For Jane Dwyer, Knoll senior director of strategic projects and business risk management, watching TV often complements her work.
Invariably she finds herself scanning the background, looking for Knoll's iconic designs. "Look, there’s one of ours," she often announces to her family.
It's an occupational pride at a company that has been creating inspiring interiors for businesses and residences for more than 80 years. If you look closely, Knoll furniture can be spotted on TV sets, in movies and throughout the offices and in the boardrooms of Fortune 100 companies.
For Knoll, reputation is everything. Customers expect timelessness, quality materials and on-time performance.
A few years ago, Knoll manufacturing got a taste of what a business interruption could do to that reputation. A fire at one of its facilities in Canada pushed risk improvement to the forefront of the company. The interruption put the overall resilience of its manufacturing infrastructure under the microscope. It also has led Knoll to take advantage of just about every service FM Global has to offer in its quest for continuous improvement.
"Our focus has always been on continuously improving our service performance and it was really a matter of aligning our risk management philosophy with our strategic objective," says Dwyer. "A single delay in one of our manufacturing sites can jeopardize our ability to deliver an order on time and we just can't afford that. So, we started being proactive, so we could prevent any disruption from occurring."
Don't get burned twice
The alignment of the risk management philosophy and strategic objectives began soon after a dust fire at Knoll’s wood production facility in Toronto, Ontario, Canada. The risk mitigation systems did their job, and the fire was contained to the dust collection area outside the main facility. But the fire raised concerns among Knoll’s senior management.
"Any manufacturer that is making wood products is going to have a dust exposure and the systems in place worked exactly as they were designed," says FM Global's Jon Gutkind, Knoll account engineer. "But Knoll came to us and said they never wanted to have a dust loss again. So, we brought in a dust specialist, did some testing and made some recommendations on how to mitigate the risk. That's when they really started focusing on risk improvement."
Although the fire was contained, it was still a few weeks before the facility was back at full capacity. The water used to put out the fire backed up into the duct system and forced some crucial pieces of equipment off line.
That business interruption, although brief, highlighted the impact that even a small disruption could have on Knoll's overall business. Knoll's senior management made a commitment to improve its resiliency across the entire organization.
"Our risk profile has improved by an entire quartile."Kenson Silverthorne, vice president of environmental, health and safety, Knoll
Moving the needle
"Our risk profile has improved by an entire quartile," explains Kenson Silverthorne, Knoll's vice president of environmental, health and safety. "It's because we really started paying attention to our risks and looking at what we could do to drive those risks down."
Silverthorne adds that the risk improvements have all been done without expanding Knoll’s risk management team.
"We were able to reduce risk without adding headcount," he says, "because we started using all of the FM Global resources available to us."
Knoll has always benefited from FM Global's engineering visits, its recommendations and its fire protection expertise. But with the company's renewed focus on risk improvement, Knoll wanted more. It began to look at outside vendors to supplement its efforts. Knoll soon realized that it didn't need to go any further than its own property insurer.
"When they decided they wanted to bolster their risk management program, they reached out to us and asked what we had to offer," says FM Global's Fred Taber, senior account manager. "We sat down with them for a whole day and talked about all the added value services we have at no additional cost."
All FM Global has to offer
Knoll now uses more than 70 FM Global resources and services. On the engineering side alone, FM Global provides Knoll with:
- Due diligence/pre-acquisition visits
- Project management services
- Project planning (design specifications, site surveys, onsite visits, acceptance testing)
- Plan review
- Impairment services
- Site risk analysis
- Location-based engineering
- Risk service testing (ignitable liquids, dust and plastic components testing)
- Quarterly engineering updates
Other services include online and onsite training, analytics tools, pre-loss planning and cyber risk assessments. FM Global is now an integral part of the Knoll risk management team, helping Knoll understand the overall risk at each of its manufacturing locations. FM Global also helps deliver compelling information to Knoll's board of directors in support of capital improvements.
"FM Global has been a fantastic partner."Charles Rayfield, senior vice president, CFO
"FM Global has been a fantastic partner," says Knoll's Charles Rayfield, senior vice president, chief financial officer. "We really hadn't spent enough time on risk management and our goal was to minimize the risk to our business as much as possible. The people at FM Global have been right there with us to lead us in the right direction."
Learning your ABCs with a BIA
For Knoll, one of the most valuable of those services came from FM Global's Business Risk Consulting group. The group's Business Impact Analysis (BIA) uses business modeling and financial analysis to understand and quantify risk. This helps companies like Knoll develop resilience and business continuity strategies. It also helps companies prioritize capital expenditures and actions for mitigating and surviving a business interruption.
"The analysis showed us where the critical risks were, not just financially, but the impact a business interruption would have on the whole business," Dwyer says. “It was quite compelling and helped us provide direction on budget priorities and engaging senior management."
The Knoll BIA revealed that a substantial portion of Knoll's revenue was tied to the Knoll Office business segment. A disruption at any of the facilities producing office furniture could greatly impact Knoll's client relationships.
"If any one component was unavailable, it would impact our customers," Dwyer continues. "You can't do a boardroom installation without the table. Knoll Office is 60 percent of our business. Knowing the interdependencies helps quantify our exposure and justify our long-term risk mitigation investments."
The BIA also identified additional risks in Knoll's supply base. The BIA identified supply chains that are at risk and suggested supplier management strategies to mitigate the risk.
Not just "the sprinkler guys"
Knoll has also shifted to "Centers of Excellence" for its wood processing and metal fabrication, concentrating production at one location. The Centers of Excellence model helps drive efficiencies and quality, allowing for focused investment in equipment and training. But it also changes the risk characteristics of the entire organization.
"We've moved to a Centers of Excellence model over the last six years, but doing so reduces redundancies in our factories," says Eric Crouthamel, Knoll's vice president of manufacturing, East Greenville, Pennsylvania, USA. "So, it's very important that we have a process in place to understand and mitigate those risks."
And Knoll's risks are constantly changing. Each year, there are new trends and new designs. Knoll is always introducing new fabrics, new manufacturing processes, new techniques and new hazards.
"We are constantly working with FM Global to understand what's going to change and what controls we have in place to mitigate any new risks, "Silverthorne says. "We might have to review our flammable storage or increase the number of sprinklers. It's all part of our review process."
"It’s so much more than sprinklers."Kenson Silverthorne, vice president of environmental, health and safety, Knoll
"Everyone here used to call the FM Global engineers 'the sprinkler guys,'" Silverthorne adds. "Today we work together to understand what the most effective way is to mitigate risk. It might be sprinklers, or flue spacing in the racks, or increased inspections or more frequent cleaning of the machinery. It's so much more than sprinklers."
Learn more about some of the FM Global services that help keep Knoll "sitting pretty."