Marketing After a Disaster

Marketing after a Disaster
ISA Sales and Marketing Summit
August 16th , 2012

Kyoko Fokuda & Marcus Tennant
Yokogawa Electric Corporation

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Copyright © Yokogawa Electric Corporation -1-
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Outline

Company overview

Automation & control focused aspects to
a disaster

Marketing and Sales considerations

Suggestions & conclusion
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Company overview

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Our Organization

Founded in 1915 Global Leadership
96 years of dedication One of the founding members of
to the industry the Fieldbus Foundation

Commitment
Tokyo, Japan
Our ―Vigilance‖ mindset is committed
World Headquarters to building the future to last for
customers.

sales Global Network
Global consolidated sales over 70 companies outside Japan
US$ 3,916 million @ 2010 including 12 manufacturing
centers

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Sales by business segment

FY10 sales by segment
(Million US $)

Industrial Automation & Control Test & Measurement

3,135 80.0% 446 11.4%

New & Others

335 8.6%

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Global leadership / Local partnership
Regional SO As of July, 2011
Regional SO Europe,
Netherlands China, Shanghai
Regional SO USA,
Corporate HQ, Tokyo
Houston

Yokogawa Europe B.V.

Yokogawa China Yokogawa Corporation

Europe Of America

Yokogawa Electric Corporation

Japan Americas
Middle East

Regional SO Middle East,
Bahrain Asia Yokogawa Electric
Regional SO Asia,
Singapore Corporation
4,723

Group companies Worldwide

Yokogawa Middle East
outside Japan
10,009 19,334
Group companies
: existing Yokogawa offices in Japan
and production facility 4,602
Yokogawa Engineering
Asia

Russia Saudi-Arabia India China, Suzhou Korea Australia Brazil America,Georgia Canada Calgary
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Automation focused aspects to the
Earthquake/Tsunami

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Epicenters

200 km
(125 miles)

Fukushima
Daiichi
Sendai 450 km
(280 miles)
Nuclear Power Plant

Kobe Tokyo

No tsunami waves
were observed.

Tsunami waves of
40.5 meters (> 133 ft)
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Comparison of Damages (1)

Damages Great Hanshin Great East Japan
Date/Time 5:46 a.m., January 17, 1995 2:46 pm, March 11, 2011
North of Awaji-shima Island 130 Km off Sanriku Coast
Epicenter
N34’ 36‖ E135’02‖ N38’ 6‖ E142’ 52‖
Focus 16 km (10 miles) 24 km (15 miles)
Seismic Intensity Level 7 Level 7
Magnitude 7.3 9.0
Death Toll 6,434 15,859 (90%< drowned)

Missing 3 3,021
Serious 10,683 1,478
Injured
Light 33,109 4,629
Total 104,906 130,171 (incl. total burn 275)

Housing Half 144,274 258,352 (incl. partial burn 4)
Damages
Partial 390,506 747,058
(incl. inundated houses 747,058)

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What was learned by The Great Hanshin-Awaji Earthquake

Plant Management point of view
Operator will be in panic immediately after earthquake, do not
expect complex decision
-->Preparations are important
Automatic sequence, Train people, Easy understanding

Manual/Procedure and cyclic training were effective but not for
all cases
-->Effectiveness of manual/Procedure and training are
depend on the contents and quality
-->Foresight about disaster is important

Need to know there are so many operation after plant shutdown
-->Need to prepare procedure manual after shutdown
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Research results :The Great Hanshin-Awaji Earthquake
Do not expect complex decision
* Operator’s mental condition free format
immediately after earthquake
S ei i
sm c
5 m i tues after earthquake
ni 1 hour after earthquake
Intensity
*I P ani
n c * A lttl bi cal dow n
i e t m
-H ow to defend one' body
s -S af check,i
ety nstant
6-7 -Fear & U neasiness under counterm easure,prevent l eak,
darkness confrm saf etc
i ety
-C annot hear al by noi
arm se -P l m angem et arri to pl
ant ved ant

*P ani & cal depend on i vi
c m ndi dual *S lghtl cal dow n
i y m
-S af check etc
ety -C heck dam eges & pl
an
5 -U neasi ness & C al operator
m counterm easure
-P l shutdow n & C onti
ant nue to -A ct accordi to the m anual
ng
operate - P l m angem ent arri to of i
ant ved fce

*K eep cal near narm alsi
m tuation
*A l ost cal
m m
-S om e part of pl stopped
ant
-A l ost conti
m nue to operate
3-4 -C ontinue to check &cope w i
th
-C heck abnorm alty
i
abnorm alsi tuati
ons
-O perate accordi to the m anual
ng
-N orm aloperati ons
Source: The Society of Chemical Engineers Plant Operation Engineering Special Research Jan 17, 1996
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What was learned by The Great Hanshin-Awaji Earthquake

Yokogawa research about Plant Automation
1. Plant were not shut down under strong earthquake
– Many customers checked their operations whether they should shutdown
plant or not.

2. Damages of Automation Devices
– To fix Devices to the floor mitigate the damages compare to the not fixed
devices
-->Every important devices and other asset need to fix to floor or
fixed table
( EX: PC fall down from desk and break, Bookshelf hit the
control system)
-->Earthquake tolerance design is important

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Damages of The Great East Japan Earthquake

Damages
– Earthquake
• Short-period earthquake ground motion
• Long-period earthquake ground motion(Sloshing)
• Liquefaction
– Tsunami

What we learned by The Great East Japan Earthquake
– Preparations and training are important
• Prepare and train to act immediately after disaster
• Training to support immediate decision is important
• Need to prepare any thinkable case, not to limit by the past
experiences

Change risk
Un-Acceptable -->Acceptable
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Lessons learned about automation system

<Preparations are important>
• Need to install important system to the higher level than
Tsunami

• Need to store the Back-up media and software to the
safety area
• We can provide hardware but it takes long time to
prepare software

• Need to store latest documents documents to safety area
• Need to brush up documents
• Latest documents are effective to prepare hardware

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How we face with the disaster

Preparation to avoid Un-Acceptable Risk
– Analyze disaster and make countermeasure for risk
• Un-Acceptable Risk --> Acceptable Risk

– Countermeasures:
• Minimize decision speed and support quick action:
Prepare manual, Train people,
Share information of case study
• Reinforce asset, system and software to avoid risk:
Simulate and reinforce
• Prepare for recovery:
Prepare latest documents and software to the safe area

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Customers in the impact zone
• A saleswoman’s story
• Many plants lost equipment as well
automation
– Automated plants did not have the workforce to
remove the debris
• Customers shifting emphasis
– SIS systems
– Remote backup
– Energy savings

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Company response
• Prioritized manufacturing and logistics to
meet impacted customers needs
– Canceled/delayed orders to non-critical and
completely destroyed facilities
• Shifted Manufacturing days and work
hours to reduce electricity demand
• Cool Biz clothing
• Flexibility in commuting and working at
home
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Road Recovery
• On March 11, total length of 870 km (=
540 miles) of roads were damaged.
• By March 22, 93% or 809 Km (= 505
miles) of them were recovered for through
traffic.
• The picture on page 1 shows the road
damage (photo taken on March 12).
• The second picture shows how it was
recovered just in 6 days.
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Marketing and Sales
considerations

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Home Depot: Leadership in Crisis Management

Wal-Mart before Home Depot after.
The need for speed
– Opening stores for business after a natural
disaster is the top priority
Value of Preparation and Prepositioning
A Clear Command structure uses ICS system
– CEO
– Regional VP
– Store Manager
Katrina
– Started Mobilizing 4 days before hurricane hit landfall

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Crisis Response organization
Never a fireman but got to play one on TV
Wise to understand incident response organization

http://www.training.fema.gov/EMIWeb/IS/ICSResource/assets/reviewMaterials.pdf
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Marketing’s role in a Crisis

Product Management Marketing Communication

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Information officer

MarComm Should lend support to person
assigned to this role or take the position

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Marketing Communication- Expertise

What is the best communication method?
– To Customers
– Employees
– Public & other stakeholders
You are the company expert on the latest
communication methods– not corporate
communications or HR.
Make recommendations to Incident Commander
or Information officer
– Email, sales network, facebook, twitter
– Rapidly changing - more and more options

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Product Management

ICS command structure contact logistics commander
Hardware
– Inventory
– Demos and other spare capacity
– Beware of large orders of critical products
– Understand what critical compensates of your product are
Software
– Media
– Licenses
– Installation
– Backup configuration
– Supplement technical support
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Other suggestions taken from case studies

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Preparing for Evil HBR-Mitroff & Alpaslan-2003

Crisis-prepared companies are proactive.
– They force themselves to confront crises they’ve never experienced—or can’t
even imagine. These organizations encounter fewer calamities and recover
faster. They also stay in business longer and fare better financially

Internal Assassins- Ask cross functional
team with their insider knowledge
how they would destroy the company

Hire outside outsiders to test systems

Wheel of crisis exercise

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Conclusion

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Plan for the unexpected

―One of the extraordinary things about human
events is that the unthinkable becomes
thinkable.‖

Salman Rushdie

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Thank you for your attention

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Marketing After a Disaster

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