Hurricanes are some of the most devastating storms in the world; when they hit, they destroy people and property. To companies, a hurricane is not only a disaster that causes physical destruction but can also influence all sides of a company’s business, from its capabilities to work and its relations with customers in subsequent years. The National Oceanic and Atmospheric Administration (NOAA) stated that the cost of hurricanes since 1980 has been over a trillion US dollars; therefore, it is high time that businesses embark on serious disaster planning. The strategic solution for these unpredictable storms is Business Continuity Planning (BCP), a systematic approach that enables organizations to protect and recover from severe disruption. In this blog, you will learn about hurricanes’ most significant effects on companies and why business continuity management is crucial for reducing company losses and quick restoration time.
Understanding Business Impact
Physical Damage to Infrastructure
Hurricanes are capable of causing much damage to business infrastructure, such as buildings, machines, and stock. Strong winds, intenseprecipitation, and floods can reduce structures into rubble, requiring extensive repairs and replacement. Physical destruction results in the temporary, or in some cases, permanent, closure of many affected establishments. For example, in 2017, Hurricane Harvey resulted in billions of dollars in damage to businesses across Houston, causing prolonged closures and leaving companies struggling to rebuild. Expenses from such physical damage exclude simple repair costs and detrimentally impact future earnings potential.
Supply Chain Disruptions
Besides extensively damaging physical assets, hurricanes negatively impact supply systems and significantly challenge the availability of necessary goods and materials. These effects may include flooded roads, damaged ports, transportation, and slowing down product movement and the necessary resources. Some firms set their inventory management strategies to work on the just-in-time method, meaning that a minor disruption in the flow often results in several ramifications, such as delays, loss of sales, and unsatisfied customers. These disruptions underscore the importance of holding backups for each possible supply chain weakness and being ready for adjustments in case regular suppliers or routes are inaccessible.
Employee Safety and Availability
Any company that experiences a hurricane must consider numerous factors regarding its employees, including their safety and availability. First and foremost is verifying their safety and that their needs have been met before asking them to report to work. Storms disrupt operations as employees cannot report to work after evacuation, property damage, or sustaining injuries. These challenges might persist even after the initial danger has been averted, as some workers may have experienced damage to their personal properties, making it difficult for them to return to work. Such problems contribute to staff deficits, making it hard for businesses to regain usual operations to meet clientele preferences. In integrating continuity management, the safety of the employees must be embraced as the core of continuity management.
Critical Elements of Continuity Planning
Risk Assessment
Risk assessment is crucial for any organization that wants to implement its Business Continuity Plan. This requires the assessment of factors that could pose threats and the evaluating of the effects of these risks on the business. Risk assessment for hurricane-susceptible regions entails vulnerability to hurricanes, structures, access to the business, flood zone locations, generator/equipment locations, data/cloud storage access, access to cash/capital, fleet management and emergency resources for the business and its personnel. These factors help businesses make proper resource allocation and build a strategy covering various threats for each enterprise.
Business Impact Analysis (BIA)
The Business Impact Analysis (BIA) provides businesses with focused priorities for recovery after a disaster. This centers on determining areas critical to the business’s operations – things like IT, financial control, and customer relations that need to continue or be regained to reduce further losses. Customer relations has to be evaluated through a new lens, as they have been affected also and their needs may no longer align with your business. One benefit of impact analysis is understanding the effort required in each function, preparing as much as possible before the disaster, include staff resources in the preparation and diversified inventory to cover post disaster customer needs. For example, if you sell electronics, stock up on batteries at the beginning of the hurricane season so it will be available for your customer base after the hurricane when the power may be compromised. Another example is to have additional gasoline storage onsite if your fleet management business is involved in recovery effort. Finally, collecting and storing fresh rainwater for distribution to staff. Hence, companies can put their efforts where they are most needed to ensure continuity before, during and after a crisis.
Recovery Strategies
Recovery strategies are the backbone of continuity planning because they describe how the business will restore various phases of normality of operations after a hurricane. Such measures include providing mobile workplaces, developing partnerships with backup vendors, and integrating data replication systems. For instance, if the main working office is affected, the company may move to an alternate office or let employees work from home. Through such flexibility, companies can meet production and service demands during and after the disaster, reducing the long-term loss in operations and sales.
I would be remised if I did not emphasis that each business has a corporate responsibility to its staff and customers. Without saying, most communities come together in remarkable ways after hurricanes, sharing resources, providing in kind services and shared responsibilities. By expecting children in safe workplaces, lack of public transportation and families to use office shower, bathrooms and laundry facilities, businesses can preplan what those arrangements may look like. Businesses cannot expect their businesses to return to normal just because their individual facility and homes were not damaged. This is a season of empathy, patience and scamming awareness.
Remote Emergency Response Team | Vanguard X
Developing a Continuity Plan
Assembling a Cross-Functional Planning Team
Continuity planning is a whole company initiative, as all departments know its implementation necessities and any potential loopholes. To guarantee that all subsystems are noticed in the continuity plan, businesses should have continuity teams cut across organizational departments such as finance and operation, IT, and human resources. This approach opens up the way to develop a working plan that best suits the organization’s goals and other resources.
Documenting Procedures and Roles
When a team has been developed, document every procedure and determining who does what in the context of the continuity plan as a Standard Emergency Operating Procedure (SEOP). A clear plan contains directives on handling emergencies, how, who, and when to communicate, and how to proceed after an event. Designating roles and responsibilities means that each individual is aware of their expected role during a hurricane, limiting perplexity and improving response effectiveness. This clarity is vital to allow employees to proceed quickly in an emergency, knowing how to proceed without looking up critical information.
Training and Regular Testing
To constantly check the continuity plan, it is recommended that employees be trained and tests be made consistently. These meetings educate the staff on the plan and their place within the overall operation; they deter any long response times and create a feeling of preparedness in the employees. Readily available systems can be put under practice to identify the plan’s limitations and make changes to the feedback gained from tests like drills and simulations. This ensures that the plan is up to date, and as the business expands or as risks develop, the plan with its adjustments is ready.
Because we are in a tsunami zone, we have a tsunami drill. Teams members have 5 minutes to collect the safety bag (first aid, walkie talkies, emergency supplies), the cash from the register (in anticipation of no electronic money) and traverse a steep step street to make it to the anticipated elevation. No shutting down or locking up. Its not easy but it brings a different type of reality to the team.
In conclusion, hurricanes are thus a significant threat to business continuity risk, although the latter can be managed with proper planning and preparation. Having a sound and sustainable BCP is more than just compliance; it is an organizational necessity for survival amidst disasters. Disaster preparedness involves more than protecting property; it is preserving an enterprise’s future, people, and reputation. All organizational managers today should find the time to create a continuity plan for business or review their existing continuity plan to be ready to address tomorrow’s issues.
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