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.