When business is interrupted, the pursuit of profitability becomes a little steeper. Eastman pledged years ago to stay clear of uphill battles. The specialty chemical company, with more than 50 global locations around the world, has always hoped to learn those lessons from others rather than firsthand. "As we consider what FM Global is about in terms of risk reduction, protecting people, protecting the environment, protecting property, it is beautifully aligned with our top priorities," says Mark Cox, Eastman senior vice president, chief manufacturing, supply chain, and engineering officer.
That bond represents quantifiable competitive advantages for Eastman. "Our relationship with FM Global produces value in a variety of ways," says Cox. "Most importantly, it has reduced the frequency and intensity of undesirable business interruption events and, therefore, improved our bottom line."
Eastman's reliability is indeed impressive and it has helped the company stay ahead of its competitors. "I say this humbly," adds Cox, "because it's hard-earned and easily lost. There are systems and cultural elements we've had in place for a long time that allow us to remain reliable, and they happen to be consistent with FM Global's objectives as well."
"When we have a boiler down, we have regulatory and permit requirements. We rely on FM Global to get us back online quickly."Peter Roueche, director, enterprise risk and insurance, Eastman
Peter Roueche is Eastman's director of enterprise risk and insurance. "When you think about a chemical plant, one of the first things to look at is housekeeping, the reliability record," he says. "Those are highly correlated with safety and environmental stewardship. It's a matter of running a tight ship. The mindset that goes with protecting property well is consistent with doing the right things the right way."
In 2016, Eastman and FM Global celebrated 50 years of partnership. The relationship has had the luxury of incorporating a variety of worthwhile practices over the years—including policy workshops, customized research and testing, and product innovation. "Our confidence in our ability to innovate is increased by virtue of this relationship," says Cox. "We know we will have a strong partner in risk management during the innovation phases of new product development."
Also worth mentioning is that Eastman maintains arguably the largest, vertically integrated, single-owner chemical facility in the United States (in Kingsport, Tennessee). Not surprisingly, the location requires substantial insurance protection, and places intense demand on FM Global's engineering capabilities.
"Another value that FM Global's engineers bring to the table is boiler and machinery expertise," says Roueche. "When we have a boiler down, we have regulatory and permit requirements. We rely on FM Global to help us get back online quickly. So if there's a plant outage or a boiler needs upgrading or an inspection, FM Global's engineer is there to see to it immediately, so we don't have to wait days to get back up and running. This kind of service provides us with another strategic advantage."
"Our confidence in our ability to innovate is increased by virtue of this relationship."Mark Cox, senior vice president, chief manufacturing, supply chain, and engineering officer, Eastman
Eastman is also keen on taking advantage of FM Global's mutuality, by aggregating the risk insight and wisdom of companies in that mutual group and using that knowledge as a competitive advantage. "Over time," says Cox, "we should certainly improve in terms of how we manage our risk, and hopefully see a membership credit or premium benefit."
Overall, the risk management team at Eastman agrees that it's the partnership, the alliance, which brings all of these pluses together—and unlocks an array of competitive advantages. The mutual relationship and unparalleled attention to detail help elite companies move forward with confidence, innovate with determination and stay at the top of their respective markets.