6 Components of Large Machinery/Equipment Recovery Projects

Regardless of complexity, all large recovery projects involving industrial
equipment/machinery assets can be broken down into  a series of small
task-specific components.  The 6 basic components identified below provides a solid foundation to initiate and control the recovery process.

1. LIMIT FURTHER DAMAGE – The single most contributing factor affecting the success of equipment restoration or maximizing salvage return is maintaining control of the environment. Often times, more damage occurs AFTER the fire is out or the flood waters have receded than during the actual loss incident. Residual contaminates introduced to machinery and equipment by disasters commonly contains potentially corrosive compounds that become reactive in uncontrolled environments. Fortunately, numerous preservation techniques are available that have been proven to be easily initiated by in-house personnel with minimal direction. The initial efforts spent on preservation almost ALWAYS provide a drastic return on investment by reducing actual damages. Time-is-of-the-essence, however, the window of opportunity to mitigate most damages following most incidents is relatively short (24 – 72 hours).
2. IDENTIFY AND DOCUMENT ACCURATE INVENTORIES OF ALL LOSS-SITE EQUIPMENT – Knowing exactly what is/was in harm’s way at the loss-site is essential for control. With equipment losses, Murphy’s Law takes on amazing results during final claim settlement if the inventory is not correctly memorialized early in the recovery process. For instance, equipment that was previously thought to be unaffected by the incident suddenly fails and automatically is attributed to the incident.  To determine accurate damage costs, eliminate unjustified replacements and to minimize most post-lost equipment concerns and claims, obtain an accurate, complete, and independent inventory AS SOON AS POSSIBLE.
3. ESTABLISH ACCURATE VALUES – Possessing an intimate knowledge of the equipment industry is the only way to assure establishing proper values. This includes, but not limited to, acute familiarity with equipment restoration potential limitations, costs, salvage market, technology, options, marketability, warranties/maintenance contract options, trade discounts, secondary markets, guarantees… the list is lengthy and current conditions are constantly changing. Don’t rely only on the equipment manufacturer or pre-existing service provider to provide unchallenged assessments and cost estimates.
4. EVALUATE ACTUAL DAMAGE – Obtaining comprehensive damage assessments from the manufacturers or routine service vendors can be extremely frustrating to business owners and claims adjusters. Always address possible conflicts of interest: Does the damage assessment come from the same source offering replacements? Also: Have “real” concerns been properly documented (actual vs. potential damage)? Do proposals meet with all “pre-incident” condition requirements? What is the time frame….and what happens with business operations in the interim? Are all associated costs contingencies included?
5. DETERMINE COURSE OF RECOVERY – Once all conflicts of interests are held in-check, all reasonable recovery options are on the table and associated costs are reviewed for accuracy/fairness the final course of recovery can be mapped out and initiated.  Leading the stakeholders in the right direction is many times left to the business owner and/or insurance adjuster. Sitting back to “see how it goes” does not work on losses involving mission-critical equipment and machinery…time works too fast against successful and efficient recovery.
6. MONITOR RECOVERY EFFORTS AND DOCUMENT – Even the best recovery plans have a tendency to alter course if left to operate without supervision and accountability. Especially true of computer and electronic-based equipment/machinery, recovery variations may result in substantial cost differences. Utilize Equipment Condition Reports (ECR’s) for each unit addressed in the recovery plan. If properly designed and used, this document provides the ability to readily and accurately track/compare actual progress with recovery plan and estimates.

Recovering mission-critical machinery and equipment assets affected by a disaster can introduce significant technical challenges.  Understanding the recovery process components as outlined above empowers an organization to maintain control throughout the recovery process.  Maintaining control of the process allows the organization to explore ALL available recovery options, which leads to making the appropriate business decisions for the affected organization.