Flood-hit Factories Should Act Now

Friday 11th November 2011 | Bangkok Post | Link

Inundated factories should already have a recovery plan in place instead of waiting for the floodwater to subside, says Andrew Durieux, a specialist in crisis management and business continuity.

Most of the factories in the flooded industrial estates, for instance, have passed the crisis stage and must now choose a contingency plan or a recovery plan or both.

"A lot of companies are waiting to do a damage assessment before conducting their recovery plan, which means they have to wait for the water to recede. I think they can get started now and could potentially win new customers," said Mr Durieux.

A recent meeting between Deputy Prime Minister Kittiratt Na-Ranong and executives of the affected estates determined that most factories in the seven inundated industrial estates should be able to reopen within 45 days of the floodwaters subsiding.

However, Mr Durieux believes that to be overly optimistic, as much utility work will need to be done such as clearing drainage systems and inspecting walls and warehouse structures,

"I think [45 days] is way too positive thinking. I don't think it's going to happen that easily," he said, adding that with 14,000 factories affected all at once, insurance claims will be slow, as each situation will take time to assess.

Moreover, given the number of parks hit, the problem lies in getting resources for review and repair. Therefore, if companies wait to get started, they could lose potential new contracts, said Mr Durieux.

"We had a hail storm [about 12 years ago] in Sydney, where three big transport companies got hit. My company was operational within 14 hours, while the others took one week, so a large soft-drink manufacturer approached us after the storm and awarded us a contract to deliver for the whole of Australia as a result of recovering quickly," he said.

However, a company may also decide not to come up with a recovery plan if the contingency site turns out to be better than the old one.

Mr Durieux advised companies to start as early as possible by booking cleaning teams, estimating and ordering repairs and replacements, planning data and systems recovery and using contractors where possible.

Factories and offices that are now inundated and looking at a contingency plan could consider a temporary operating site such as outsourcing some production or services, using partner locations, vacant office buildings or hotels or even moving production to another country.

However, Mr Durieux warned that sometimes the cost of setting up an alternative company is not covered by insurance, as such a move is considered to be purely for money-making purposes.

Therefore, businesses should check their insurance policies to see exactly what can be claimed and what is required of the company.

Mr Durieux, who is also a former president of the Australian-Thai Chamber of Commerce, made his comments at a training session on flood recovery and response to business owners and managers hosted by Coverage Ltd, of which he is director.

The seven-year-old company provides business continuity planning services and crisis management for all sizes and types of companies and covering all types of pandemics, terrorism, protests and natural disasters.

Mr Durieux said that in times of crisis, a chief executive should appoint someone else for crisis management.

"The problem is similar to that of the prime minister and Bangkok governor when in fact the responsibility lies with the Flood Relief Operations Command. The prime minister should be running the country, because two-thirds of Thailand is still operating like normal," he said.

One of the main problems is cultural, what Mr Durieux calls the phi-nong (brothers and sisters) issue. That means businesses must be aware of who is in charge of whom and whether a woman can tell a man or an older person what to do.

"While operating in Thailand, each company must work within a Thai context. You won't successfully force [staff] to work, especially under the phi-nong concept. If their parents tell them to come home and look after them, there's nothing you can do," he said.

Especially with global warming, businesses should have a business continuity plan ready at all times, said Mr Durieux.

"And just because we have a flood now, it doesn't mean we can't have an earthquake tomorrow. Still other things can happen anytime," he added.