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Business Continuity in Action: HRS

Friday 19th May
Business Continuity in Action: HRS

Unprecedented rainfall causes chaos in the Calder Valley

On the 26th December 2015, following months of unusually heavy rainfall, the River Calder at Sowerby Bridge reached 3.55m, the highest level ever recorded. When the river burst its banks, it caused devastating damage to thousands of homes and businesses throughout the 20-mile stretch of the Calder Valley – right in the middle of the Christmas break.
By the time local authorities contacted our client, HRS Heat Exchangers Ltd, on the morning of 27th December, contaminated flood water was already flowing through their factory.

HRS Heat Exchangers take the full force of the floods

HRS Heat Exchangers Limited manufactures heat transfer products and systems which are used across the globe in sectors as diverse as heating & ventilation, food manufacturing, chemicals, pharmaceuticals, energy and environmental protection. With its head office in Watford, the business operates manufacturing units in India, Spain and at Sowerby Bridge, in West Yorkshire.
This successful British company had an enviable order book, so when the deluge hit, not only was the material damage quite severe, they faced a potentially catastrophic problem, of not being able to fulfil existing orders, risking the loss of future business.

For any manufacturing business, it’s times like these when the quality of their insurance programme really counts. Not only that, HRS would now find out how quickly their Business Continuity Plan (BCP) could help them resume production. Over the days, weeks and months to come, HRS would be glad to be a long-standing client of Kerry London.

Kerry London spring into action

Just after 3pm on the 27th December, Kerry London received a call from HRS, advising of the situation. Within 10 minutes, we had emailed our client to advise them that we had made contact with their insurance company and loss adjustors and offered practical advice on how to safely mitigate the loss.

Business Continuity in Action: HRS

Even though much of the town was underwater and most businesses in the area were closed, we were able to locate and install the right equipment to fight the flooding. By 6pm that evening, just three hours after initial notification, water was being pumped out of the factory.

On 29th of December, Kerry London appointed LOREGA as loss assessors to act on behalf of HRS and ensure they received a fair settlement. LOREGA attended the site the following day to begin assessing the damage and the full extent of the claim.

The floodwater had caused significant material damage. But in addition to dealing with the cost of repair and replacement of fixtures and machinery, it was essential to the future of HRS and their employees, that the factory could get back to production as quickly as possible, to fulfil existing, pending and future orders.

Working quickly to find practical solutions

Working alongside HRS we were able to clearly identify that;

    • Whilst there was provision in the BCP for production to be moved to Spain, HRS believed that the economic and social impact of job losses on the local area would be too great;
    • It would be more cost effective to re-locate the factory than to re-instate the flooded site;
    • Given the recent flood history, the ability to obtain adequate insurance cover would be compromised and potentially cost prohibitive.

It became very apparent that the best course of action for HRS was to find a new production facility, and do it quickly. By the 20th of January, we had helped our client to source and move into new premises just 5 miles from the original site.

As a result, HRS were able to recommence production in the local area by the end of January, just one month after the floods had struck and with minimal disruption to their workforce and workflow.

The best possible outcome, in difficult circumstances

By working with Kerry London, HRS had protected their existing and future business and more importantly, their brand reputation. Any damage to their order book could have had a lasting impact on the long-term profitability of the company.

Business Continuity in Action: HRS

We’re proud of the way we helped HRS Heat Exchangers to recover so quickly from the impact of the flooding. By the end of March 2016, some 17% of businesses across Calderdale were still not operational*. But because we fully understood the needs of the business, Kerry London had ensured the necessary procedures and protections had been put in place for such an event.
In the words of our satisfied client;

“Without Kerry London, our ability to continue to manufacture in the UK would have been in serious doubt. They had insisted we had exactly the right insurance cover in place – but we had no idea that their advice would become so valuable. And when we needed them most, they reacted incredibly swiftly to ensure that we could get production back up and running on a new site in super quick time and protect both our existing orders and safeguard future orders.
We continue to be impressed with the attention to detail and support Kerry London are providing as they help us to review, adapt and test our BCP to make sure our business is secure against any future, unforeseen circumstances.”

Paul Wright, Financial Director, HRS Heat Exchangers Ltd.

* Source: Economic Impact Assessment of the Boxing Day Floods (2015) on SMEs in the Borough of Calderdale (University of Leeds, April 2016)

Key learnings from this business continuity case study

HRS learned some important lessons from what could have been a hugely disastrous event:

      1. In manufacturing, it is incredibly important that Business Continuity Plans are regularly reviewed, tested and adapted to ensure the business will be resilient in the event of a major disruption – by working alongside Kerry London, HRS can be totally confident in the robustness of their BCP;
      2. Loss Assessors Fee Indemnity Insurance offers important protection in the event of a major loss. Because Kerry London had advised HRS to buy this cover, we could immediately appoint LOREGA to handle the claim and negotiate the best possible settlement on behalf of HRS at no further cost to them. We had made sure HRS had the right cover in place to protect their business when they needed it most;
      3. Finding the right insurance partner can make the difference between business disaster and speedy recovery. Kerry London’s commitment to providing total support to our clients meant that even when our offices were closed over the Christmas period, we acted immediately to advise HRS on their best course of action – and support them to minimise their losses, identify a recovery plan, move premises, and get production back up and running as quickly as possible.

The right insurance partners

Disaster can strike a business at any time. In the manufacturing sector, it is vital that businesses have the right insurance partners – a team that knows how to get production back on track as quickly as possible, protect reputations and safeguard order books. If you want complete reassurance that you’ve got the right insurance protection and a robust business continuity plan in place, then talk to Kerry London today.

 

Take advantage of our exclusive partnership with leading Business Continuity Planning experts Inoni, and receive up to £1,000 worth of Business Continuity consultancy and services. To learn more, visit www.kerrylondon.co.uk/bcp, or email us at bcp@kerrylondon.co.uk

 

Disclaimer

Whilst every attempt has been made by Kerry London Limited to ensure that the information contained within this document was correct and accurate at the time of publication, Kerry London Limited accepts no liability for decisions based solely or in part on the information contained herein. You are advised to seek appropriate professional advice before making any change to your Business Continuity Plans.

Categories: Manufacturing,

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Business Continuity in Action: HRS