This is the first of a multi-part series on factory fire risk in the supply chain. In these articles, we will examine the causes, costs (dollars and human), consequences and potential mitigation and response strategies when a fire impacts a node of the global supply network.
Between May 15 and May 31, Resilinc issued 40 EventWatch Alerts on fires that affected the global supply chain. In 2015-16, factory fires and explosions are the most frequent source of potential disruption in Resilinc’s network. Also, the fact that factory fires are often local versus regional events means that occurrence is typically harder to detect due to the availability of fewer news sources. These two factors make fire risk a unique challenge in supply chain risk management, and the first step in preventing a disruption from a fire at a supplier is understanding the risk.
Fires require heat, fuel and oxygen, all three of which can be found in abundance in a manufacturing environment. The most infamous, of course, was the Triangle Shirtwaist Co., fire in 1911, when 145 women—mostly teenage immigrants—died. The building had no sprinklers and only one operating elevator, which broke down after four trips. The fire began in a rag bin on the eighth floor. A manager tried to put it out, but the hose was rotted and its valve rusted shut. It took 18 minutes. Workers on the floor, in stairwells (the street-level door was locked), in the elevator shaft or from jumping (56 died).
Thankfully we don’t have those conditions anymore—at least in most Western countries—but Bangladesh, for example, has seen its share of tragedy, with major blazes in 2010, 2012 and 2016, killing more than 160 people and injuring at least 300 in apparel factory fires.
Fire at Tampaco Foils factory, Bangladesh, 2016
In the U.S., the National Fire Protection Association (NFPA), says fire departments respond to an average of 37,000 fires at industrial or manufacturing properties each year, with annual losses from these fires estimated at 18 civilian deaths, 279 civilian injures, and $1 billion in direct property damage. Direct property damage, of course, doesn’t account for losses occurred while production is shut down—which could be millions of dollars a day for the business and potentially its downstream partners.
Experts generally say there are five major causes for industrial fires—combustible dust, hot work, flammable liquids and gases, electrical, and equipment and machinery.
- Combustible Dust. Paper mills and producers of other wood based products (e.g. pallets and packaging) are obvious culprits for producing huge quantities of dust, metal dust as a result of polishing activities has been the cause for a number of factory fires and explosions in recent years. In Morristown, Tenn., aluminum dust caught fire just outside of the Kawasaki plant that manufacturers die-cast automotive parts. The fire started at a large clogged funnel outside the plant that’s an end point of the ventilation and filtration system. Firefighters used a pike to loosen the super-heated metal dust, which ignited as soon as it was exposed to oxygen; the near-molten metal burned a hole approximately 4 feet in diameter in the ground. Production at the plant was shut down until the next morning. One must consider second-order impacts of fires and explosions as well. In 2014, the local government in and around Kunshan, China shut down all die-cast manufacturers for safety inspections as a result of a dust-caused explosion at a GM supplier in the area.
- Hot work. OSHA says “workers performing hot work such as welding, cutting, brazing, soldering, and grinding are exposed to the risk of fires from ignition of flammable or combustible materials in the space, and from leaks of flammable gas into the space, from hot work equipment.” Common sense would say to keep such tools as far from combustible materials as possible, yet NFPA statistics say 45 percent of non-home structure fires are caused by cutting or welding too close to combustibles and 23 percent from a heat source too close to combustibles.
- Flammable liquids and gases. In 2015 it took 130 firefighters several hours to contain a 12-alarm fire at an oil recycling plant in Sydney, Australia. A stack of 1,000-liter (264-gallon) hardened plastic intermediate bulk containers melted, releasing methanol and cooking oil, a volatile combination that ignited when they came in contact with the oxygen in the air. Heat—the third element of the fire triangle—was created. The fire spread inside the factory, setting off numerous 200-liter (52.8 gallon) drums of methanol that blew off the factory roof, sending smoke more than half a mile into the sky.
- Electrical. Overlooking things like loose wires, overloaded plugs or old, neglected equipment can be devastating. A spark from a bad plug in a storage area can set off paper or other flammables stored there and spread quickly.
- Equipment and machinery. It doesn’t have to be a complex machine with multiple parts to cause fire. William Fries, a former director at Liberty Mutual Group, told the following to EHSToday:
“An electric eraser used by drafters at one company was stored in such a way that the nose of the eraser pressed against the side of the drawer. The contact caused the eraser to switch on and vibrate. The constant friction caused the eraser to overheat and start a fire which spread throughout the room, fueled by the stacks of papers and plans used by the drafters.”
Based on the above examples, no manufacturing operation is immune from the risk of fire, but sites or production processes that have a higher number of the attributes above require extra scrutiny. Risk managers should consider performing one of more of the below activities to better assess their supply chain’s fire risk exposure:
- Perform a category fire risk audit. Work with your process/quality engineering teams to understand which types of products your company purchases generate large amounts of dust (e.g. die casting), require hot work (e.g. welding) and/or require flammable liquids and gases (e.g. printed circuit boards) in their production processes. Use the data to refine your category risk profiles and mitigation action plans regarding fire risk.
- Assess high risk supplier sites’ business continuity risk. Use Resilinc’s Continuity module or a similar assessment to understand how suppliers conform to ISO 22301 or similar business continuity standard. Those suppliers that follow business continuity best practices should be both less likely to experience a fire and faster to recover should a fire occur.
- Leverage your (or your suppliers’) property insurers. Some insurers will offer their engineering teams to assess the fire prevention infrastructure (e.g. sprinkler systems, water supplies, hot work permit processes) of a site and will provide insights to gaps.
- Engage internal sustainability or environmental health and safety (EHS) teams in the process. Most supplier codes of conduct have fire prevention and safety considerations included to assure the safety of worker and most companies with manufacturing operations will have EHS standards they are required to meet. Leverage both the other functions policies and their subject matter expertise for different points of view and additional leverage when it comes time to engage the suppliers on corrective actions.