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TRANSCRIPT
Beyond the ERP:
Enterprise Risk
Management
PRESENTED BY:
Tim McSwain, Claims Consulting
Andy Mawdsley, Southern California Edison
Brint Smith, John F. Throne & Co. Insurance Marketing, Inc.
Maintenance Management Conference | Tampa, FL | April 23 – 25, 2014
Wednesday, April 23 | 8:35 a.m. – 9:30 a.m.
Beyond the ERP: Enterprise Risk Management
• Scenario and analysis
• ERP Checklist Scheduling/Dispatch
• Total Cost of Incident / Event / Risk (to Enterprise)
• Takeaways
Agenda
2
Beyond the ERP: Enterprise Risk Management
B&G Storm Door and Aircraft Repair, Inc. (B&G), a maintenance contractor to Humongous Inc.’s (HI) G-
V, was dispatched to HI’s hangar to clean the jet before a trip with an important customer. B&G, which
had no one available, subcontracted it Speedy Clean Landscaping LLC which dispatched Ralph
“Quickrag” Smith in his 1994 Ford Explorer. He had his 15 year old daughter, Bernice, and two of her
classmates with him (and no place to leave them) at the time.
The job done, Ralph was wrapping things up in the HI’s rep office, when they heard a very loud,
undiscernible noise coming from the hangar. From the window, they saw the Explorer, which had been
parked outside the closed hangar door, had crashed through it, brushed aside a tug and hit the G-V
squarely in the nose gear. It appears the Ford’s power had also pushed the jet backwards off its chock,
hitting a Falcon 2000 and another tug.
How it had happened is not clear and, fortunately, neither of the girls who were in the car were not
injured, at least not by the accident. According to the girls, they got bored and Bernice challenged her
friend, a self-proclaimed “good” driver, to demonstrate her ability.
As for the facts, Ralph, an independent contractor to Speedy, has an auto liability policy with $25,000.
limits for property damage. Bernice’s friend has no driver’s license and thus no coverage under Ralph’s
policy. Her parent’s homeowner’s policy carries $25,000. limits but excludes coverage for motor vehicle
accidents. Damage to two aircraft, hangar and two tugs is an estimated $4,000,000.!
Scenario
3
Beyond the ERP: Enterprise Risk Management
1. What are the short term actions needed?
1. What kind of incident is this?
2. What are the immediate hazards to be dealt with?
3. What do we need/have to do so?
2. Who is affected by this incident?
1. Who needs to know what?
2. Financial vs personal vs political issues?
3. What are the organizational issues that arise?
1. Org chart information pathway vs ERP?
2. Training at each level?
3. Awareness of each participant
4. Top management support
4. What resources are needed to address these issues?
1. Business case prep
2. Internal vs external
3. Retainers vs ad hoc employment
Scenario Analysis
4
Beyond the ERP: Enterprise Risk Management
5. What proactive steps can be taken to address minimize the impact of the incident? ("elevator
speech?
1. Vendor selection and training
2. Contracts?
3. Insurance coverage?
4. ERP drills, feedback, amendments
6. What are some of the variables ("wild cards") that may appear?
1. Injury claims and lawyers?
2. Municipal gov’t
7. How can we prepare for the "wild cards" and mitigate their impact?
1. Drills, feedback, amendments to plans
2. Ask questions, find answers
3. Selection and training
Scenario Analysis continued
5
Beyond the ERP: Enterprise Risk Management
ERP Checklist Scheduling/Dispatch
6
Follow and document the accident verification form
Notify the Director of the Exec Lead Team or alternate if not available
Manifest retrieval of an accurate crew and passenger manifest
Recommend ‘Flight Dept. Stand-down’ procedure based on EOC Director recommendation and also implement crew ‘Call Home’
procedure
Gather FBO name and phone number for departure/arrival FBO’s, check with Arrival FBO, if transportation has arrived, make
sure no information is given to press or other bystanders.
Coordinate with Flight Ops Rep to have Departing FBO fuel truck locked down and obtain a fuel sample
Work with Security to have some at the front door and the Travel Dept.
Support the efforts to relay information to the Family Notification Teams
Support with preparing for travel arrangements for on-site team. Begin exploring areas of possible assistance, such as aid from
charter operations; travel options, to help move our Eyes on the Ground Team, FA team and family members to the location
Collect data to print overhead maps of the accident site and surrounding location, retrieve airfield diagrams, find phone
numbers for key facilities in the accident city (coroner, hospitals where survivors are, local police dept., etc.)
Debrief and document lessons learned
Return to normal operations
ALL Incoming media calls will be routed to the Media Hotline: 8xx-xxx-5555 / 610-xxx-5555
Beyond the ERP: Enterprise Risk Management
7
Total Cost of Incident / Event
Immediate
Impact
First aid to persons
Need to protect aircraft from further damage
Minimize property damage
Required notices
Sequester from press
Stand down?
Protect records
Environmental damage containment
Beyond the ERP: Enterprise Risk Management
8
Total Cost of Incident / Event
Immediate Impact Longer Term Impact
First aid to persons, Need to protect aircraft from further damage, Minimize property damage
Aircraft Physical Damage, Property Damage, Bodily Injury
Required notices Legal Claims
Sequester from press Loss of Business… Damage to reputation / “good will”
Stand down? Lost Productivity (“actions” for defense)
Protect records Lost Equipment
Environmental damage containment Environmental Liability
Loss exceeds insurance / partially insured
Future insurability impacted , in question
Damages, fines, regulatory action
PTSD, Recruitment, Training
Beyond the ERP: Enterprise Risk Management
9
Total Cost of Incident / Event
Immediate Impact Longer Term Impact Who to Inform
First aid, Protect A/C , Minimize property dmg., Required notices, Environ. damage Containment
Aircraft Physical Damage, Property Damage, Bodily Injury; Legal Claims; Environmental Liability
Risk Management, General Counsel Legal, Human Resources/Administration, Operations, Finance, Leadership
Sequester from press Loss of Business… Damage to reputation / “good will”
Operations, Finance, Leadership
Stand down? Lost Productivity (“actions” for defense); PTSD, Recruitment, Training
Human Resources/Administration, Operations, Finance, Leadership
Protect records Lost Equipment Operations, Finance, Leadership
Loss exceeds insurance / partially insured; Future insurability impacted, in question
Risk Management, General Counsel/Legal, Human Resources/Administration, Finance, Leadership
Damages, fines, regulatory action Risk Management, General Counsel/Legal, Operations, Finance, Leadership
Beyond the ERP: Enterprise Risk Management
10
Total Cost of Risk (to Enterprise)
Immediate Impact
Longer Term Impact
Who to Inform Impact to Enterprise / Aviation
First Aid, Protect A/C, Minimize PD, Req. notices, Environ. dmg. containment
A/C Physical Damage, Property Damage, Bodily Injury, Legal Claims, Environ. Liabs
Risk Management, GC/Legal, HR/Admin, Ops, Finance, Leadership
Transportation – Solutions, Outsourcing, Effectiveness; Operational Control
Sequester from media
Loss of Biz… Dmg. to rep. / “good will”
Ops, Finance , Leadership Executive Support and Oversight; Optics; Operational Control; Corporate Strategy
Stand down? Lost Prod. (“acts.” 4 def.); PTSD; Recruit., Training
HR/Admin, Ops, Finance, Leadership
Service Expectations; Talent Pool; Cash Flow; Effectiveness
Protect records Lost Equipment Ops, Finance, Leadership Cash Management; Capital Costs; Required Metrics and Benchmarking
Loss exceeds ins. / part. insured; Future ins.?
RM, GC/Legal, HR/Admin, Finance, Leadership
Safety and Risk Management; Cash Management
Damages, fines, regulatory action
RM, GC/Legal, Ops, Fin, Leadership
Tax Strategy; Regulatory Implications
Aviation Alignment with Corporate Strategy; Value Proposition for Business Aviation
Beyond the ERP: Enterprise Risk Management
• ERP (Flt. Dept.) – ERM (HQ / “Downtown” / Divisions)… Short Term, Long Term Impacts
• Differences?... Differences!
• Understand / Articulate / Communicate…Elevator Speech
Takeaways
11
Beyond the ERP: ERM Thank You – Questions?
PRESENTED BY:
Tim McSwain, Claims Consulting ([email protected] / 973-668-0168)
Andy Mawdsley, Southern California Edison ([email protected] / 909-974-4620)
Brint Smith, John F. Throne & Co. Insurance Marketing, Inc. ([email protected] / 206-622-3636)
Maintenance Management Conference | Tampa, FL | April 23 – 25, 2014
Wednesday, April 23 | 8:35 a.m. – 9:30 a.m.