Preparing for Disaster: What’s The Worst That Could Happen?

Ebola is on everyone’s mind, I guarantee. But when you think about it, how likely is Ebola to affect the continuity of your organization, let alone your community?

Realistically speaking, what is the risk that Ebola will shut down your business, compared with the other risks that your company might face, such as the risk of fire, flood, earthquake, illness, or cybercrime?

“You can’t stop the rain by worrying about it.”
Tadahiko Nagao

You have a finite budget and other resources, so you cannot adequately prepare your organization for every possible emergency, disaster, or catastrophe. You have to get the biggest bang for your buck, so to speak. So, where are your limited resources going to go?

Failure mode effects analysis, or FMEA, has been around since the 1960s. It is a stepwise approach for identifying possible failures in a design, manufacturing, or assembly process or in the development of a product or service. FMEA is not often thought of as a tool for emergency preparedness, though its simple, straightforward design lends it very well to the process. Here’s how it works:

  • Gather a number of people who, among them, have solid knowledge of all aspects of the business. Add to that team subject matter experts in building and services maintenance, health and safety, and business communication. This is your emergency preparedness team. These people have to work well together, so this team has no place for prima donnas, know-it-alls, or finger pointers.
  • Have the team identify organizational assets and services in column A of the FMEA spreadsheet (table 1). In the example, we’ve listed the organization’s building; if you have multiple buildings, especially if they serve different purposes, you may want to list each building separately.

For each asset or service…

 Table 1 - FMEA spreadsheet example

Table 1, FMEA Spreadsheet Example

  • Identify the ways in which failure could occur – potential failure modes – in column B. In table 1, we show “building closed – operations cease”.
  • In column C, identify the possible results of each potential failure mode, or the potential effects of each failure mode described. The effect shown in the example is “customers looking for other suppliers”.
  • Determine how serious the potential effects are and rank each on a “1-10” scale (column D), one being an insignificant effect and ten being a catastrophic effect. If you have more than one potential failure effect for the failure mode, focus on the one the team ranks the most severe.
  • List the potential causes of failure, or threats, in column E of the spreadsheet. In the example, flood, sewer backup, fire, tornado, and earthquake are shown.
  • Next, list the likelihood of each cause, or occurrence (on a 1-10 scale, one being the least likely and 10 being virtually certain to happen). in column F. Here, we show sewer backups and fire more likely to happen than a flood, tornado, or earthquake. Insurance companies and your state emergency management agency may be able to help you make that determination.
  • In column G, note the current controls in effect that make the cause likely or unlikely to happen. You see in the example that floods are unlikely to be a serious issue for us because we have built above the 100-year floodplain.
  • For each control in column G, determine its detection rating (1 meaning the control is virtually certain to detect a problem and 10 meaning the control is certain not to detect a problem, or that a control does not exist) and list that number in column H. (Question: Do you see a problem with the detection rating for the current control in line 1?)
  • Column I contains the risk priority number, or RPN, for each potential cause of failure. The risk priority number is the product of the severity (col. D), occurrence (col. F), and detection (col. H) ratings. (Question: What do you think the RPN for “flood” should be?)

Perform this exercise for each asset/service and cause of failure. This should give your emergency preparedness program a solid foundation.

 * * * * * * *

REFERENCES

  1. “Failure Mode Effects Analysis (FMEA)”, ASQ International[1]http://asq.org/learn-about-quality/process-analysis-tools/overview/fmea.html.
  2. Reid, R. Dan, “FMEA: Something Old, Something New”, Quality Progress (May, 2005) – http://asq.org/quality-progress/2005/05/standards-outlook/fmea-something-old-something-new.html.

[1] Excerpted from Nancy R. Tague’s Quality Toolbox, 2nd Edition, ASQ Quality Press (2004), pp. 236–240

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Posted in Business Continuity, Disaster Planning

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