Asset management: How to create a master disaster plan
Where will you go? How will you assess asset health? Who will provide updates?
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Whether or not you are a firm believer in the potentially disastrous effects of climate change, El Nino, or solar flares, there are many indisputable disasters that should concern you regarding company assets. We rely so heavily on our assets and systems as they become smarter, more connected, and more expensive, yet many asset managers still do not have a comprehensive business continuity plan that includes a properly tested disaster recovery plan. Planning for a worst-case scenario is critical as the probability and potential impact of a disaster continues to grow.
A suitable plan allows for a smooth continuation of business operations according to predefined procedures should a disaster occur, thereby helping maintain internal consistency. Emergency response plans should take into consideration all possible causes of a major disruption to normal operations, including:
- Natural disasters that a facility’s region is at risk of experiencing, such as ice storms, earthquakes, or hurricanes
- Accidents, such as power failures, fire, gas leaks, chemical spills, collisions, or utility disruptions
- Deliberate attacks, such an act of war, a workplace shooting, or a cyberattack.
Beyond threatening worker safety, such disasters can cause catastrophic physical damage to equipment or facilities, loss or corruption of data, and disruption of processes. Any company that has experienced a disaster firsthand will attest to the value of developing, testing, and maintaining a business recovery plan.
From the start of the disaster until full physical recovery from it, the maintenance department plays an especially critical role in ensuring the consistency of operations. This is accomplished by maintaining the asset base at an acceptable level of performance, regardless of the assets’ location.
The following are key steps in establishing a proper business recovery plan to minimize business interruption risk.
1. Establish an emergency response structure
Once a disaster declaration is made, the business recovery organizational team takes over responsibility for management of the recovery process, from communication that a disaster has occurred to communication that everything is back to normal. The recovery organization consists of a business recovery management team that provides overall direction and support for the executive team and a number of business recovery core teams that assist the business units throughout the recovery process.
The business recovery core teams take responsibility for various aspects of managing the recovery. For example, the IT core team would be responsible for ensuring the continuance of all critical systems and developing a strategy for returning all information systems to normal as quickly as possible. The operations core team would ensure that critical operations are continued in alternate sites where applicable. Team members would report regularly on issues and their operational impact. Maintenance plays a key role on this team to ensure that equipment availability is maximized.
Other core teams will depend on your industry but usually include:
- The human resources core team, to ensure payroll continuity, proper employee communication, the availability of trauma counseling, and maintenance of contact with families
- The facilities core team, to assess property damage, develop the strategy for alternate sites where appropriate, and ensure building security
- The finance core team, to monitor loss of income, manage financial reporting issues, and maintain expenditure controls
- The communications core team, to manage internal and external communications and media inquiries
- The emergency response core team, which will prepare and execute the emergency response to ensure the safety of personnel.
All core team leaders are on the business recovery management team. During a crisis, this team must devote 100% of its time to emergency response and recovery, including supporting the executive in making key decisions.
2. Decide response procedures
The first job of the business recovery management team is to ensure that procedures are established for use in an emergency situation. Personnel safety is the highest priority, followed by protection of assets and protection, maintenance, or re-establishment of operational processes. Human resource succession plans, alternate site plans, and alternative strategies must be drafted for use in the event of a serious loss. Plans must be carefully communicated to employees, and training must be provided.
Some companies establish an employee hotline or website for emergencies to provide updates and direction. Another good idea is to establish emergency assembly areas to facilitate smooth evacuation of a facility and allow for easy communications. In most jurisdictions, this is already part of mandated fire safety procedures.
3. Conduct criticality analyses
The maintenance and operations departments must help the recovery team determine the critical assets and facilities. In many cases, these can be logged using your CMMS. Emergency response procedures must be drafted and alternate sites established to maintain at least the critical processes.
In some cases, alternate sites are other plants or buildings within the organization or sister organizations. Some industries have arrangements among competitors to help each other in times of disaster. Still others have made arrangements with a third-party landlord in another location to take over less critical space. Obviously, arrangements should be made well in advance to avoid everyone chasing limited alternatives during a crisis.
Alternate sites should be pre-equipped with adequate telecommunications and connectivity, as well as reliable and sufficient power and other utilities to ensure continuance of operations.
Critical data should be backed up and stored off-site on a regular basis such that electronic or paper records can be readily recovered during an emergency. Some companies prefer to have “lifeblood” or critical systems running in two locations, either mirroring each other or with each running at no more than 50% capacity.
