Much More Than IT

Square D's contingency planning involves every facet of the business.

When Square D Co. Inc. began to tackle the Y2K problem three years ago, the company decided that contingency planning would be a key part of its overall strategy. "We had it on our list from the beginning," says Stephen Little, vice president of information services, "and in the last 18 months we've begun to address it very aggressively." Unlike many companies, Palatine, Ill.-based Square D is making sure that its business continuity plan extends well beyond the domain of information technology. Several teams have been created, with all functional areas of the corporation represented. In a series of workshops, employees representing the shop floor, operations, IT, real estate, and other facets of the organization came together to study a wide range of what-if scenarios, crafting contingency responses and developing a number of action plans. "We're very comfortable that things will go well internally," says Little. "Much of this contingency work has focused on how to respond to things outside our walls, like power outages, problems with the telecommunications system, and other systems that we depend on but can't control." Like many large companies, Square D -- which manufactures electrical-distribution, industrial-control, and automation products and systems -- has reached out to its suppliers, looking for assurances that their systems will function smoothly when the clock strikes 12. "We contacted 1,500 distributors and 800 suppliers," Little says, "first with a phone survey and then, if we didn't get the detail we wanted, with site visits." That has resulted in great peace of mind, Little says, although there is concern that some smaller business partners may not be ready. In those cases Square D has lined up alternative suppliers. "We could have built up inventory," Little says, "but we really want to resist that approach -- it's not very practical." The company has built up some key inventories, but only for a handful of products. Little says that in most cases, the essence of the company's contingency plans is manpower. "We've got 30 manufacturing plants in the U.S.," he explains, "and our biggest concern is the automated assembly lines at those facilities." Like many manufacturers, Square D relies on machines that may have been built by, or use components from, companies that are no longer in business. The company has tested everything it possibly can, but there are some unknowns lurking within all that equipment. "We'll have maintenance workers and other staff standing by," he says, "and we'll throw people at problems and fix them as fast as we can." Little says that Square D has not struck any new contractual agreements with service providers or sought help from any new business partners, because "there's really nothing new or unique in the problems that might come up. It's mostly a case of having people ready to address issues. For example, we'll shift some employees to our help desk from sales and service so that we can respond to any customer concerns during that period." Another big concern is power, an irony for a company whose corporate literature states, "Our business is to put electricity to work." At its Palatine headquarters, the company is fortunate enough to have two electrical feeds. "We feel pretty secure," Little admits, but not so secure that the company hasn't also gone to the trouble of parking a huge tanker of diesel fuel on site. The fuel can run the facility's emergency generator for a month. That takes care of life at headquarters, but what about out in the field? "There's no doubt that being a very distributed company adds to the complexity of contingency planning," Little says. The company's facilities, he explains, don't provide much flexibility in being able to move manufacturing or other operations from one site to another, because each site is highly specialized in what it produces and can't be easily retooled to do anything else. And providing the sort of backup that headquarters enjoys is too costly. "We have to trust that the entire power grid isn't going to go down," Little says. "What else can we do, build a substation outside each factory?" For now all the company can do is wait and see. "We feel extremely confident about our internal systems," Little says. "And we think we can respond immediately to any external problems that come up. But no one is going to be taking a vacation that first week in January, that's for sure."

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