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Kokuyo Furniture Co., Ltd., becomes the first furniture manufacturer to obtain BS 25999 certification from BSI

Background

Kokuyo Group, the largest general office equipment supplier in Japan, started out in 1905 making covers for the old style bookkeeping ledgers ‘Kuroda paper shop’ in use at the time. Later, they began to make and sell general stationery, before expanding their business to include the manufacture and sales of office furniture. They have been producing goods to meet the increasingly diverse and segmented needs of their customers throughout the subsequent years under the mantra 'Contributing to society by providing superior sustainable products'.

Within the Kokuyo Group, Kokuyo Furniture Co., Ltd. (hereafter, Kokuyo Furniture or the company), which manufactures and sells office furniture and building materials, was chosen as a pilot company to establish a Business Continuity Management System (BCMS). In September 2008, the company became the first Japanese manufacturer of office furniture – and believed to be the first in the world - to be certified to BS 25999, the internationally recognised standard for Business Continuity Management (BCM).

Awarded by BSI Japan, the scope of the certification covers the manufacturing and shipping of office furniture and building materials as well as customer services at a total of nine locations, including five business sites – namely, the head office in Higashinari-ku, Osaka; the Shinagawa and Kasumigaseki offices, the Mie and Shibayama plants, and four distribution centers located in Mie, Nagano and Chiba prefectures. The process – from establishing the BCMS through to achieving certification – took about one year.

Establishing the Business Continuity Management requirements

Were Kokuyo Furniture to have to suspend its operations in the aftermath of a major earthquake or even a more minor incident, their products would not be supplied as expected to companies who may need to relocate their offices, nor would schools receive the desks and chairs they require, to the further detriment of society. One object lesson from the recent Niigata Chuetsu great earthquake is that the impact of suspensions by primary industries on other business organisations, including partners and clients, is almost immeasurable. But this earthquake has served to increase awareness about the importance of having a robust BCM programme in place. When a disaster affected a partner factory (to whom manufacturing had been outsourced), they struggled to cope in the absence of any risk management manual or written procedures. This experience encouraged the company to establish a BCMS.

Mr. Teruhisa Takagi, a manager in the Production Control Department, explained how important business continuity is with an example relating to our daily lives. "I use the bus to get to the airport when heading off on a business trip. When the roads are clogged, announcements are made before getting on the bus, and we are repeatedly advised about the current conditions including congested sections. Passengers are also told about alternate routes and expected arrival times. This is a clear demonstration that the bus company operating the services along this route has already set up a business continuity programme which reaches right down to their clients – the passengers."

Business continuity exercising leads to a BCMS

For Kokuyo to better understand their Business Continuity requirements, training sessions are held in which participants are split up into several teams to handle – without prior preparation – a post-disaster scenario that is constantly changing. This type of unexpected scenario training is generally adopted, as it is most practical in terms of BCM training. For example, assuming a major Category 7 earthquake has struck Osaka: damage reports concerning buildings and people are updated by the minute. Participants must cope with various situations, including lifesaving, prevention of secondary disasters, and confirmation of safety, etc.

After receiving this training, Mr. Junichi Yamamoto, an assistant manager in the planning department, commented, "The priorities that were set and initial action taken differed in every team. It was chaotic; for example, although roles had been allocated, participants focused on one bit of information and other matters ended up being totally neglected."

Following the exercise, Kokuyo management reviewed the actions and responses, and recognised the necessity for a BCMS and the importance that individuals must understand what sort of action is required in the event of a disaster without having to rely on a manual.

Establishing the BCMS

In order to establish Kokuyo Furniture’s business continuity, critical activities were first identified by analysing the impact of any suspension in the supply of key products and services. Items that are widely distributed and those for which supply is needed if many companies were to suffer from a natural disaster or more mundane incidents are prioritised.

After identifying the critical activities, a Business Impact Analysis (BIA) was conducted, the financial impact and consequences of harmful impacts were measured, and then a priority ranking, Recovery Time Objective (RTO) and action plan were established. If the head office was rendered inoperable, an alternate HQ is to be set up to restart services. In terms of the supply of products, an action plan was established in accordance with the level of risk, such as providing services using alternative products depending on an inventory check at the storage depot.

All told, it took about a year to establish the BCMS including the analysis of risks and impact levels, and drafting an action plan. The completed manual for Business Continuity Management Data and Records is about 12cm thick!

Towards an BCM embedded organisational culture

Ongoing training is fundamental to embed BCM within the culture of the organization. BCM exercises are performed and reviewed on a regular basis. The results are fed into the BCMS and contribute to the continual improvement cycle which is inherent in BS 25999.

Mr. Takagi comments, "It was not easy to get all employees to appreciate the whys and wherefores of BCM. We educate the section leaders, who then pass on what they’ve learnt to other employees within the workplace in order to ingrain BCM within our culture. We repeatedly reference BCM in our morning assemblies, business plan presentations, and through our internal audits. Effective internal ongoing communication is a vital contributing factor."

Stakeholder confidence throughout the supply chain

When Kokuyo Furniture set up its BCMS, the fundamental reason was not to obtain BS 25999 certification, but the company decided to apply for the certificate as a means of demonstrating to their stakeholders the Kokuyo Group’s commitment to its mantra. It is particularly noteworthy that the company’s management made a strong commitment to secure BS 25999 certification. In September 2008, just one year after establishing their BCMS, they were certified by BSI Japan after a thorough assessment.

Mr. Takagi from Production Control, noted, "establishing a robust BCMS and achieving BS 25999 certification is an important consideration for international trade. These milestones have provided a clear advantage for offices that wish to expand their overseas trade. We could clearly demonstrate our policy as a part of our Corporate Social Responsibility (CSR) to our clients and stakeholders through our BCM programmes. This has been another benefit of earning certification. Challenges still to be faced include educating those employees who answered that they don’t clearly understand what BCM is for (some 20% of all employees) when surveyed to assess the level of comprehension amongst employees. We also aim to use Kokuyo Furniture – which has become a model for BCMS – to establish a consistent system throughout our supply chain with a focus on BCP by promoting awareness of the need for business continuity through our sales subsidiaries and manufacturing partners within the Kokuyo Group. Moving forward, the aim is to advance the culture of BCM throughout the supply chain".

Benefits of BS 25999 Certification

Kokuyo identified a number of key benefits of being certified to BS 25999:

• A robust Business Continuity Management System (BCMS) is in place and independently verified ensuring a stable supply of products to their customers.
• Business risks have been minimized while organizational resilience has been enhanced.
• The company's brand image has been enhanced as they can demonstrate a commitment to the latest international best practice.
• Certification provides a competitive advantage particularly when bidding for new business.

Please contact Toshikazu Yonezawa (Product Manager, BSI Japan) if you have any enquiries about this case study.