VANCOUVER, BC – Denis Staples, co-owner and president of Deslaurier Custom Cabinets of Renfrew, ON, kicked off the Day 2 of Wood Tech Summit with a keynote presentation on how his company rebounded after a 2009 New Year's Day fire wiped out its 95,000-square-foot plant, including all of its manufacturing equipment and 150 full kitchens that were ready to be shipped to customers after the holiday break.
The company's Phoenix rising from the ashes story is chronicled in the book, "That'll Never Work: Business Lessons from Successful Canadian Entrepreneurs." The book has been a No. 1 best seller for non-fiction in Canada.
Staples said the fire was sparked by a welding crew working at the plant. Sparks touched off sawdust trapped between an older cracking concrete roof and a newer one that was added over the former. Most of the damage, he added, was caused by smoke and water pumped by firefighters to douse the flames.
The day after the fire, Staples and his partner, Jim Deslaurier, talked on the phone about what they should do about their business that had been growing exponentially, hitting $24 million in sales in 2008. "On January 2, 2009 we did not cry over spilled milk," Staples said. "Instead we saw an opportunity" to build a better cabinet manufacturing company.
Staples pointed to two saving graces that gave his partner and he reason for hope. First, the company did not skimp on insurance and was ultimately able to receive approximately $10 million including $4 million for equipment, $1 million for lost inventory and $5 million for business interruption. Second, Staples said an office worker who lived near the plant ran into the building in the early stages of the fire to rescue key company data, including customer information.
Refilling Customer Orders
While the first order of business was working with the insurance company to reach a settlement, the company wasted no time in contacting a cabinet company to produce the 150 cabinet orders damaged in the fire. The company, which had lost a lot of its export business because of the sudden downturn of the U.S. economy, eagerly accepted the opportunity to fill Deslaruier's orders using the information that had been salvaged from company computers.
Next, Deslaurier set to design and build a new plant. It chose a location near its former one in Renfrew, but decided to make it only 50,000 square feet. In addition, the company made a conscious decision to build a separate warehouse further away from the plant so that if another fire occured it wouldn't lose its inventory again as well.
With the ability to start from scratch, Staples said a decision was made to switch from a traditional panel saw based operation to nesting to not only be more flexible, but to differentiate itself in the market place. He added that the company chose to purchase all of its equipment from one vendor so that it could feel assured that whatever was promised in the sales and engineering phases would ultimately be made to work as promised when implemented.
He said the company has three nesting routers and also has at least two of other key manufacturing machines such as edgebanders, sanders and finishing lines. Having redundancies not only adds production capacity, he said, it provides insurance in the event a machine goes down for services.
In another strategic manufacturing move to be more lean and green, the company Deslaurier Custom Cabinets invested in a waterborne UV finishing system.
Staples strongly recommended that wood products companies review their insurance needs on an annual basis. "We negotiated with insurance companies over premiums, but we did not go with the one was cheapest. We went with one that was known to be fair."
He also said his company's insurance agent talked him into expanding his coverage for business interruption insurance from six months to 12 months. In addition, for about $5,000 the insurance company came into the shop and conducted an audit, itemizing each piece of equipment and evaluating its replacement cost.
Having a good reputable insurance company, extended business interruption insurance and knowing how much the equipment in his shop was worth, helped the insurance settlement go as smooth as could be expected, Staples said.
Wood Tech Summit was organized by the Centre for Advanced Wood Processing at the University of British Columbia and Woodworking Network / Vance Communications Canada. The event was further supported by several key woodworking suppliers that exhibited at the event, including In-House Solutions, Masse Machinery & Tooling Sales, Planit Canada, Richelieu Wood Finishes, The Sherwin-Williams Company and the Wood Manufacturing Council.
Video: How Deslaurier Custom Cabinets Went Green