News Items

August 30, 2005
Hurricane Katrina

Mississippi, Louisiana, and surrounding states have been crippled in the wake of Hurricane Katrina.

Many businesses have been unable to approach their sites to evaluate the extent of damage. Employees, facing an inability to return to
their own homes or responding
to the devastation they have
found, are focused on their own family’ welfare.  It will likely be several days until basic
community infrastructure is in
place, primary streets are cleared
of debris, and basic utilities are restored.  FEMA, the American
Red Cross and other agencies are
now arriving.  Utility companies
and other support services are enroute from far-away states as
part of their mutual aid pacts to augment the local responders in
their restoration efforts.

Those who did not evacuate as ordered are now considered “refugees”, and are looking to the government for their basic needs.  Those who deed heed warnings
are unable to return at this time,
due to the catastrophic damage to highways.

Unfortunately, lootings have been reported, with police too busy
with rescue duties to combat the
criminals taking advantage of the situation.  The public and
businesses should be on the
lookout for the next level of opportunists - those gouging the price of basic supplies, and the
shady contractors that take the money and run.

Prices for gas and other
commodities are skyrocketing in far-away states, with the nearby customers crying “Foul” as someone, somewhere, profits in
the situations hours after the
events are announced. 

In one small focus of response suggestions, (outside the area of emergency services), what can businesses do?

Recognize this will have an
impact on their business, the employees, and the customers.

Businesses may need to quickly identify alternate suppliers of raw materials, or pay a premium to
have those items brought in
through alternate transportations methods, (such as air express for example). Carefully weigh the
issue of passing increased costs against the action of your competition. Management may
wish to alter schedules and production, focusing on critical business to respond to increased production until the medium-term impacts to production return to normal. Segregate but do not
dispose of damaged hard assets
until directed to do so by insurance
adjustors. Photograph all damage.
Record all extra expenses in a
unique cost center, including
overtime, meals brought-in for
employees, protective clothing, etc.
 

Employees near the disaster may need basics such as food and lodging.  Typically, relocation of employees to other states and business locations is not the answer.   Businesses may wish to arrange for critical production and support employees families, then provide transportation to and from those new quarters.  A 6-hour shift is better then no shift, when transportation time is factored-in. Those businesses with the capability of running multiple shifts at other facilities out-of-state from those affected may wish to consider short-term shifting of production, and offering transportation and shift premium wages to those who will agree to a TDY assignment. Salary and wage continuation to preserve the critical workforce may also be a viable consideration to retain your intellectual property with your workforce.Encourage employees to leave work after a normal shift
time, since productivity goes down while stress and errors go up.

Finally, communicate with your customers.  Do not presume they’ll be getting news from the media. They may indeed be getting “news” from your competition. .  Advise them of delays, your plans for responding to the situation, and
your near and long-term plans.  More information is far better
than no information.  That will provide the best opportunity for retaining customers.