Think about the various reasons why a machine tool might be out of service.
Envisioned instances might range from the bearable—setting up a new job or
performing routine maintenance—to the drastic—a machine crash.Though a crash
is certainly damaging in terms of repair cost and production loss, most shop
managers know how to react to and recover from one. It's less likely that they'd
know what to do if a lightning strike set their facility ablaze, or if the
nearby creek overflowed its banks and flooded their building, destroying a
number of high-dollar machines.
Mark Pennington, national service manager for
Kentucky Rebuild Corp. (Independence, Kentucky), believes a number of shops
haven't devoted sufficient forethought to such harsh scenarios. The hours and
days immediately following a catastrophic event aren't the time to first ponder
questions such as: How will we prove to our insurance adjuster what our
equipment was worth? How do we replace a machine that's no longer being
produced? What exactly does our insurance cover?
The key to a quick recovery from a tragic situation is knowing the answers to
these and other questions before a tragedy occurs. Mr. Pennington has appraised
damaged equipment for shops that hadn't thought of those questions, and in some
cases, they weren't able to recover from the significant loss. Other shops he's
visited had an effective recovery plan in place, which allowed them to bounce
back quicker than if they were flying by the seat of their pants.
Because it's never too late to start planning for the worst, Mr. Pennington
offers some food for though for proactive shops that see the value in developing
their own disaster recovery plans.
Know what you have. How can you explain to an insurance
claims adjuster what equipment you have—and, more importantly—what it is worth,
if you don't really know yourself? Having an appraisal in hand for each
big-ticket item can ensure that you get fair market value for any damaged
machines. This independent, third-party opinion helps communicate to a claims
adjuster—who likely doesn't know beans about machine tools—what a machine's true
value is.
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Be Ready To React
Knowing how to recover one's business after a catastrophic
event certainly is important. From a safety standpoint, though, it's more
vital that all employees know what to do during an emergency situation.
J.J. Keller & Associates (Neenah, Wisconsin), which offers software that
allows companies to create their own specific plans for natural and man-made
disasters, has some suggestions.
Have a plan—Safety starts with good planning. That means
every company should develop its own emergency action plan so that workers
know their duties in the event of an emergency. These duties might include
helping fellow workers evacuate the building or making sure special-needs
employees are assisted. Regular emergency drills will reinforce what workers
should do and where they should proceed during an emergency.
Have an alarm (or alarms)—Alarm systems should be loud
enough to be heard over the din of a production facility. In addition, each
alarm sound should be specific to the emergency. A tornado alarm, for
example, should be different from the fire alarm. In areas where production
noise might prevent a worker from hearing an alarm, a visual alert system,
such as flashing lights, should be installed. These alarm systems should
operate via an auxiliary power source in case the facility's main power is
disabled.
Shut down—If time permits before evacuation, all major
equipment should be turned off. Capable employees could be assigned to shut
down critical facility systems, such as gas and electrical power, before
evacuating their work areas.
Establish escape routes—There should be defined emergency
escape routes for every location in a facility. Floor plans and/or work-area
maps that clearly display these escape routes should be found throughout the
facility. Maps may also identify the location of shelter areas or
structurally sound rooms that will offer protection against a tornado, for
example.
Assign wardens—Select workers should be assigned as
evacuation "wardens" to facilitate the swift movement of employees away from
a danger area. A good rule of thumb is to have each warden provide guidance
and instruction for no more than 20 workers during an emergency. Wardens
must be familiar with the entire facility layout and all possible escape
routes. Before leaving the facility, wardens should perform a sweep of as
much area as possible to locate workers who may be trapped or aren't able to
evacuate the area for some reason.
Account for workers—A roll call should be performed once
an evacuation is completed to make sure that all workers have been safely
evacuated. To eliminate potential confusion during a roll call, employees
should always let a supervisor know when they are working away from their
normal location. That way, rescue personnel won't be mistakenly sent in to
look for an employee who was successfully evacuated with another department.
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Document what you have. Knowing what you have means
documenting what you have. The more documentation you have, the better off
you'll be when it comes time to talk turkey with the claims adjuster.
Documentation may include a master list of machines with their serial numbers,
appraisals, maintenance records and proof that the value of a machine tool was
increased in some way (as in the case of a control retrofit). Photos of
equipment may also prove helpful to a shop's cause. Another wise, just-in-case
measure would be to store duplicate documentation off-site.
And don't forget about all the ancillary equipment sitting around those
expensive machine tools—indicators, material, loaded employee toolboxes and so
on. Document as much of this as possible.
Know your machine options. Do you know what extras you
purchased with a machine 5 years ago that you never used or perhaps removed? If
you don't have a good record of exactly what you bought, what are the odds that
you'll remember as you're freaking out just following a catastrophe? One of the
first things an appraiser will want to know to determine fair market value is
what options were purchased with a particular machine.
Know what is covered. Do you know what your insurance covers
and what it doesn't cover? Will your insurance only cut a check in the amount of
the replacement value of the machine tool? What about the production that will
be lost because the machine is down? Lost production insurance can save a
business, but Mr. Pennington estimates that only 50 percent of shops have it. In
the event of an emergency, shops lacking this insurance may have to apply for a
loan or take some other kind of action to make up for this lost stream of
income. For a shop on the heels of a tragedy, this can really crank up the heat
on a situation that's already white hot.
If your insurance does cover lost production, it is important to maintain
records that will show a claims adjuster just how much money a machine's spindle
makes per day. The machine's job schedule should also be presented to show the
extent to which it is booked for the coming months. That will indicate the true
value that the machine brings to the shop.
Consider the entire process. In some cases, it will make
more sense to replace a machine rather than remanufacture it, as the cost to
remanufacture certain damaged machines will be higher than a new machine. This
can be a win-win situation for both shop and insurer. The insurance company pays
less to settle the claim, and the shop comes out ahead by having a newer, more
productive piece of equipment.
But it may pay to take a step back and look at the big process picture.
Instead of focusing solely on an exact machine-to-machine replacement, take this
opportunity to think about what other types of equipment or alternate process
configurations might boost your overall production capability. Though the cost
of this new equipment might be more than the insurance will pay to settle the
claim for the damaged machine, you could come out ahead if some other, more
flexible manufacturing scheme increases production or allows a quicker response
to JIT delivery needs. Think of this situation as a potential silver lining in a
tragic dark cloud.
Oil immediately. This bit of advice is less theoretical and
more action-oriented. As soon as damage has been assessed and appropriate
pictures and notes have been taken, clean machines and dump oil on them
post-haste to try to save as many critical components as possible. Do this to
all machines that may have received general water damage from a sprinkler
system, for example, as well as those that incurred smoke damage. The corrosive
effect of smoke can be just as potent as water.
Don't forget the office. Many companies are proactive in
backing up computer files. If you're not, start doing it. Also, take a moment to
picture your office under 3 feet of water. What would be damaged? Do you have a
safety net in place for those items just a few feet off the floor that would be
destroyed?
This final suggestion Mr. Pennington offers may be the sagest bit of advice:
Apply the same precautionary measures you use for your business to your personal
life. You just never know what's around the corner.
Article courtesy of MMS Online.
