Very recently, I heard John Catsimatidis, owner, president, chairman and CEO of Gristedes Foods, say on a news show that someone needs to look into the spate of fires occurring at food manufacturing plants around the U.S. When I looked this subject up on the internet, I found a lot of news and speculation. The news from organizations such as Reuters and the National Fire Prevention Association (NFPA) cited statistics about fires that led them to the conclusion that the number of recent fires was not above the norm; in other words, there was nothing suspicious about them. However, there was also general speculation by other sources that there was something suspicious going on and that nefarious actors might be behind the fires.
Because the NFPA doesn’t specifically track fires at food-processing plants alone, but rather fires at agricultural, grain and livestock and refrigerated storage facilities, which could all include food processing operations, the use of these statistics to benchmark food processing plants does not seem satisfactory. And if the number of fires was not out of the norm, then why is there so much attention being placed on them now? But I will leave the numbers and probability plotting to actuaries.
With over 20 fires at food manufacturing plants or food distribution centers by mid-year, the question becomes one about how well these plants are managing their risks. Fire risk can stem from a variety of causes or hazards. The categories of causes include: 1) poor housekeeping, 2) dangerous/flawed processes, 3) equipment failure, 4) natural catastrophes and 5) human error or malfeasance.
The role of enterprise risk management is to bring together the disparate functions in an organization to identify risks and mitigate them regardless of root cause. An “all enterprise” solution is needed to manage risks because many root causes have root causes themselves.
Consider a food processor that stores certain preservatives in refrigerated areas and away from operational activity, but when the refrigerated areas become full puts some of this material into a non-refrigerated area temporarily. The preservatives are highly combustible. The non-refrigerated area is subject to high temperatures, overcrowded conditions and high equipment traffic. A small spark sets off from the equipment and alights on the preservatives, starting a fire.
The root cause of the fire is that these highly combustible preservatives should have been refrigerated and somewhat isolated but were not. Yet, what about the root cause of the root cause? The procurement department wanted to take advantage of good pricing and decided to increase the amount of preservatives it usually ordered without checking to see if warehousing could accommodate the bigger order appropriately.
This example points to why a holistic approach to risk management is so necessary. Spontaneous combustion would be a high risk area for the company and should have detailed mitigation strategies in place, one of which should be joint planning and communication between procurement and warehousing.
See also: Top 2022 Global Business Risks
This scenario is not taken from any of the recent fires. Rather, it is meant to highlight the need for an enterprise approach to risk management. In determining a mitigation strategy, both engineered solutions and human behavior solutions need to be invoked.
Engineered solutions include such things as: 1) sprinkler systems, 2 fire retardant building and storage materials, 3) site lay-out and 4) combustible materials handling protocol. Human behavior solutions include such things as: 1) management commitment to enterprise risk management, 2) worker training, 3) strong performance management by supervisory staff through daily observance, periodic inspections or audits and 4) recognition for excellent safety records.
The protection of our food supply at every stage in the value chain is vital to the strength and security of our nation and our people. Therefore, food manufacturing needs the most robust ERM practices feasible.
