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Flooding in Thailand and the impact on business

Guest Blogger – Ed Correia, President & CEO, Sagacent Technologies, Inc.

After a six week shut-down, Western Digital’s hard drive plant in Thailand has been pumped dry and has resumed production – sort of. This plant has been responsible for 60% of the company’s hard drive production. While the six feet of water that had been filling the plant is now gone, only some of the manufacturing processes have resumed. However, some of the company’s hard drive manufacturing functions will likely not resume again until February or March of 2012!

As you may recall, the amazing flooding in Thailand has affected the whole computer industry in a major way as much of the world’s hard drive production is centered there. Since the flooding began on October 15th many of these manufacturers have been under several feet of water. The result has been the loss of income for hundreds of thousands of Thais (the Western Digital plant alone employed some 37,000 workers) and a big cut in general hard drive availability to both computer manufacturers, reseller’s (like Sagacent Technologies) and consumers alike. In many cases, we (Sagacent) have been struggling to fill the typical end of year surge in computer and server purchases and quite frequently seen a doubling and tripling of hard drive costs – if we could find them.

However, there is another lesson to be learned here, and it relates to our own businesses. While the flooding that caused all of this was certainly unexpected and unprecedented in recent times, it was nonetheless in the list of Sagacent’s ‘top 5 things’ that I warn my clients to be prepared for from a business continuity and disaster preparedness stand point. Western Digital’s production has suffered a significant hit at a key point in their year. They are expecting to incur special costs of between $225 million and $275 million as a result of this disaster. How would your business fare if it were flooded – or some other disaster impacted (1) total productivity for six weeks, (2) partial productivity for months to come, and (3) it had to incur huge costs in order to become productive again?

It should make you think. And it should make you sit down with your key management and trusted advisors and say, “how would we deal with x happening and what would we do about it?” That is where Business Continuity Planning begins.

– Ed Correia

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