Let’s get started: Guidance for restarting idled facilities impacted by pandemic

As COVID-19 continues to impact all of us around the world, many companies are mobilizing to respond to the sudden, urgent need for vastly greater stocks of diverse medical supplies and equipment. Breweries and distilleries are turning from producing beer and spirits to making hand sanitizers and other alcohol-based disinfectants. Cosmetic companies are pivoting from face creams and perfumes to medical disinfectants and sanitizer gels. Apparel makers are shifting from sewing shirts and dresses to face masks for the public and surgical gowns. Appliance manufacturers are converting their operations to produce ventilators.

AXA XL supports and applauds these efforts.

This article highlights some common safety and risk management issues when companies go from producing one thing to another. It isn’t meant to be a comprehensive list as many safety/risk considerations are unique to individual company operations. Also, classified medical devices that are subject to specific regulations involving testing and certification, like the EU’s Medical Device Regulation, are outside the scope of this article. Nonetheless, we hope this guidance provides companies with useful starting points for identifying and addressing possible safety/risk implications when repurposing their production lines to address the pressing needs posed by the COVID-19 emergency.

Change management

Changing any production process to manufacture different products can create unforeseen hazards. Thus, before venturing down this path, companies should refer to their established change management procedures to ensure that safety, health and environmental risks and hazards are identified and properly controlled.

This includes training employees in managing the changes introduced. The safety of employees is paramount, as whenever something changes in a manufacturing environment, there is often an  heightened risk to employees unless they are properly trained. It is essential that employees understand any new processes and/or materials and what needs to be done differently. This is critical not only to avoid mistakes and minimize various operational risks but also for their own safety.

Fire protection

There has been a lot of press coverage about distilleries and craft breweries retooling their operations to produce sanitizers and alcohol-based disinfectants, and apparel manufacturers switching from making clothing to masks, surgical gowns and related products. In these and similar examples, the processes and/or materials used to produce the new end products could worsen the fire risks.

Hand sanitizers, for instance, usually have an alchohol level around 70 percent while in spirits like whiskey and gin, it is typically about 40 percent. Likewise, the tissue or non-woven fabrics used in sanitary masks pose a greater fire risk compared to other fabric types. The fire load of synthetic fabrics, for instance, is double that of natural fibers, and the fire spread with lightweight tissue also can increase dramatically.

It is sometimes necessary for production facilities or industrial plants to be fully or partially shut down, remain mostly unoccupied for a period of time, or operate with reduced staff. The following precautions should be taken to ensure the proper level of protection in these idle or partially idle facilities is being maintained.

Maintain all fire protection systems in service and good conditions. All fire protections systems must remain in service even when the plant is shut-down. There should be no planned impairment of fire protection during idle plant periods.

Maintain a core staff on site that could respond to an emergency. Even with automatic protection in service, manual response is needed to control and extinguish a fire. The core staff should include members from the various departments. Arrange and test communication equipment available to team members on and off-site as dictated by the situation. Ensure that the team has written plans to deal with any possible natural hazard.

Maintain adequate management control programs including weekly fire equipment inspections and loss prevention tours. Fire protection equipment must be properly tested, inspected and maintained even when the plant is shut-down. This includes testing of the fire pumps and sprinkler systems. These tests should be performed by an in-house pre-trained core team. Prepare to have minimal reliance on external fire contractors.

Take proper security measures (watchman, etc.) to prevent unauthorized access and vandalism. When the plant is not operating it may become the target of intruders.

Safe shut-down production equipment such as ovens, furnaces, etc. Follow the proper procedures to execute the safe and proper shut-down of all equipment and machinery. Take special precautions for fired equipment and machinery and equipment using flammable and combustible liquids.

Eliminate all controllable sources of ignition such as hot work, smoking etc. When the plant is only occupied by a core staff, all activities that create potential ignition sources should not be permitted.

Maintain building heat at a safe level to prevent damage to sprinkler piping and process piping. In the cold winter season it is important to maintain minimum temperatures in the buildings to prevent freeze-up of water piping. Freeze ups of piping could result in pipe breaks and could cause major water damage since the plant is only occupied by a core staff and a leak would not be discovered right away.

Ensure that utilities such as electricity, natural gas, and water remain in service. Continuous supply of utilities is important to supply key equipment such as heating, lighting, etc.

Discuss the situation with the fire department and develop response plans taking into account the minimum level of employees available on site. With only a core staff on site, the fire department needs to consider these circumstances in their pre-emergency and response plans.

Monitor external risk such as flood and extreme weather. It is important to monitor the external situation and notify additional staff to prepare for a major incident such as a storm or flood event.

Interact with neighbors or adjacent property owners to keep them informed. Keep your neighbors informed of the situation in your plant and also communicate with them to keep yourself up to date with their situation.

Ensure the intranet is completely isolated from the public network or the firewall is impenetrable. There should be no cyber risk during the idle period. Ensure that the UPS is functional.

Develop plans and procedures for a safe start-up of the plant once the situation is back to normal. Follow the proper procedures for the safe start-up of machinery and equipment. Don’t take short-cuts to speed up the start-up process.

The #1 priority for many businesses is delivering high quality products to their customers on time. And they don’t want anything – including the breakdown of equipment – to stand in their way. AXA XL’s Head of Equipment Breakdown insurance, Brian Strain, and Tom Gallagher, AXA XL’s Equipment Breakdown Engineering Leader, have the same priorities. They want their clients to get their products out the door.

Fortunately, preventative measures, including loss prevention strategies, reliability engineering and insurance, are helping protect facilities’ financial health, keep equipment up and running, and high-quality products out for delivery. Here Brian and Tom explain more.

What is the current state of the Equipment Breakdown insurance market?
Strain: Right now, capacity is shrinking. In addition, there are also very few carriers in the market because there are some very challenging exposures, both in terms of complexity and severity of the associated risks.

Of course, the capacity crunch comes at a time when businesses are more reliant on various types of equipment to conduct business in many ways. As this reliance continues to grow, and processes become more automated than ever before, making sure equipment and technology remains reliable and operational is a big part of the production process for many businesses.

When you say “challenging exposures” what do you mean?
Strain: Generally, we’re talking about very large, highly specialized equipment – things like: large forge presses and steel mini mills, concrete manufacturing equipment, paper mills, to name a few. Power generation systems, industrial freezer units, food manufacturing and critical production equipment as well. When systems like these are damaged or otherwise inoperable the impact on the business can be devastating:

• Business Interruption. Downtime for repairs can result in a company’s inability to deliver on existing contracts or even bid on new orders.
• Property. Repairing or replacing equipment can be very expensive. Some of the equipment is one of a kind and lead time for new equipment or even replacement parts can be extreme.
• Environmental. Industrial refrigeration systems that use anhydrous ammonia as a coolant can result in release of toxic liquid and gas that can contaminate food products.

Gallagher: It’s easy to see how far-reaching and harmful breakdown of complex equipment can be. Compounding the complexity of these risks is frequency. We are seeing more of these happening in recent years. That’s why our attention to reliability engineering is a big advantage to our Equipment Breakdown clients. Failure of even a single, (critical) piece of equipment can result in the shutdown of an operation that may negatively impact a facility’s production goals including their ability to deliver product in the quantity and within the timeline promised to their customers. We were the first equipment breakdown insurer to incorporate critical equipment reliability engineering reports into our product offering.