PROFESSIONAL FORUM REPORT
Stand By Me
Two sessions at the Spring 2007 IAMC Professional Forum on Amelia Island sent a message that can't be repeated often enough: Redundancy is a very good thing when it comes to facility planning for business continuity. As one corporate practitioner enthused at the conclusion of the two sessions: "This is why I come here. I'm going to take this home and do something with it."
In his presentation, "Living Under the Volcano," Charles B. Manula, Jr., vice president, global R&D facilities for Wyeth, explained how his Research Operations group has enacted business continuity and emergency response programs. He did so by overlaying ancient history with the present day: After imagining how an imaginary couple may have been going about their daily business just before the eruption at Pompei in Italy, Manula displayed a photograph of himself at a Wyeth facility near Mt. Etna in that same country.
"There are things that could erupt, that could shut down operations," he said, mentioning his own home base's location just down the road from a nuclear power plant. But preparing for such calamities is often something managers are "too busy to take care of." The consequences can be dire: In one study, only 15 percent of companies that experienced a major interruption ever returned to the level of productivity they possessed before the event.
Putting his 26 years of experience to work, Manula has helped to shepherd a team after the president of Wyeth R&D mandated business recovery plans be put in place for every Wyeth R&D site by the end of 2007. The survey for such plans involved 163 question areas, aided by the guidelines provided by the National Inter- Agency Incident Management System published by the U.S. Dept. of Homeland Security in 2004.
Wyeth's main tool has been the "critical asset risk assessment," a formatted snapshot report of vital statistics related to a piece of property, including a photo, personnel contact information and a complete color- coded risk analysis of such factors as power supply, automated and human monitoring and environmental controls. The analysis applies to everything from a piece of machinery to critical sample collections. The process itself has to have its own security built in, such as minimization of hard copies and electronic encryption.
"Not everything is critical, despite what the business unit leader might think," said Manula.
For proper business continuity planning, Manula said, it's important to decide what is truly material to the company and what is not. That determination can be more difficult in an R&D setting, though one rule of thumb can be "the closer we get to manufacturing and launch, the more material we are."
Manula's team has used business impact analysis software from Strohl Industries and the NotiFind service for communications planning. Two people from each site attend a 1.5- day online business continuity certification course. Each site needs 20 hours a person in training for three- person teams that incorporate expertise from IT and human resources and a project leader.
"We didn't bring in extra people to do this," said Manula, just extra urgency, backed by the overt commitment of upper management.
"I've met with executives of all the business units," said Manula. "And I always finish with the slide of our president with his scorecard."
The importance of that scorecard was reinforced with another volcano photograph from the Isle of Stromboli in Sicily. It had erupted two weeks earlier.
Following Manula's talk, Forum attendees gathered for a related session, "Pandemic Preparedness – A Business Continuity Strategy" – led off by Dr. Joseph Ferro, worldwide corporate medical director for Johnson & Johnson.
Spread the Word
Ferro distinguished between SARS and the yearly flu and pandemics by noting that the latter needs a new antigen (H5N1, the "bird flu," qualifies); severe illness (H5N1's 50- percent death rate) and easy transmission of the antigen ("not yet," said Ferro). And he offered captivating notes on the pandemics of 1968, 1957 and 1918.
A conservative estimate is that 30 percent of people would be affected by a pandemic, with up to 1 million deaths in the U.S. and absenteeism of between 50 percent and 70 percent. Companies needing to decide today which people and operations are business critical. The matter is further complicated by the need to determine which products are necessary for society at large.
"Be honest," Ferro said. "Which facilities can you shut down completely today? It's not about bottom line dollars for business," he emphasized, "but what's best for our country."
A pandemic would strike in waves of between two and 12 weeks, with a peak in that first month. With different locations affected in different time frames, supply chains disjointed and customers unwilling to engage in personal contact, a company might have to stagger where it manufactures products, and to stockpile critical supplies … starting today.
Among the recommended interventions are social distancing measures like working from home and non- face- to- face meetings. Protective equipment like respirators, surgical masks, gloves, gowns and hand sanitizers are also recommended – "I'm ordering enough respirators for every person in our company," reported Ferro, and sanitizers, he said, pay for themselves five times over.
Susan Bulecza, program consultant, office of public health preparedness, Florida Department of Health, reported that Florida has plenty of experience with statewide responses to disasters, including the anthrax poisoning in 2002, and has had a pandemic plan in place since the 1990s. "The federal strategy is that no cavalry is coming," she said. "Each state and community is responsible for planning."
Essential People, Essential Industries
For businesses, she said, continuity of operations begins with things like cross- training, building around key functions, not key people. At the same time, it's necessary to send the message that all employees are essential. They also need to consider what seem like ancillary issues: Schools may be closed for up to 12 weeks, for instance – how does that impact business continuity? But rumor control may be the single biggest challenge, said Bulecza. "If you don't address a rumor in the first 24 hours," she pointed out, "it becomes reality."
Beverly Jackson, assistant vice president, vocational rehabilitation for CSX, pointed to her employer's 7.5 million carloads a year: "CSX must continue, because we're critical to America," she said. She recommended doing an insurance review as one first step, in addition to creating redundant teams. "We are business as usual until Phase 5," she said, referencing the World Health Organization's maximum infection scale. "We have succession planning according to function, not pay scale." Tamiflu will go to key people out in the field, not necessarily at the top of the executive tower, she said. And being 90- percent union, the railroad has to examine closely its labor agreements – "it's more complicated than just an absenteeism policy," she said.
At table discussions following the presentations, the relative heft and central role in the economy of so many IAMC member companies became apparent. One major food company has run through various tabletop scenarios, developed a task force and made changes already in terms of final decision- making authority. Another company makes the surgical masks themselves at a facility in Nebraska, and therefore has prioritized how to keep that plant running and keep its products moving. Still another participant asked, "What is the proper role of a landlord of a multi- tenant building?"
Most agreed that leadership might be the most valuable substance to stockpile. "If this happens, it won't be pretty," said one participant, emphasizing the need to put people in charge who are not necessarily the most senior, but who are practical, cool- headed and trusted.
Even absent a pandemic, the planning has had its benefits, said CSX's Jackson, including increased cross- training and increased efficiency.
If such foresight was contagious at this particular Tuesday morning at an IAMC Forum, its impact could well be global in scope.
Corporate Real Estate Asset Manager, Boeing Realty Co., Seattle
Title & Organization:
Portfolio: Owned: 72 million sq. ft. (6.7 million sq. m.); Leased: 15.1 million sq. ft. (1.4 million sq. m.); Acres owned: 13,412 (5,428 hectares); Acres leased: 3,703 (1,499 hectares); Employment: 155,031 (as of end of 1Q 2007); Number of countries: 28; States: 40; Number of Sites: 248; Number of Buildings: 1,740
The Boeing Company, together with its subsidiaries, engages in the design, development, manufacture, sale, and support of commercial jetliners, military aircraft, satellites, missile defense, and human space flight and launch systems and services worldwide.
What does your company manufacture?
Boeing Realty Corporation (BRC), a wholly owned Boeing subsidiary, operates under the Shared Services Group, which reports to the CFO of The Boeing Company.
To whom do you report?
I have worked for 29 years at Boeing, eight years in Corporate Real Estate.
How many years have you worked in the profession?
I am a graduate of the University of Washington with a degree in Business Administration.
Where and what did you study?
At Boeing Realty, responsibility for most projects usually falls on a team, not an individual. The most challenging and rewarding project that I've participated in was the entitlement and disposition of 46 acres (18.6 hectares) of surplus property in Renton, Washington. The disposition comes after the 737/757 Program consolidation – "Move to the Lake" – and two years of entitlement work undertaken by the BRC team, beginning in December 2002 when Boeing applied for a Comprehensive Plan Amendment to rezone the entire 280- acre (113- hectare) Renton site.
Describe the most important transaction or project for which you were responsible.
Approved in November 2003 along with the Environmental Impact Statement (EIS) and Development Agreement, this entitlement package allows for mixed- use office and retail, urban density residential and biotech and commits the city to invest up to approximately $30 million in infrastructure improvements. The Agreements also give Boeing the needed flexibility for its remaining land and ongoing operations. We are currently finishing entitlement work on the second phase of this project.
Blue Ridge Facility Making Many- Colored Drink Wins Gold Award from Green Council
In April the U.S. Green Building Council recognized PepsiCo's Gatorade® Thirst Quencher Blue Ridge facility in Wytheville, Va., with its Leadership in Energy and Environmental Design (LEED®) designation at a Gold- level certification, making it the largest food and beverage site in the world to achieve this designation, at 950,000 sq. ft. (88,255 sq. m.). In addition to design features that optimize water and energy usage, half of the facility's 135 acres (55 hectares) will be returned to their natural state to promote biodiversity.
"This achievement is just the beginning as we continue to keep our environmental commitment on the forefront and work toward achieving LEED certification at other Gatorade manufacturing and distribution facilities," said Jim Lynch, senior vice president, supply chain for Quaker- Tropicana- Gatorade, a division of PepsiCo.
Water optimization in the developing world is on the minds of both PepsiCo and fellow IAMC member firm Coca-Cola, both of which are investing heavily in clean water efforts as well as production. In India alone, Coke is investing in 320 rainwater harvest structures. In late May the company announced it would invest $250 million in India over the next three years, in addition to up to $100 million to be invested in bottling plants by franchisees.
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