Suppliers respond to Katrina
How four suppliers helped put their customers back in business after August disaster.
How suppliers helped Katrina recovery
Disasters test people and organizations in different ways. The challenge faced by many suppliers with Hurricane Katrina was to help get their customers back in business while working in an uncommon element of human suffering. These companies, and their many employees, responded with an effort that went above and beyond “business as usual.”
Here’s a look at how four organizations dealt with the business crises created by Hurricane Katrina last August.
Honeywell has worked to get the DuPont and ConocoPhillips Alliance facilities back on line, a project not yet fully complete.
One of the things Honeywell was working on with ConocoPhillips was a modernization plan for the New Orleans refinery. The second phase of the two-phase project was to begin in two years. The hurricane accelerated that process.
“Katrina pushed Phase 2 closer to Phase 1,” said Peter Jofriet, Honeywell's Vertical Marketing Director, Refining. “Obviously, water and electricity don’t mix. Water is a unique problem.
“What’s important in this case is that when you’re working with an open system, there is a lot more recovery services at the controller level. With an open system, recovery is made somewhat easier. You’re not talking about proprietary hardware. They’re computers. The ability to do swapping out is easier.
“The other unique thing is the way we responded. We were able to rally our service organizations. Honeywell is a big company with a lot of resources, and we were able to respond to the needs of people and get them up and running again. Part of that response, that flexibility, points to a trend of customer aligning more closely with their vendors. One of the monumental things that has been done is that because we’re aligned with them, we’re bypassing our normal systems and fast-tracking everything. We recognized the urgency of the situation and had the resources to draw on.”
Jofriet said the staffs in Honeywell offices in Baton Rouge, Beaumont, TX and Houston and the manufacturing facility in Phoenix were keys to the recovery effort for Honeywell customers.
Rockwell Automation -- Randy Lowry, Hurricane Recovery Program Manager
“Rockwell Automation’s first response began before the storm, with our sales and distribution channel personnel paying visits to customers that were in the storm's path, and advising them of the services that we would have available for them if necessary, and to some extent, taking inventory of the automation and control product that had potential to be damaged or destroyed.
“When the storm hit, and the extent of the damage to some of our key customers was determined, RA established a Recovery Project Team organization that had the primary mission of focusing the resources of the company on getting our customers back on line as quickly as possible.
RA took a two-pronged approach to mobilizing for our customers. The first element was to mobilize the service personnel that would be necessary, and define for our customers the services that we were able to provide. These services were focused on helping our customers assess the extent of the damage to their facility, and on helping them get back up as quickly as possible. The second element was to organize processes within our order entry and manufacturing facilities to identify and expedite product orders related to the Hurricane Recovery.
Within several days of the storm, we had these things in place, and continued to refine the processes as we learned more about the needs of our customers in the affected area. We immediately procured equipment to house our service personnel that we knew would be in the area, and began lining up service personnel, and assuring that our people were appropriately prepared from a health and safety standpoint.
In our manufacturing facilities, engineering data on previous customer orders was pulled out of storage, and personnel requirements for additional shift-work were planned for and implemented.
“The entire supply chain of RA product was touched by the storm, with product coming in from Canada, Asia, Latin America and Europe being expedited and tracked through our Hurricane Recovery processes to assure as rapid delivery to the customer as possible. In many cases, normal routing of product and sub-assemblies through the supply chain was altered to get it to our customers sooner.
“In some cases, work-arounds for parts shortages were accommodated through extraordinary means, including shipping what the customer needed to get recovery work started, and providing remaining components and installation personnel at a later date. In another case, an entire new product line was expedited through the design, manufacturing and test process to accommodate a customer's request for equipment that met their standards.
“Having personally visited several of RA's manufacturing facilities during this effort, and having talked to the people who are working extended hours to get the product out the door, I can say that the motivation to help get the hurricane affected facilities back up and running is fueled by the desire of RA's people to help the individuals in the affected area get back to work, and begin to get their lives back to normal. This has been very much a people-to-people effort, at least as much as it has a company-to-company effort.
“Obviously, the best way to prepare for a disaster is to take steps to prevent it. In the case of some of our customers, these steps were taken, in the form of installed levees, pumps, etc., but there will always be disastrous situations that can't be predicted, or for which it not practical to install preventive measures. For these situations, the absolute best preparedness tactic is to practice good Configuration Management in the manufacturing facility, and assure that there is good, up-to-date engineering data on all of the manufacturing equipment in the facility. Additionally, this data should be stored off-site.
“In many cases, Rockwell Automation was building replacement equipment for our customers before the control room was even out of the water. We were able to do this because we had the engineering data on the equipment that had been provided, and could begin building the replacement equipment to the same specifications without having to even see it.
Swagelok -- Arthur F.
Anton: “Being in Cleveland, it took us a while to understand how truly horrible the effects of the hurricane were. Our first concern was for the well-being of our field associates, our distributors and their families. I quickly established communication with Craig and Johnny Uhl, our distributor in Alabama, via e-mail because it was impossible to get a phone connection. We just kept getting busy signals. Thankfully, all were safe. Some suffered serious damage to homes and personal property. After that, our executive committee %%MDASSML%% with heads of manufacturing, operations, human resources, etc. %%MDASSML%% met to determine how best to lend support to the affected distributors, including financial, product and customer support.”
Jennings: “Following Katrina, our greatest concern was for the safety of our associates. We immediately began calling to see that everyone was alive and well and, hopefully, with minimal property damage. Because of sporadic telephone service and an incomplete list of all associates’ cell phone numbers, confirming that all associates and their families were accounted for took several days.
“At the same time, we began trying to communicate with our customers in hurricane-affected areas. We posted a hurricane communication to our Web site that included home and cell phone numbers for associates with access to inventory in three cities where we were still operational. We also sent out several thousand e-mails and faxes to customers to let them know how to get in touch with us at our Baton Rouge, Lafayette and Lake Charles offices.”
Anton: “From a corporate standpoint, we were able to pitch in and help at our Cleveland area manufacturing sites. Much of the Swagelok inventory housed in hurricane-affected areas was shipped back to Cleveland, cleaned, inspected and repackaged for our distributors. Items that could not be salvaged were scrapped. Instead of waiting for the completion of this process, Swagelok sent replacement shipments immediately to distributors in need of replenishment. We also sent a letter to customers in the affected area, that we would prioritize any shipments and manufacturing orders that were needed to rebuild physical losses.”
Jennings: “Just to give some perspective of our situation, our New Orleans office suffered major roof damage and took on rain water. All furniture, fixtures, telephones and computers were ruined. In addition, approximately 45 percent of our customer base was impacted in some way by Katrina. When Hurricane Rita descended on western Louisiana, this storm caused many of the same problems that we were still trying to overcome from Katrina. We lost power at our Lake Charles facility for three weeks.”
“Some customers were less affected than we were and were quickly returning to work. To service these customers, we needed to set up a temporary facility and we needed to do this quickly. We tried to locate temporary facilities to lease in New Orleans. None were available. As an alternative, we leased two large General Electric Modular Space trailers to be located on the land adjacent to our damaged office building. In the interim, we hired a local delivery service to make daily deliveries to our customers on the west bank of New Orleans. This service would help us meet our customer needs for five weeks until our temporary facility was up and running.
“We have provided container storage units and have set up consignment inventory at Swagelok customer sites for their use while they recover and rebuild their hurricane-damaged facilities. This was not an easy task since FEMA had commandeered all container storage units. One customer asked that we have a consignment inventory set up on their site with one day’s notice. A container was located for them in Picayune, Mississippi. We had it delivered and the consignment was in place in less than 24 hours.
Anton: “Swagelok Company and the Swagelok Foundation made an immediate combined donation of $25,000 to help the affected associates of Capital Valve & Fitting and Alabama Fluid System Technologies. In addition, another $25,000 was contributed to support the relief efforts of the American Red Cross.
Anton: “Above and beyond our corporate contributions, many Swagelok associates also expressed the desire to help. In response to this, the company offered to match the total associate contributions. In the end, Swagelok and its associates raised a total of $168,000 to help the hurricane victims begin to rebuild their lives.”
Jennings: “In addition to the monetary help Swagelok offered as a company, Capital Valve & Fitting was able to locate and furnish an apartment in Lafayette, Louisiana. This would allow us to send associates from New Orleans or Lake Charles to assist with the work overload at the Lafayette office, where orders were being diverted in the aftermath of Katrina and then Hurricane Rita. Hotel rooms were unavailable at that time.
“With only two offices operating, October broke all sales records for our company. The Lafayette office did more business in one month than any other two offices combined had done previously. “
Anton: “Swagelok has a fairly extensive risk management program that includes all elements of our supply chain. After Katrina, we were able to review our plans and make very little changes. Also, by following lean manufacturing principles, we were able to respond to customer demand quickly.”
Jennings: “One very simple lesson that we learned was to have a complete list of all of our associates’ telephone numbers updated at all times. Communication, in the aftermath of disaster, is what fundamentally kept us all calm and moving forward.
“We quickly discovered that our most reliable means of communication ended up being e-mail. Our associates were able to access their corporate e-mail through a Web-based application from any computer. This is how we sent updates to everyone who was now living with family and friends, in some cases, two states away. We were able to tell them that they would still receive their paychecks by direct deposit. This was extremely important information that proved helpful due to the fact that our New Orleans employees would not return to an operating facility for two months.”
Schneider Electric -- Karl Newquist, Hurricane Recovery Project Leader
“Schneider Electric does not have any manufacturing sites in the affected area. However, our manufacturing operations were affected from the post-hurricane product demand. Within two weeks after Katrina hit, order rates soared for our electrical equipment.
“Two operational areas required immediate review:
How to prioritize the area's orders to attain the best lead times
How to insure sufficient component stock existed in the area.
“In reality though, our first response was to check the welfare of our area sales and service personnel and contact our distributors to understand their personnel situation.
“New Orleans and the Gulf Coast areas will be recovering for years. And many people, even those who have homes to live in, are still in disrepair. Our area sales people faced this dilemma from the beginning. They were displaced, their offices were greatly impacted and their customers and distributors needed help. They had no power, phones or computers, and there was no blueprint on what to do first.
“As we all know, sales is all about relationships. So our sales people weren't just helping their customers, in their eyes they were helping their friends. So their jobs and their lives became one in the same for weeks.
“Many of our operations personnel in other parts of the country were asked to work overtime and odd hours so products could be manufactured and shipped at whatever time and in whatever method was required to meet the needs. We didn't have to require our people to do this. The mention of hurricane relief was the only motivation necessary for these people to do what needed to be done.
“Two mainstays of manufacturing today are flexible output volumes and redundant capabilities. Natural disasters, work stoppages, supply interruptions and material shortages can all cause the same or similar responsive chain of events.
“Today's cost control demands force companies to be more creative than simply having safety stock. So operationally speaking, plans must be in place before the events occur and personnel prepared to implement them. Having said this, it is still a fact that no one was ultimately prepared for two successive Category 4 hurricanes and their aftermath. Our lesson was not so much manufacturing in nature but in the logistics of getting the product to the affected areas and insuring the safety and welfare of the people in our loop.
“It is now imperative to have a formal process of locating personnel first within your own ranks and then moving to the next circle of your distributor partners and customers.
We must also focus on a plan that insures we can get material to site in alternative ways whether it be available stock or shipping contingencies.
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