Lessons Learned: Managing the Unpredictable
by Vart Adjemian |
| Chief Operating Officer Vart Adjemian |
On May 19, 2003, a fire caused heavy damage to our Oakwood, Georgia Further Processing facility.
Fortunately, despite the rapid spread of the fire through the ceiling
of the building, the plant was promptly evacuated and none of our
employees were seriously hurt. Unfortunately, two of the three
processing lines were destroyed and the building sustained structural
damage.
Thanks to the concerted efforts of our Processing and Management teams, we secured the building
in just two weeks and were able to start operating and producing on the
third line.
A big THANK YOU to Jimmy Kemp and his team.
The fire left us with a significant shortfall in production capacity. Part of the lost capacity
was replaced by copacking arrangements, and part by ramping up the new
line which was recently installed in Decatur. Another part of our
business was lost or intentionally discontinued.
Now we are working diligently to resolve insurance issues and, more importantly, to
develop long-term strategic alternatives to replace the lost Oakwood
capacity. Admittedly, this is a formidable task that will, at least for
some time, delay our plans for strategic growth. The new Decatur line,
for example, was built to handle new growth business; now it is instead
being used to service existing business.
What are the lessons to be learned from this unfortunate and untimely accident?
1 - In spite of all efforts and the best laid plans, unexpected and unpredictable accidents do
happen. We must thus be attentive and continually review, update and
upgrade our operational procedures and safety measures. In the case of
Oakwood, the investigation has not yet definitively identified the
cause of the fire. However, we do know that it was quickly contained
thanks in large part to plant management, which had taken the time to
familiarize the Oakwood Fire Department with the layout of the plant.
2 - In a highly competitive and economically challenging marketplace, reliability of supply and
service and continuity of operations are the keys to business survival,
competitive advantage, and future growth.
3 - Using copackers might sound simple, yet it is a difficult and complicated task. Indeed, it is
an undesirable position to be in for the following reasons:
- Customers now have extensive review
systems to approve specific products, processes, and supply plants.
Thus, to find a copacker who is already approved, we are usually forced
to turn to a competitor.
- The competitor naturally puts its own interests first, and
views the situation as an opportunity to make a windfall. As a result,
we inevitably get squeezed between the customer and the copacker.
Moreover, we find that the copacker attempts, and often succeeds, in
taking over the customer's business.
- Customers are demanding and impatient. Their priority is
reliability of service, high quality and consistency of product--all at
a competitive cost and price. In order to retain them, we have no other
option than moving fast to replace the lost capacity.
4 - Improved communications are an
absolute must, internally and externally. Unforeseen accidents like
this test our communication skills and their effectiveness. They force
all of us to learn whole new ways of making things happen in crisis
situations.
5 - In business, as in our
personal lives, unexpected events do affect us adversely. We cannot and
must not be victimized by them. We have to control our calendars and
plans and be ready to make difficult choices when necessary.
With everyone's support and
help, I am confident that we shall be able to fix our damaged sails and
again have the wind at our backs.
Vart
E-mail: Vart.Adjemian@conti.com 