A tornado hit a service center in Oklahoma in 2022. The building sustained major roof damage. Water flooded the warehouse. The server room was destroyed. The owner had no disaster recovery plan, no off-site data backup, and no business continuity strategy. It took 11 months to resume full operations. Three major accounts, representing $4 million in annual revenue, had found alternative suppliers by month 3 and never came back.
A similar-size service center in Mississippi experienced a fire in their processing area. They had a disaster recovery plan. Their data was backed up to the cloud nightly. They had pre-negotiated agreements with a partner service center 60 miles away to handle customer orders during an emergency. They were shipping from the partner's facility within 72 hours and back in their own (repaired) facility within 4 months. They lost one customer.
What a Disaster Recovery Plan Covers
A disaster recovery plan addresses three scenarios: facility damage (fire, flood, tornado, earthquake), technology failure (server crash, cyberattack, ransomware), and supply chain disruption (mill shutdown, transportation disruption, major customer or supplier failure).
For each scenario, the plan answers four questions: what are we going to do immediately (first 24 hours), how will we continue serving customers (first week to first month), how will we restore normal operations (first month to six months), and what resources do we need to execute this plan?
Data Protection
Your business data (customer records, order history, inventory data, financial records, pricing, vendor information) is irreplaceable. If your server dies and your only backup is on a hard drive in the same building that just flooded, you are starting over from memory.
Implement automated daily backups to a cloud service or off-site location. Test the backups quarterly by actually restoring from them (many companies discover their backups are corrupt only when they try to use them in an emergency). Keep 30 days of backup history so you can restore to a point before the incident, which is especially important for ransomware attacks that may have encrypted your data days before you noticed.
Document your critical systems and the login credentials, contacts, and procedures needed to restore them. Store this documentation outside your facility (a safety deposit box, a trusted advisor's office, or a secure cloud location). The IT knowledge in your system administrator's head is useless if that person is unavailable during the emergency.
Customer Continuity
Your customers need steel whether your warehouse is standing or not. Identify 2 to 3 partner distributors (non-competitors in adjacent markets or complementary product lines) who could fulfill your customer orders on an emergency basis. Discuss this scenario with them in advance and outline the terms: you provide customer relationships and orders, they provide material and fulfillment, you split the margin. Having this agreement in place before you need it saves weeks of negotiation during a crisis.
Maintain a current customer contact list (with phone numbers and email addresses) in a location accessible outside your facility. During a disaster, your first priority after safety is communicating with your top 20 customers. A phone call that says "we had a fire, nobody was hurt, and we are arranging to serve you from our partner's facility starting Monday" retains accounts. Silence for two weeks while you figure things out loses them.
Insurance Review
Review your insurance coverage annually with disaster recovery in mind. Confirm that your business interruption coverage is adequate (it should cover at least 12 months of operating expenses and lost revenue). Verify that your property coverage reflects current replacement costs. Confirm that your cyber insurance covers ransomware, data breach response, and business interruption from a cyber event. The time to discover coverage gaps is during the annual review, not during the claim.
A disaster recovery plan costs a few thousand dollars and a few days to develop. It sits in a binder and hopefully never gets used. But when it is needed, it is the difference between a 3-month recovery and an 11-month recovery, between losing one customer and losing four million dollars in revenue.