The plant manager and crew of Rawlings' only wooden baseball bat factory face a property loss prevention test from the engineers of Allianz.
Originally in Risk & Insurance®, Nov. 1, 2010. Reprinted by permission.
By MATTHEW BRODSKY, senior editor/Web editor of Risk & Insurance®
On site loss prevention assessment
DOLGEVILLE, N.Y.---It wouldn't make the cut for the "Ultimate Factories" TV show. No, instead, the Rawlings baseball bat manufacturing plant in Dolgeville, N.Y., matches its surroundings. We're talking the land of the once-were towns of the Erie Canal and farming communities that maybe never were, unless you lived there. Beautiful winding countryside dotted with flaking barns and one-road settlements.
The nearest attractions: the Baseball Hall of Fame in Cooperstown, Adirondack Park to the northeast and Dinosaur Bar-B-Que out west in Syracuse.
From the street, the baseball bat factory gives the impression that it's vacant. And if it isn't, with its 1940s cinder-block exterior and claptrap-looking mill, it couldn't be a safe home of modern machinery and an able-bodied workforce, could it?
Yet this 40,000-square-foot Rawlings facility employs 46 workers and has a replacement value of $13.4 million. More importantly, it represents the one Rawlings site that produces wooden baseball bats, some of which are specially made for players in the minors and, yes, the big leagues. Rawlings' parent company is now Jarden Corp., and Jarden's lead carrier on its multibillion-dollar property program is Allianz.
Allianz was sending in a team of engineers from Allianz Risk Consultants to do a property loss prevention survey to answer that very same question and perhaps others.
On Aug. 17, Tim Whalen, senior account engineer with Allianz, drove over to Dolgeville from his base camp in Wallingford, Conn. This was the first Rawlings facility that Allianz was visiting for the Jarden account.
"We hit anything and everything," Whalen told Risk & Insurance® during a previsit prep session.
He was already thinking of things that might stand out in the survey. There's business interruption, though with a location on the edge of the Adirondacks, source material shouldn't be so big of an issue. The sawdust hazard could be the biggie.
"It's baseball bats," he said.
Fire protection was how Whalen got into the business. He was a volunteer firefighter and a fire program major in college and got into the engineer side of it to please his parents. (Whether or not he was kidding about that, you'll have to ask him.) This training led to his first insurance gig out of school, with Factory Mutual.
Getting out of his car in Dolgeville, the first face he saw was a friendly one. Hank Omerhodzic, senior consulting engineer with Allianz Risk Consultants, the pro brought in to do the survey on the Rawlings plant.
As far as the reaction the two engineers would get from the Rawlings locals, it was anyone's guess. Whalen and Omerhodzic could be looking at a mob of know-it-alls who might resent a couple of insurance outsiders telling them how to run their operation.
Maybe lingering resentment over the Jarden acquisition in 2005--or that a proud plant that once employed 300 people now runs with 46 in a former industry town with only three manufacturers left--could spill over. Perhaps angry employees would chase them off with, what else, baseball bats.
The Rawlings people at least had fair warning of the visit. In a letter to plant manager Ron Vandergroef confirming the appointment, Omerhodzic listed all of the things he and Whalen hoped to accomplish in Dolgeville, as well as information he hoped the Rawlings plant manager would have available on Aug. 17.
"I certainly appreciate the time and assistance that will be offered during my visit," Omerhodzic wrote.
Together now on-site, the two Allianz engineers went to find Vandergroef. After an uneventful search through the halls of the Rawlings office, decorated only with baseball bats and baseball posters, and a polite wait outside of the manager's office, Vandergroef appeared. He wore the jeans and plaid, button-down, short-sleeve shirt of a practical-minded and hands-on manager. He offered his hand, sans bat, and the meeting commenced.
It began in a conference room not unlike conference rooms everywhere, except for the spare baseball bats lying and resting against floors and walls, leaning in corners and tables, and hanging from walls in commemorative racks. The Mark McGwire of his playing days was there, too, on the wall in a poster advertising his affection for his Rawlings weapon of choice.
Omerhodzic started the meeting with a summary of the day's upcoming events, how he and Whalen hoped to get an idea for the construction and occupancy of the facility, for any special hazards that might exist and protections in place to mitigate them, and how they would next test fire protection equipment and then get a sense for how the plant actually operated by touring it.
"Sometimes it's overwhelming," he told Vandergroef and Shane Morrill, the plant manager's get-it-done guy whose Rawlings T-shirt and jeans were already dirty with whatever he was getting done that morning.
Overwhelming already perhaps? You wouldn't say that the Rawlings men's reactions were unfriendly or negative, not at all. But you might say that, in the way they quietly listened, the cautious way they nodded and replied, perhaps the meeting was in the very least infringing upon their already undermanned Tuesday to-do list.
Again, not to say they were uncooperative in the least. Morrill handed over plant drawings produced by a former insurer. He shared the number of employees, their shift schedule, the size of the plant, the 400,000 bats that the factory could produce in a year, all wood, 90 percent white ash, 10 percent maple.
Vandergroef offered details about wood suppliers, which Whalen had wondered about earlier. The Rawlings plant had more than 100, a majority in New York but some in Pennsylvania.
"Our raw materials help us stay here," Morrill said, affirming Whalen's suspicion.
There is the dreaded ash beetle, causing quarantines in Penn's woods. But Vandergroef figured that Rawlings' supply was safe for the foreseeable future.
One team to manage risks
Then came a steady beat of questions from Omerhodzic, followed by stanzas of answers from Vandergroef and Morrill, about everything from the date of construction of the sawmill to the size of the logs they use, how they reuse scrap and refuse, to the types and values of their machinery.
Then what else? How things work from the spark arrestors in the dust-collecting machines to the alarm service, from the kiln to the raw material stock on-site, from the finishing process to the plant's heating, water and power systems.
Overwhelming now, yes, indeed. But the Rawlings staff stuck with it. You could say that they turned the corner, began to see the Allianz engineers as batting coaches, so to speak, instead of scouts from a competing team.
It was becoming an illustration of how loss prevention and risk management, when done right, are done through cooperation on the local level.
At first the change was apparent in the way the Rawlings plant employees acknowledged some of the challenges they faced.
"Most of the people who knew how to do that stuff retired or they left," Morrill confided when asked about one particular test.
Or how about the plant's safety committee? Meetings used to happen but recently petered out. Plans were in the works to re-establish a monthly committee meeting and area safety supervisors.
"That's the plan anyway," Vandergroef said.
The Allianz engineers responded with reassurances. Where requests for help were intimated--like we said, the corner was just being turned here--Whalen and Omerhodzic offered assistance, whether that was help to find a sprinkler service company or to understand the hot work permit program (meant to reduce the risks associated with using heat or open flame).
"We'll get you there today," Whalen told them.
Then, when the initial meeting was over and it was time for actual loss prevention testing, the mood shifted further yet. You got the sense that everyone was playing for the same team. Dare we say, a team that comes to win instead of a franchise that just putters along and makes you wonder how they still exist, like playing for the Philadelphia Phillies versus the Pittsburgh Pirates.
Perhaps we're making too much of this "shift in mood."
But take Morrill, who said he was in charge of maintenance, continuous improvements, environmental issues and "anything else." He appeared to see this as his chance to get answers to questions that have bothered him. You could tell because he was asking a heck of a lot of questions and listening to the responses.
Before Jarden bought Rawlings, Morrill said, it felt like being on "an island by yourself."
Now at his disposal he had engineering resources from one of the world's top commercial property insurance companies--Whalen with his big-account and fire engineering background and Omerhodzic with his quarter-century of industrial loss prevention experience--care of a parent company with an inclusive and interested risk management department. And he was taking advantage.
"They are asking all the right questions. They want to learn," Whalen said aside about Vandergroef and Morrill.
Nothing to overlook with loss prevention
The positive attitude to the loss prevention survey was sweet not only for the Rawlings staff but boded well for corporate risk management and for Allianz, with their eyes on the macro view of Jarden's property portfolio
"These are the ones that trip you up," Whalen told Risk & Insurance®, as your wide-eyed writer accompanied him on the loss prevention survey. He was referring to smaller plants that are supplying everything for one product. In this case, wooden bats for everyone from little leagues to the Big Show. For some accounts (and for good reasons), attention is devoted to the $600 million plants, the "big monster operations," while smaller plants like this one in Dolgeville slip through the cracks.
"You can't just forget about those lesser-value locations," Whalen said.
(To see what Jardin's corporate risk manager, Karl Miller, thinks of the Rawlings loss prevention survey and other on-the-ground Allianz inspections like it, see our complementary article online at Riskandinsurance.com.)
And as Omerhodzic said, you never can know what you'll find in these old plants. A "sweat shop" on the top floor of the plant that now serves as a storage room for "crap" but in its heyday saw 100 employees working on "top secret" projects like stringing baseballs. Sprinkler heads patented in 1929. The sawmill with no sprinklers at all.
"Anybody ever ask you to sprinkler it?" Omerhodzic asked.
"No, but you're thinking of it, aren't you?" Vandergroef replied.
Humor, yes. Magic too. We're not talking rivers of chocolate, oompa-loompas or any other Willy Wonka factory magic. But the magic of wooden baseball bats being carved out of 14-foot-long, 22-inch-thick logs. Trees being baked in ovens for a month like artisan loaves. Sawdust falling from the sky like snow on a sunny day. Employees getting to take home as much firewood as they'd like as a perk.
Don't worry. We won't bore you with all nine innings of the Allianz engineers' tour of the facility. Even though it was pretty darn cool when the Rawlings guys took the Allianz engineers along each step in the bat-making process.
Cool if you're a fan of the sport, but also cool from an insurance and risk management perspective. It was an opportunity to get a sense for how property insurance and loss prevention isn't just about mitigating fires, accidents and other hits, but also about how businesses operate can affect how they are interrupted.
Take the sawmill. The massive and loud splitter and other machines of creative destruction and the two workers who operate them represent the first step to whittling logs into sticks, and Whalen and Omerhodzic knew to ask what would happen in the daily scheme of things if the mill went quiet because of, say, a blown motor.
Or the three kilns? What would happen if just one of them went down? Or if they lost the gas boiler that powered two of them?
And then the warehouse where they keep the chopped and baked blocks of wood, which when needed would be taken to the lathes and sculpted into bats? What if that went up in flames like, well, a warehouse full of wood?
Or the specs that program the lathe to carve the wood to the exact tastes of Joe Mauer, Chipper Jones, David Ortiz, Magglio Ordonez, Orlando Cabrera, Jim Thome and other big leaguers who prefer Rawlings bats? Are they backed up?
"Basically, the place looks pretty good," Omerhodzic told the Rawlings men after the tour, when they were back in the conference room decorated by baseball bats.
"We have critical eyes," he added though.
Then he began to review all that those eyes picked up on during the tour. It's in Allianz's interests to make sure that the plant has optimal protection, and the insurance company will make recommendations to ensure that.
Like a batter stepping out of the box in the middle of an at-bat, Vandergroef raised a concern. Sure, they would like to build a relationship with the insurer, but the day was a lot to take in, a "whirlwind."
Omerhodzic allayed any anxiety. Everything they talked about today, and the recommendations that Omerhodzic was outlining now, would be included in a report that the Allianz engineers would produce and send to Rawlings and to corporate risk at Jarden. And if Vandergroef or Morrill still had questions, there was always the phone.
"Call us up. Ask the question. We'll answer it," Whalen said.
Integrating the Rawlings Loss-Prevention Survey Into Corporate Risk Management. Jarden's risk manager shares how he handles the insight and recommendations provided by property insurer Allianz in its loss-prevention survey.
The Rawlings wooden baseball bat factory in Dolgeville, N.Y., is but one facility owned and operated by parent company Jarden Corp. Jarden is a niche consumer products manufacturer based in Rye, N.Y., but with 20,000 employees the world over. Some of its more familiar brands now include Mr. Coffee, Sunbeam, Coleman, and Bicycle and Bee playing cards and chips, to name a few.
So, for a growing company with multifaceted risks, what's the big deal with one loss-prevention survey about one small plant in Upstate New York?
Well, as we saw in our article in the November issue about that loss-prevention survey, "Hitting Loss Prevention out Of the Park," sometimes loss prevention at these smaller-value facilities can be nearly as important as the attention paid to multimillion-dollar properties.
Don't think Karl Miller, director of corporate risk at Jarden, doesn't know it.
In fact, he told Risk & Insurance® that all of the loss-prevention surveys done for Jarden by its principal property insurer, Allianz, are "very important" because of their expert assessments and concrete recommendations.
When the report comes in from the Allianz engineers, Miller explained, his internal team looks at it and also solicits commentary from Jarden's broker at Marsh. Then they forward the report to the individual facility, as well as a form for the facility managers to use to provide feedback and progress reports.
The facility has 30 to 60 days to fix any problem determined to have a human element. Minor mechanical repairs are allotted 90 days to get corrected, unless there are extenuating circumstances, said Miller. The more expensive fixes--say, a wholesale sprinkler system installation--get considered at the enterprise level. According to Miller, Jarden has completed some of these very large projects within the last few years around the world. Most have been sprinkler installations, he said, and infrequently they've seen recommendations for earthquake retrofitting.
Whatever the suggested fix, Miller's office monitors the progress, and every month sends out a report to senior corporate management, the broker and the insurers. The report updates the status of the recommendations from the loss-prevention survey. In particular, the process has buy-in and support from the corporate leadership.
"It gets substantial visibility throughout the organization," Miller said.
As for how the Rawlings plant and other facilities get the nod to have the loss-prevention survey in the first place, Miller said that it's a collaborative effort between Jarden, its broker and Allianz, which occurs at the start of the policy year. Allianz comes up with the initial list of facilities to send engineers to, and Jarden ultimately agrees or suggests others.
"We do arrange to have the facilities given heads-up," Miller said. That way, the folks on the ground know that it's an important process and that they ought to be prepared for it.