially true in the field of facility
management. In the past, facility managers viewed a darkening
sky and turned to The Weather Channel, NOAA Weather Radio
or the Internet for information to help make decisions that
would mitigate the damage from adverse weather conditions
that might or might not be headed their way. This approach
often proves unsatisfactory as the intentionally time-delayed
radar data generally available on the Internet is inappropriate,
and can be misleading when making mission-critical real-time
decisions.
The Weather Channel and NOAA Weather Radio are fine sources
of information for mass-market consumers, but are not the
optimum sources for site-specific business facility needs.
To cite just two of the many reasons, consider that National
Weather Service warnings are issued for entire counties,
not for specific sites. It is common for tornadoes or flash
floods to affect only a small percentage of a given county,
which may be miles away from a particular business facility.
The National Weather Service also does not issue lightning
warnings. Lightning can be a major threat to personal safety
and power supplies to business facilities in general and
a special threat to companies dealing with explosives or
chemicals.
While we typically think of weather-related losses occurring
from severe weather that occurs without warning, businesses
often suffer major losses due to false weather alarms. A
recent example is 1999’s Hurricane Floyd. Hurricane
Floyd is the first $1 billion weather-related disaster in
U.S. history where the cost of mitigation exceeded the damage
caused by the storm itself, according to Roger Pielke Jr.
of the National Center for Atmospheric Research. The National
Weather Service, bound by its mission is to warn the public
at large, intentionally overwarns of hurricanes. This “overwarning”
may create significant adverse consequences to business
operations due to unnecessary shutdowns, supply chain interruptions
and delivery failures in regions that are under hurricane
warnings, but never actually experience dangerous weather.
In these situations, facility managers often feel “damned
if they do and damned if they don’t.” Knowing
their personal credibility as a manager is at stake, they
are forced to make critical weather-related decisions that
are largely outside their area of expertise.
Fortunately, the disciplines of risk management and meteorology
have now converged to give facility planners the tools needed
to proactively manage most weather-related risks. Weather
forecasts and storm warnings can now, for the first time,
be created for a specific site or entire business enterprise.
False weather warning alarms can be minimized and advance
warnings for truly dangerous situations can be maximized.
Blizzards and floods can be forecast along specific supply
routes allowing for re-routing or rescheduling just-in-time
inventory deliveries. Facility managers of leading edge
companies like Andersen Consulting, Boeing, General Motors,
Progressive Insurance, Vanderbilt University and Burlington
Northern Santa Fe save time, money and productivity by becoming
proactive and no longer simply accepting what Mother Nature
throws at them.
How does this approach work? And, how can you and your
facility benefit?
An excellent starting point to finding the solution appears
in the November/December, 1999 issue of FMJ, in an article
“The Crisis Probability Quotient” (pages 54
and 55). The article provides an inset and table that can
be used as starting point for this discussion. To the crisis
criteria identified there, I would add one additional criterion,
“Vulnerability to Weather.” In determining whether
to assign a value of zero to 10 to this criterion, assess
the answers to questions such as:
• What damage could a cloud-to-ground lightning strike
cause?
• Where would we shelter our people from a tornado?
• Are we vulnerable to flooding on-site?
• Can a distant blizzard (such as the Jan. 24, 2000,
blizzard from the Carolinas to the Northeast) or flood disrupt
our operations by interrupting the supply chain, even though
we do not experience adverse weather at our location?
In the last two years, major tornadoes have occurred in
Orlando and Salt Lake City, locations well outside of what
is traditionally considered the tornado belt. Las Vegas
suffered a major flash flood. In this era of just-in-time
inventories, computer-controlled robotics and fiber optic
communications, more businesses than ever rate their adverse
weather risk vulnerability in the 7 to10 range, indicating
operational weather risk management is an important enterprise
resource planning issue at any business facility.
Since 1981, WeatherData has provided operational risk-management
solutions for the management of adverse weather risk. We
encourage our clients to take a multi-department approach
in viewing potential facility and/or supply chain risk and
opportunity. To accomplish this, we review with facility
managers, executives, security officials, contingency planners,
operations and logistics managers all the ways in which
weather affects their facilities, supply chains and overall
business, either favorably or unfavorably. Included among
the questions we ask our clients are, “What is the
minimum lead time needed to mitigate the effects of a storm?”
and “How long does it take you to shelter your staff?”
Consultative solutions typically include a mix of specialized
weather forecasts and specially tailored storm warnings
for both the business facility locations and critical locations
along the supply chain. This information is integrated into
the client’s enterprise resource planning practices
so that effective and timely decisions are made as events
occur. These forecasts and storm warnings are made by WeatherData’s
professional meteorologists and managers to meet the specific
business requirements of our clients in real time. WeatherData’s
technology can identify specific facilities, highways, railroad
tracks, electric transmission lines and airports at risk
and those not in harm’s way.
Business solutions are customized to the requirements of
each client and address only specific weather elements affecting
that client. For example, Boeing’s production facility
in Kansas is vulnerable to hail while commercial airliners
must be parked outdoors, exposed to the elements. An advance
WeatherData hail warning enables Boeing managers to move
the most expensive aircraft into hangers in time to avoid
outer surface damage.
Burlington Northern Santa Fe (BNSF) has track through Boeing’s
facility, but is not as interested in hail warnings as hail
does not create losses or operational difficulties. Instead,
BNSF is concerned about the effect of adverse weather conditions
with the capability to create track washouts and subsequent
derailments. For BNSF, WeatherData meteorologists provide
flash flood warnings, while Boeing is on higher ground and
not affected by flooding.
These business neighbors require two different solutions
for their unique client needs. By selectively warning business
clients of operationally significant weather only, false
alarms, unnecessary communication and production downtime
is cut to an absolute minimum.
During times of crisis, a warning is sent to the appropriate
client department(s) at a given facility, which may be a
security department, facility department or other office
continuously staffed with 24 x 7 capability to implement
the crisis plan once the risk management warning is received.
The warning is conveyed by computer, pager, fax or any communication
channel requested by the client. While implementing the
crisis plan, clients are commonly in voice communication
with WeatherData meteorologists. For example, in the situation
involving Chrysler, WeatherData meteorologists spoke with
Chrysler’s security personnel several times while
the non-event was in progress, assuring them that the location
of the storm was well to the south of their facility and
therefore it was safe for their operations to continue.
During Hurricane Floyd, WeatherData meteorologists participated
in numerous teleconferences assessing the situation with
clients’ crisis management teams. We live in an era
of increased business vulnerability to weather conditions
combined with increased numbers of tornadoes, hurricanes
and other types of weather volatility. Given this environment
and the competitive edge precise weather warning solutions
provide, more businesses will make a profitable investment
in proactive operational weather risk management solutions.
FMJ
About the authors: Michael
R. Smith is a board-certified consulting meteorologist and
CEO of WeatherData Inc. of Wichita, Kan., USA. WeatherData
is the leading provider of weather risk management solutions,
and the Year 2000 recipient of the American Meteorological
Society’s Award for Outstanding Services to Meteorology
by a Corporation. Smith can be reached at 1-316-265-9127
or ceo@weatherdata.com.
Learn more about WeatherData’s weather risk management
solutions at www.weatherdata.com.
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