ASOS fire

Sep 29, 2014   //   by David   //   Blog, Business Continuity  //  No Comments

ASOS Fire June 2014

On 21/22 June 2014 a fire damaged the 650K square foot Barnsley warehouse of on-line retailer ASOS.  The Barnsley warehouse is critical to ASOS – every product it sells is checked there before being shipped by air, land or sea to be delivered.  About 70% of all stock is held at the site.

The firm posted a message on their website stating they had to take the site down due to the fire. No access of any type was available on-line at that time and there was no suggestion of when further information would be available. The website remained closed until early on Monday morning although the fire had no effect on any of the firm’s technology.

Approximately 20% of stock was damaged by the fire or by water from suppression systems. Estimates of loss of sales are around £30M.

The company were forced to have an immediate sale to attract customers back.

ASOS had been involved in a major incident in the past (the Bunsfield explosion) so did appear to have a plan to manage the incident

Lessons Learnt

The two key message from the incident were firstly that ASOS had all their eggs in one basket.  As everything outgoing had to pass through the warehouse they were unable to continue any of their operations while it was out of commission even though much of their back office operation was undamaged. Services such as Returns were actually unaffected (this was in a separate building) but this could only be discovered by posting a query on Facebook.

Secondly ASOS did not handle customer service well initially.  They closed their website completely, therefore customers who had orders which had been dispatched could not check on progress and those with ongoing queries also lost access.  Thus all customers were inconvenienced rather than only those who had orders not yet dispatched.

What should have happened?

Firstly ASOS greatly increased the risk of any incident seriously damaging their business by funneling all outgoing activities through a single building. This approach was very cost effective but was clearly a single point of failure.  In the end they were lucky that the fire did not cause greater damage. Separate buildings or sites would have greatly reduced the risk.

Their website should have been partitioned to allow new sales to be suspended while leaving all other functions running.

The communications surrounding the incident should have been more positive.  Although there was clearly damage, and delays would inevitably occur, the initial message could be interpreted that the business had failed (there were a number of posts to this effect on social media).

But we shouldn’t be too critical!

The fact that operations were running 48 hours later suggests that ASOS managed the incident very well indeed. The points above may be true with hindsight, but would many organisations have managed so well? Unlikely…..