“Whoa – Tornado just hit my DC!”
“Now what do I do???”
Gerry Greenleaf
Vice President – Distribution & Transportation
&
Lou DeLorenzo
Regional Director of Distribution
TPA Supply Chain Conference
January 23, 2012
Setting the Stage
Play Dunn Video
Recovery
• Evaluate the Situation:
– Associate Safety
– Secure Facility
• Assess the Damage
– Create Assessment teams
•
•
•
•
Associate/HR
Facility
Product
Operations
Restoration - Phase 1
• Creation of a Steering Committee for
Oversight/Coordination
– Represent Key Areas:
•
•
•
•
Operations
Retail
Loss Prevention
Engineering
• Creation of Insurance Processing team
Restoration - Phase 1
Development of Inventory Plans
– Impacted Inventory @ DC
• Inventory Review and Recovery
• Inventory Disposition – Reclaim/Disposal/Usable
• Inventory Accounting:
– Insurance
– USDA/FDA
– State, County, Town
– Create Inventory Rebuild Team
Restoration - Phase 1
Retail Service Plans:
– Cascade impacted stores (270) to adjacent DC’s
– Reallocation of Assets
• People
• Tractors/Trailers
– Process for emergency orders to retail
Restoration - Phase 1
What Happened:
– Within 24 hours, all impacted stores were being
serviced
– All emergency orders for impacted stores
processed & delivered
– All incoming PO’s diverted to supporting DCs
• Service Levels declined slightly (app. 3-4% for first
month after event)
Restoration - Phase 1
What Happened:
– Inventory Build to replace loss product started
– Usable Inventory (Grocery) at impacted DC
redeployed to supporting DCs starting Day 3
– Temporary Facility security in place
– Disposition of Non-usable product
– Insurance Information (Inventory) verified
Restoration - Phase 1
What Happened:
– Community/Governmental contacts established
and integrate into plans
– Impacted Associates communication process
and support resources activated:
• Over 150 associates deployed to other sites within
Week 1
• Payroll and benefits continuation for impacted
associates
Restoration - Phase 2
Getting Impacted DC back on-line
– Creating action plans based on assessment
teams reviews:
• Associate/HR
Sustainable communications process
Coordination and planning to manage redeployed associates
at supporting DCs to cover additional workload
• Product
Tight inventory and capacity coordination for supporting DCs
Restoration - Phase 2
Getting Impacted DC back on-line
– Creating action plans based on assessment
teams reviews:
• Operations
Supporting on-site clean-up and facility restoration
Preparing for operations restoration (Grocery)
• Facility
Develop and Implement Grocery Facility Re-build
Develop and Implement Office/Infrastructure Re-Build
Develop and Implement Fresh Facility Re-Build
Restoration - Phase 2
What Happened
– Grocery Operations – Created facility
access/operations for 75% of building – resumed
shipping operations by Week 4
– Created new design for infrastructure
• Enhance entrance and security
• Enhance associate spaces (locker room, break room,
fitness/wellness facility, green spaces)
• Enhanced offices
Restoration - Phase 2
What Happened
– Fresh Operations:
• Extensive rebuild project –required 9 months
– New refrigeration system
– New roof
– New rack and layouts (designed for current needs)
• Integrated a 57,000 sq. ft. fresh expansion into rebuild plans
• Successfully sustain Fresh distribution from
supporting DC’s for 9 months
Keys to Success
• Have a plan, continually review and update
• Create steering committee with clear
decision making authority
• Leverage a project management mentality
• Break down work into managable
elements
• Effort requires multiple work streams
and resources
Keys to Success
• Create key action teams with clear focus
• Focus on recovery, restoration, people
• Involve the entire company – you are not
alone
Communicate, Communicate, Communicate!!
A New Beginning
Business Continuity Planning
Business Continuity
•
Objective
– Protect customers from the impact of a
supply chain disruption
•
Process
– Define a repeatable plan of action to
speed communication and decision
making in the event of a supply chain
disruption
Scenarios
• Smucker Operation
– Smucker is responsible for development
and implementation of the disaster
recovery plan
• Outsourced Operation
– Third party plays a major part in developing
and implementing the site level disaster
recovery plan
Risk Analysis
Likelihood Of Event
Descriptor
Meaning
Highly likely
A threat whose occurrence is probable in
the next 1 year
A threat whose occurrence is probable in
the next 10 years
A threat whose occurrence is probable in
the next 100 years
Not applicable – No history or possibility
of threat. Mark N/A on the Risk Analysis
Likely
Unlikely
Not Applicable
Risk Analysis
Business Impact
Descriptor
Meaning
Catastrophic
Complete disaster with potential to interrupt all
critical work processes (Plant Operations,
Payments, Payroll, Customer Service, Close the
Books, etc.) for weeks longer than Business Impact
Limit
Event that could cause an interruption to all/some
critical work processes for days beyond the
Business Impact Limit
Event that will not threaten the Business Impact
Limit.
Major
Minor
Risk Analysis
Categories
Threats
Likelihood of Business Risk
Occurrence
Impact
Comments
Site
Snow/Ice Likely
Storms
Local Key Suppliers
Natural
Unlikely
Gas
External Suppliers
Corrugate Unlikely
Minor
Low
Equip. available
to manage
Major
Low
No disruption in
site history
Minor
Low
Alternate supplier
and site qualified
Events
• Recent Smucker Supply Chain Disruptions
– 2005 – New Orleans, LA – Hurricane Katrina
– 2008 – Memphis, TN – Tornado
– 2009 – Cincinnati, OH – Hurricane Ike
– 2009 – University Park, IL – Tornado
New Orleans
Katrina Impact on
Coffee Production and Distribution
NOLA Hurricane Response Plan
• Tied to 5 day cone of probability, stand down if out of
cone for 24 hours
• T-72, 48, 24, 12, 0 Checklists (from Phase I
Evacuation)
• Ride Out Team for Category 3 and below
• On-site bunkers with supplies and tools for Ride Out
Team
• Close relationships with local and federal authorities
• Pre-arranged recovery teams
• Ongoing site hardening and post analysis
improvements
Katrina
• Overview
– Gentilly operating within 3 weeks:
• Location advantages – near NASA
• Flood water did not enter the building
• Able to add on-site housing, potable water and gain site
access quickly through good planning and aggressive action
– Lacombe had limited disruption
– Silocaf sustained limited damage to building and
inventory
– Chef suffered minor flood damage
Gentilly After the Storm
Interior Water Damage due to Roof Damage
Gentilly After the Storm
Gentilly Village - 125 Trailers – sleeps 500+
Lacombe After the Storm
Lacombe becomes operational HQ immediately following storm
Memphis Mixing Center
Memphis Tornado - 2008
• February 5th - 6 p.m. Tornado strikes Memphis Mixing
Center
• February 5th - 11 p.m. Emergency Response Team
call to align information and next steps
• February 6th - 6 a.m. Emergency Response Team
meeting to identify core teams and affirm go forward
plan for Communication, Order Management, Quality,
Risk Management, etc.
• February 6th – All orders moved from Memphis
Mixing Center to ship from Cincinnati mixing center
Memphis Tornado - 2008
• February 6th-20th
– Create new short term customer shipping territory from
remaining mixing centers.
– Business preparation to accommodate new location
• February 25th – Go live with the short term Network
• April 1st – Lease signed on replacement building
• April 1st thru May 14th – Building preparation
• May 14th – First inbound receipt in new facility
• June 16th – First outbound shipment new West
Memphis location
Mixing Center Regions –
Pre-Memphis Tornado
Washington
Maine
North Dakota
Montana
VT
Oregon
NH
Wisconsin
Idaho
South Dakota
New York
Minnesota
Conn
Wyoming
Pennsylvania NJ
Iowa
Indiana
Nebraska
Illinois
Nevada
Ohio
Cincinnati, OH
Mixing Center
Utah
Colorado
Kansas
Missouri
M
D
W. Va
Virginia
Kentucky
N. Carolina
California
Tennessee
Arizona
Oklahoma
West Memphis, AR
Mixing Center
Arkansas
S. Carolina
New Mexico
Fairburn, GA
Mixing Center
Alabama
San Bernardino, CA
Mixing Center
Miss.
Louisiana
Texas
R.I.
Michigan
Georgia
Florida
Breinigsville, PA
Mixing Center
Del.
Mixing Center Regions –
Post-Memphis Tornado
Washington
Maine
North Dakota
Montana
VT
Oregon
NH
Wisconsin
Idaho
South Dakota
New York
Minnesota
Conn
Wyoming
Pennsylvania NJ
Iowa
Indiana
Nebraska
Illinois
Nevada
Ohio
Cincinnati, OH
Mixing Center
Utah
Colorado
Kansas
Missouri
M
D
W. Va
Virginia
Kentucky
N. Carolina
California
Tennessee
Arizona
Oklahoma
S. Carolina
Arkansas
New Mexico
Fairburn, GA
Mixing Center
Alabama
San Bernardino, CA
Mixing Center
Miss.
Louisiana
Texas
R.I.
Michigan
Georgia
Florida
Breinigsville, PA
Mixing Center
Del.
Key Learnings
•
Immediate response is the key to
minimizing disruption
•
Broad, cross-functional involvement
ensures success
•
Strong relationships with customers and
suppliers allow for understanding and
support
•
Committed employees with deep business
process understanding, working as a team,
are able to deliver outstanding results in a
time of crisis
Thank You!