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Plan For Disaster Before It Strikes: Vending Industry Experts Share Experiences

Posted On: 10/7/2016

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TAGS: vending, office coffee service, disaster planning, disaster readiness, Tara Burnaman, DS Service of America, Frank Durkin, Sugar Foods Corp., Chris Todaro, J.M. Smucker, Mike Tompkins, Tompkins & Assoc.

No vending or office coffee service company is invincible to the potential impact of a hurricane, flood, fire, power outage or other disaster. Yet many fail to plan for how they will maintain the continuity of their businesses in the aftermath of a natural or manmade disaster. Three industry veterans whose companies have been hit by major disasters urged operators and suppliers alike to create contingency plans now to achieve the best result in the event of the unexpected.

Speaking at a disaster-planning seminar during the National Automatic Merchandising Association's 2015 Coffee Tea & Water conference in Washington, the panelists shared what they learned from their experiences. Presenting were Tara Burnaman, director of procurement for DS Service of America Inc.; Frank Durkin, vice-president and general manager for Sugar Foods Corp.; and Chris Todaro, director of supplier quality management system for J.M. Smucker Co. Mike Tompkins of Tompkins & Assoc. moderated the panel.

vending, diaster planning for vending companies, ara Burnaman, Frank Durkin, Chris Todaro, Mike Tompkins
PHOTOS: From Left to right: Tara Burnaman, Frank Durkin, Chris Todaro and Mike Tompkins.

Strategies for risk assessment, organizing and documenting a written plan, and developing test criteria and procedures are key components for any disaster recovery (DR) blueprint.

Burnaman worked at Standard Coffee Co. before it was acquired by Atlanta-based DS Service of America in 2012. Standard, headquartered in New Orleans, learned more than it ever could have anticipated after Hurricane Katrina devastated the city in August 2005. With damage estimated at $108 billion, Katrina was the costliest natural disaster, as well as one of the five deadliest hurricanes, in U.S. history.

"Failing to plan is planning to fail," Burnaman cautioned. "A fundamental disaster plan is the same for any business. A disaster can be any unplanned emergency that has a significant impact on your company's ability to carry out its business."

A fire, labor dispute, product tampering or hurricane are a few examples of unexpected events that can bring a business to a grinding halt. A disaster plan must focus not only on getting systems back on line, but also on the wellbeing of the company's employees.

"Lay out what you expect of employees and what they can expect of you," Burnaman advised. "Do they know the procedures during and after a disaster? If they're not able to come into the office, what do they do the next day? Everyone needs to expect the unexpected."

When Hurricane Katrina made landfall, Standard Coffee did have a disaster-recovery plan in place, and immediately activated it. But the plan did not fully address disrupted telephone communication caused by flooding, which nearly destroyed all local switching facilities. As a result, the greater New Orleans telephone area code (504) was disabled for several weeks, making it impossible for Standard to reach a majority of its employees.

Fortunately, the OCS company had a toll-free number in another state. This had not been part of Standard's disaster plan, but the 800 number allowed those who had phone service in other area codes to communicate. After Katrina, dispersed toll-free numbers became integral to the company's revised DR plan.

"There are many methods to communicate, including social media and email, but if the whole system is down, the business may be out of luck," said Burnaman.

First and foremost, if lines of communication go down in the event of a natural disaster, employees must know when they're required to return to work. The company should designate first responders and tell them when they should return. Second responders must be aware of when they should return, and how they will know if they need to replace first responders who are unable to return.

In the aftermath of Hurricane Katrina, Standard backed up its servers and moved to a recovery site, to which employees now know they can report in the event of a disaster.

It's also essential for operators to know that their suppliers have disaster plans of their own. "If you have private-label coffee and outsource the roasting, what's the plan for continuity in quality and packaging?" Burnaman observed. "Maybe you need to have another roaster as a backup, if you're not comfortable with your roaster's plan. Make sure that you place purchase orders, and pay your suppliers and employees, in the event of a disaster."

Operators are advised to lay out all protocols for disaster recovery in a written plan and share it with employees. Once a DR plan is in place, it's critical to test it, practice it several times a year and ensure that it is constantly updated, Burnaman said.

"This requires focus because hopefully years will go by that you don't ever need to execute a plan, but you still need to be prepared as if one will happen," Burnaman said. "In the event of a disaster, have an evaluation of your procedures and follow-up plan. Look for areas of weakness and adapt the plan accordingly. Most of all, determine how you'll know your employees are okay, and be sure that they know when to come back and how you will continue to serve your customers."

Sugar Foods' Frank Durkin also knows the importance of a disaster recovery plan. Durkin had to put one into action for thousands of employees, spread across the food manufacturer's offices and five plants. "The plan has to be simple; there's no way you can plan for every disaster, and you hope you never have to use it," he said.

When Hurricane Hugo hit Sugar Foods' Savannah, GA, headquarters in 1989, the company had a DR plan in place. However, its recovery site was struck by tornadoes, so its hurricane preparedness plan did not provide the expected solution. This scenario exemplifies the value of contingency plans for as many conceivable scenarios as possible.

"You have to be able to pay employees," Durkin emphasized. "Newscasters may be there, and word will spread on social media, so you should know who will communicate to the public as a company spokesperson. Involve all employees; they're key to any plan. Training and practice can get redundant, so rotate people so all are involved over the years."

Durkin's plan emphasizes alarms and headcounts. That includes making sure employees can hear audio alarms signaling evacuation; and a DR plan must formerly assign responsibility for checking the building and accounting for all employees. In the event phones are down for a period of time, as Burnaman noted, there should be a communication procedure in place. Durkin suggested creating a "phone tree" and designating a point person to oversee it. Sugar Foods has also made it a policy to increase the petty cash on hand in its plants when a major event is in the forecast that could impact operations.

"It's better to be prepared than to wish you had been," Durkin warned. "Afterward, sit down and do Monday morning quarterbacking. What went wrong that you could fix? Learn from other people and listen. We have plans in place for everything but locusts: earthquakes, hurricanes, flood and fires. Many are more likely in certain areas."

The economic effects arising from the Sept. 11 attacks were an initial shock, causing global stock markets to drop sharply. The 9/11 attacks themselves resulted in approximately $40 billion in insurance losses, making the event one of the largest insured ever. J.M. Smucker's Chris Todaro pointed out that prior to the attacks in 2001, most businesses would never have considered what to do during a terrorist occurrence.

"We understand and learn from every event," he said. Just days before the 2015 Coffee Tea and Water show in November, a high-tech U.S. military aerostat designed to detect a missile attack came loose and wreaked havoc as it floated from Maryland into Pennsylvania while dragging more than a mile of cable and knocking out power to thousands. Smucker's power was lost during the incident.

"Loss of power can happen during many events. In your planning, you need to be ready to protect your facilities and keep your employees safe," Todaro said.

Smucker is certified by the Disaster Recovery Institute International for its preparedness of having the critical pieces that work together in place before, during and after the interruption of normal operations. Founded in 1988, DRI is a nonprofit that helps business organizations around the world prepare for and recover from disasters by providing education and accreditation.

When hurricane Katrina hit, DS's Burnaman stressed, Standard Coffee had a plan that was perfectly executed, but it was flawed. "You can't plan for an event like [Katrina]. But now the plan is built for repetition of the worst-case scenario," she said. "What if phones don't work? Where do your people live in the community? How will you reach them? The best time to plan is in non-crisis mode. Think of your people, inform them. Practice becomes second nature when you make it part of the routine."

Todaro emphasized the importance of maintaining paper backup of critical computer files in anticipation of a power outage taking out computer servers. "And have a booklet with plans and phone numbers. Don't underestimate the urgency with which you may need," he said.

The moderator added that a national attack on the Internet is not out of the question and the panelists agreed, underscoring the need to keep hardcopies of important information.

Burnaman said she keeps a box of customer-contact information under her desk, along with purchase orders, in the event that disaster necessitates reverting to a manual process. "Keep all your receipts and paperwork," she advised. "It took me 35 days to find everyone after Katrina. That was too long. Now we have a system that, within 48 to 72 hours, will let us know whether we're all safe and sound."

Todaro added, "Keep asking 'what if?' A lot of experience comes from what people don't think about like that Army aerostat. Don't get focused on the event. Focus on common themes like being without power. We've looked at influenza outbreaks and other 'what ifs' and created plans."

An operator in the audience wanted to know what happens if a vending or OCS company is part of a hospital's disaster plan to provide water, but is then unable to deliver it. The panel urged operators to prepare for interruptions that can impact their customers, especially for critical water supplies.

"It's important to have a plan for that scenario. It's amazing how people rallied across the supply chain, offered their buildings and trucks and many other resources after Katrina," Burnaman said. "June 1 is the beginning of hurricane season; be ready. Run through your plan; know the evacuation points. Where will your people go? What can stand in your way of serving your customers and what can you do to work around it?"

Sugar Foods' Durkin said the company checks its recovery systems monthly and holds random fire drills. Smucker's Todaro said his company runs through a checklist at the beginning of hurricane season; the drill includes verifying that all employee contact information is up to date.

The CTW speakers recommended several resources that can help operators plan for disaster recovery, including the U.S. government's ready.gov site and local departments of homeland security. Consultants like Disaster Recovery International and private firms such as Brammeier Computer Services Inc., which specializes in creating customized computer hard drive backups, are available.

They also recommended that operators consider attending business continuity and supply chain management courses designed to walk business owners through the steps of disaster planning.

disaster planning, Hurricane Katrina
WHAT IF? A U.S. Coast Guardsman searches for survivors in New Orleans in the Katrina aftermath.