New Pig Nearly Burned by Fire

Feb 01, 2003 10:30 PM  By

When a fire destroyed one of New Pig’s three buildings on its Tipton, PA, campus this past Halloween, the manufacturer/marketer of industrial cleanup supplies lost its main warehouse, along with all the inventory stored there, and its call center. But the cataloger didn’t lose any workers — or its sense of humor. Indeed, within days of the fire, service reps were telling customers that New Pig had suffered a “pig roast.”

All told, the loss from the fire will probably be $6 million-$8 million, according to New Pig president Nino Vella. But Vella estimates that the roughly $100 million company lost just $8,000 in sales, thanks largely to the diligence of the staff.

The fire, cause still unknown, began at approximately 10 p.m. Fortunately, New Pig’s phone lines are closed from 8 p.m. to 7 a.m., so no one was in the call center when it went up in flames. Workers in the distribution center portion of the building escaped unharmed.

In another stroke of luck, the building that houses New Pig’s main computers and servers was not affected. New Pig does not have off-site servers, notes Jerry Shetler, the company’s director of information services, “and the loss of the servers would have taken much longer to recover from.”

Shetler and the IS team turned one of the conference rooms in an unharmed building into a temporary call center just hours after the fire began. They took phones and computers out of offices and rewired a main cable that had run through the burned building. Several days later they ordered replacement phones and computers.

When the customer service reps came to work the morning of Nov. 1, they began phoning customers with unfulfilled orders to explain why deliveries would be delayed.

Saving the orders

New Pig does have auxiliary warehouses in Reno, NV, and Duncansville, PA, which house approximately 30% of its inventory. The company used that merchandise to fulfill orders and, when necessary, bought and shipped items from competitors.

“Our goal was to not lose an order if there was anything we could do to save it,” says customer service manager Kitty Dertinger. She notes that chairman Ben Stapelfeld even gave up his own “sporksball” (a foam football emblazoned with New Pig logo) to a customer.

About 20% of New Pig’s 5,400 SKUs are manufactured inhouse, according to materials manager Charlie O’Rourke. The rest are merchandised from approximately 400 vendors. O’Rourke assigned a team of 13 employees from product development, purchasing, and inventory control lists of suppliers with which to place orders, starting with key vendors first. Most vendors were accommodating, extending discounts and terms and sometimes expediting shipments at no charge.

On the manufacturing side, “we had a handful of raw materials, and we knew we had to work fast to get more in and ramp up,” O’Rourke explains. New Pig’s inventory forecasting system enabled his team to assess what they would need for the coming two weeks based on current orders and historical trends. According to O’Rourke, most of the inventory was restocked within six working days.

At the first meeting of all the departments, plant manager Scott Diminick told Vella that it would take 14 days of working 24/7 to replenish all the inventory lost in the fire. Diminick was wrong; the team managed to restore inventory to prefire levels in just 12 days.

“I knew exactly how much I could make in a week and I maximized it as much as possible,” Diminick says. “But I wasn’t all that surprised that we exceeded our productivity goal, since we had set productivity records three times in 2002.” Many salespeople and executives offered to pitch in; Diminick put volunteers to work packaging and labeling, saving all the trained workers to operate the machines.

But while the company did rack up 4,600 overtime hours (2,600 from outside temps), Diminick would not schedule workers for shifts that were longer than eight hours. “If workers were willing to put in overtime, I had them work six- and seven-day weeks rather than five [longer days] as I could not afford to have anyone fatigued,” he explains.

With stock coming in from vendors and coming off the manufacturing line, the next challenge was finding a place to store the products. A local company, Ward Trucking, offered to empty out warehouse space a few miles away and lease the space to New Pig. The cataloger started moving into the facility less than 48 hours after the fire, says Tony Deely, New Pig’s director of distribution. Deely needed all manner of equipment, from forklifts and shelving to file folders and photocopiers. He assigned team members multiple items to source.

Deely says that New Pig was moving 12-18 tractor-trailer loads of product into the warehouse each day. As expected, he says, “we are not as fast as we were in Tipton, but since Nov. 20 we have been maintaining normal shipping standards.” Orders received in the morning are shipped out to customers the same day; all other orders are out by the next business day.

The fire that decimated one-third of the New Pig campus did not destroy the business by any means. Still, chairman Stapelfeld admits that while the rurally based company had contingency plans for power outages, “the fire forced us to look at all of the facets of our business and develop a contingency plan for all areas of the business.”