Computerized contingency planning can aid RMs. (risk managers) (Risk Management Employee Benefits Services Review)
Sutherland, J. Warren."Computerized contingency planning can aid RMs."National Underwriter Property & Casualty-Risk & Benefits Management.n20(May 17, 1993 n20):11(2).General OneFile.Gale.Apollo Library.12 Apr. 2009
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Abstract:
Risk managers are now offered a variety of contingency planning computer software programs that will help control potential losses without the cumbersome paperwork of conventional contingency planning systems. Managers must use care in selecting software that is compatible to the company's computer system and capable of storing and integrating more than 100,000 high-risk entries. Computerized contingency planning systems must include an analysis of all equipment and utilities.
Gale Document Number:A13771990
Full Text:COPYRIGHT National Underwriter Company 1993
Planning for the unexpected has always been a top priority for risk managers. But trying to piece together critical information to forecast possible events is a difficult, time-consuming part of the process.
Contingency or pre-emergency planning-a proactive set of procedures to control potential losses--is particularly challenging, especially as it applies to equipment losses.
Not only are conventional contingency planning methods cumbersome, they aren't designed to suit the financial needs of risk managers. But advanced computer programming techniques and capabilities are tools that may be more suited to risk managers' needs.
Traditionally, the paper method has been used. The paper method of contingency planning is more or less a cataloging of information about critical equipment. Each piece of equipment has one page in a contingency manual, which includes a host of information about what to do in the case of a loss.
This record is not designed to be user-friendly for the risk manager, however. And, for large manufacturing concerns it can be terribly inefficient, especially those companies with a number of plants in different locations.
Contingency planning manuals for multi-location companies can be thousands of pages in length. Finding and putting together information often takes long periods of time and can only help direct companies about how to get back in business after an outage. Further, this traditional manual format does not focus on loss prevention or loss control.
On the other hand, many risk managers would find a computerized contingency manual essential if it were designed to suit their needs. For instance, the tool would be worthwhile for risk managers if it could help calculate probabilities of maximum losses, help determine deductible levels and calculate other financial effects of equipment breakdown.
With the advancement of computer technology and programming, there are, in fact, software contingency planning packages that help them develop a pre-emergency action plan and quantify and control their exposure to equipment-related risks.
Risk managers, however, need to know what to look for in pre-emergency software. An effective software program is one designed to both improve the preparedness of a company in the event of an emergency and help it avoid losses as well.
One of the critical functions to look for in a contingency planning software package is implementation support. Such support should include analysis, course of action, and cataloguing assistance--as well as tabling, reports and housekeeping functions.
To begin an effective pre-emergency program, management should first look for a package that is compatible with their computer system, preferably one that is operable on a personal computer's hard drive.
The software should be sophisticated enough to be able to store and integrate more than 100,000 high-risk equipment entries.
While this may seem like a lot of programming for a mid-size company, pre-emergency planning specialists say otherwise. Even if the company has few and moderate exposures, it should still choose a more advanced program, the specialists say.
By so doing, companies will be able to expand the number and level of risks at their locations without having to convert to a higher capacity program.
Next, management should take the time to properly implement a pre-emergency planning program. First and foremost, this means properly collecting and inputting information from the start.
In addition to the choice of a software package, the process of establishing a computerized contingency planning system must include a systematic analysis of plant utilities, such as steam, compressed air, electrical distribution and any other support systems, together with the plant production equipment. Of most importance are the equipment and systems that have a direct bearing on plant production.
A piece of equipment or machinery is defined as being critical to production if its failure results in a serious loss of production. Today, more and more equipment falls into this category. Analysis of this kind of input helps identify the critical exposures and vulnerabilities of production.
Following this analysis, risk managers, together with plant managers, need to plot a course of action to take in the event of critical equipment failure. The four "Rs" should be considered at this stage--repair, replace, rent or reroute--to help determine what course of action is the best to take, both from financial and practical perspectives.
All equipment or machinery deemed critical to production, as defined in the analysis stage, needs to be identified and catalogued at this point. This equipment should then be tagged with pressure-sensitive labels to advise plant workers where the emergency plan is located, so that quick response in an emergency is possible.
Once all of this information is gathered, it can be entered into the data base and, if needed, combined with any other location information within the company.
Having a tabling function makes it easy for equipment information to be put into the system. Other systems that don't have a set format are harder to use, and there is always the chance that not all of the proper information is recorded, or accurately recorded.
Most pre-emergency planning programs are offered on disks--and for good reason. Many different locations are thus able to use it on-site at the same time. When risk managers need information from their different plants, the plants can send it by means of a courier or mail the disk to the main office.
This cuts down on travel time for risk managers and helps centralize information. Alternately, the information can be downloaded by means of a modem to the risk manager's hard drive.
The ability to print reports from pre-emergency software is one of the greatest benefits of the system for risk managers. At the same time, the diversity of reports is equally valuable. Risk management reports can include everything from plant equipment summary and location table summaries.
Computer-generated reports help risk managers set deductible and self-retention levels, focus on areas of formal contingency planning and prompt plant personnel when code inspections are due.
Another desirable feature is a special "housekeeping" screen, which can help provide users with more information and flexibility. Housekeeping screens can re-sort information for different uses, have backup functions to store information and help the user with data collecting or modification.
While the benefits of pre-emergency software are many, among the most valuable is that both risk managers and plant workers can use this tool on the job to help prevent and controllosses--and save money.
With computer tools, risk and plant managers are able to quickly locate temporary replacements within their different plants at the touch of a button, instead of poring over pages in a manual. The computer tells the user what equipment is compatible and operable in an instant. So not only do risk managers become more efficient, they can also make better-informed decisions.
Unlike the paper method, computers are able to store a wealth of data in an organized way as well as put data to work. As a result, pre-emergency plans have been transformed from simply a record-keeper into a total risk management piece of software.
Gale Document Number:A13771990