Lighting Components and Design Executive Discusses Importance
of Disaster Recovery Contingency Planning With Manufacturing
Executives.

Summary

Jon Cooper, President of Lighting Components and Design spoke on the Importance of Contingency Planning and Disaster Recovery Plans at meeting of manufacturing executives held at its Deerfield Beach Florida headquarters on Friday, December 1, 2000.

Exposures identified included interruptions in:

• Information Systems
• Raw Materials, Parts and Supplies used in Manufacturing.
• Facilities
• Labor Interruptions
• Equipment Shortages and Interruptions
• Power Outages and Weather Disturbances

Jon Cooper summed it up by saying: "...thorough planning and preparation is the best way to avoid having today’s "contingency exposures" become tomorrow’s "reality.

Complete Story

Executives of Lighting Components and Design spoke on the Importance of Contingency Planning and Disaster Recovery Plans at a meeting of manufacturing executives held at its Deerfield Beach Florida headquarters on Friday, December 1, 2000.

In his introductory remarks, LC&D’s President, Jon Cooper, said: "At LC&D, we believe thorough planning and preparation is the best way to avoid having today’s "Contingency Exposures" become tomorrow’s "reality." Therefore, our first objective is to avoid "emergencies."

"The result is that what other companies consider as "Contingency Plans" are "business as usual" for us and are documented in LC&D’s QS9000 Plan, Business Plan, Daily Operating Procedures, etc.

"Our Business Plan clearly identifies, documents and communicates any Material Underlying Critical Assumptions, Risks and Dependencies in attaining LC&D’s production goals (volumes, revenue, costs, etc.).

"Additionally those Underlying Critical Assumptions may identify the need for Special Contingency Plans which reasonably protect against interruption of shipments to LC&D from its suppliers, and against interruptions in the flow of products from us to our customers.

"While Special Contingency Plans may be identified in the Business Plan, the execution of those plans may be the responsibility of other functions as appropriate.

"The following are some items typically considered in Contingency Plans, and how they are routinely accommodated at LC&D.

Information Systems:

• "LC&D uses an integrated ERP (Enterprise Resource Planning) System. All data is stored on our Servers with Daily Backups to assure speedy recovery and backups are stored in a fireproof safe. Weekly backups are stored off-site as well.
• "Mission critical applications are on a server with RAID capability, allowing for real time repair, recovery and replacement in many instances, with NO system down time. Other applications are on traditional PC Servers (also with daily back ups).
• "Next day availability of commercial replacements of PCs, Servers, Software, Cabling, incidental hardware and I/O) from sources such as CompUSA, MicroAge, etc.
• "Mainframe replacement is on a delayed schedule due to lead times, however IBM will provide emergency support directly and through its customers (who may have available computer time in case of catalog problems at our location).

Raw Materials, Parts and Supplies Used in Manufacturing:

• "Integrated Manufacturing and Production Planning System (MAPICS), tying sales, inventories and purchases together to assure timely parts availability.
• "Reorder points and safety stocks are set to assure adequate on hand supplies at all times.
• "Second sources for virtually all raw materials.
• "In house molding of 90%+ of all parts.
• "Available "buffers" at independent molders who have been previously certified as suppliers by LC&D.
• "Perpetual Inventories for all raw materials, WIP and suppliers
• "Daily cycle counts of inventories on a computer-generated cycle (frequency of count is a function of frequency of usage, volume of usage, etc.).
• "Japanese style "KANBAN" parts inventories identifying and counting selected critical parts on a weekly basis.
• "Periodic (annual or better) review of the credit worthiness of our essential suppliers (usually via Dun & Bradstreet reports) to assure their continued economic viability.

Facilities and Direct (Assembly) Labor

• "Business Plan workloads are mapped vs. capacity by shift, to assure adequate protection against unanticipated increases in volumes. We typically address the adequacy of: Direct Labor; Production Floor Space; Molding Machine Capacity; Any other "constraints."
• "Additional plant space and production capacity is added when needed to support the Plan’s labor requirements (normally this is by expanding 2nd and 3rd shift operations, but this year, we increased production space, adding over 50% to our plant capacity. We also acquired several items of capital equipment to avoid potential future capacity constraints.
• "Additional labor is readily available in the local South Florida Marketplace, at competitive (low) labor rates.
• "Offshore sourcing remains an option in case of a major longer-term business interruption. We have a proven "ready, willing and able" vendor in the Dominican Republic able to ramp up staffing very rapidly on high labor content jobs in case of a major business interruption at our U.S. facilities. This vendor has between 300 and 500 assembly laborers, and a virtually infinite supply (the country has a 50%+ unemployment rate).

Equipment Shortages

• "All production equipment, tools and test equipment is tracked in our maintenance database and maintained in first class condition. The system automatically identifies items due for scheduled (and non-scheduled) maintenance, maintains a history of equipment maintenance by machine, etc.
• "We have numerous "back-up" and "duplicate" pieces of equipment, so that a "machine down" does not normally create an emergency situation.
• "We use excess capacity on 1st and 2nd shift (even 3rd shift if necessary) in case of an emergency - but that has seldom ever happened.
• "We concentrate our equipment purchases with major manufacturers who have readily available inventories of spare parts, and local support organizations in the event of an emergency "machine down" situation. These vendors include Nissei (molding), Amp (Wire Cutting and Splicing), etc.

Power Outages and Weather Disturbances

• "There has never been an interruption to customer deliveries due to weather or power disruptions. Never-the-less, businesses located in South Florida are subject to strong, seasonal rainstorms and other weather disturbances and related short term power disruptions of several hours at a time, once or twice a year.
• "LC&D has been manufacturing in South Florida since 1993 and we have never experienced a power outage of more than a few hours.
• "In every case, lost production was made up within 8 hours of power being restored by using a combination of 2nd shift capacity, overtime on 1st shift, and internal job re-prioritization.
• "This was accomplished at no additional cost to our customers.
• "Calamitous long term power outages are difficult to protect against, and at present we have no plans to bring in huge auxiliary back up power generators.
• "For now, such exposures are considered to be outside our definition of "… Special Contingency Plans which reasonably protect against interruption of shipments to LC&D… (and) our customers."

Other

• "LC&D has an excellent relationship with its suppliers. In an emergency, when we need quick help from our suppliers, they treat us as one of their preferred customers and do whatever is necessary to help (accelerate deliveries, provide scarce parts, etc.).
• "Our company has a multi-million-dollar line of credit with its bankers. In the final analysis, in case of a serious business emergency, "money talks."

About Lighting Components and Design, Inc.

For further information about LC&D: who we are, what we do, company history, ISO/TS 16949:2002, recent developments, etc., click here.