Case Studies

KONE Corporation

Changing the Way Elevators Operate

The list of achievements held by the KONE Corporation (KONE) is unparalleled in the elevator, escalator, moving walkways and automatic building doors industry; in fact, the firm’s dominance in its field would be unparalleled in nearly any market. Having begun in 1910, the industrial engineering firm has a century of experience from which to draw, on which to build, and by which it’s known. Most impressive is not the firm’s longevity, however; rather, what stands out is KONE’s outstanding growth, driven by the company’s constant advancement of technologies and strategic assets.

The firm, which was founded in Helsinki, Finland, still home to the corporate headquarters, takes in revenues of over $5 billion, and it has been listed No. 39 on Forbes magazine’s list of the world’s Most Innovative Companies. KONE manages this by handling all facets of operations – from manufacturing and installation to maintenance and modernization – and doing so with a consistent eye to smart design. This approach has established the company across over 50 countries, and its nearly 34,000 employees have helped it become one of the world’s 1,000 biggest public companies, benefiting every nation it serves.

“KONE is a 100-year-old company … 101, actually. We are an international firm that made a strong entrance into the United States through an acquisition [in 1994] of a company called Montgomery [Elevators] based out of [Moline] Illinois,” says Vance Tang, executive vice president and area director for KONE Americas. KONE Inc., its U.S. subsidiary, is headquartered in Lisle, Ill. Through its acquisitions KONE has become the major force in the country for safe, reliable, environmentally friendly and energy-efficient elevators, escalators and moving walkways.

The company’s objective is to offer the best “People Flow Experience,” according to the company’s vision and strategy statement. That means providing the safest, smoothest, most comfortable and most sustainable form of building transportation.

Constant Innovation

Tang concedes that when one thinks of innovation, elevator companies don’t initially enter the equation. Nevertheless, there sits KONE on Forbes magazine’s innovative companies list above such household names as PepsiCo, Oracle, and even technology giant Adobe Systems. The reason for this listing stems from the company’s decision to shake up the foundation on which the company and industry was built, and completely re-imagine how elevators operate. It was risky, but as competitors have begun to follow suit, it has clearly paid off.

“We have always been an innovative leader in technology and services,” says Tang. “Our notoriety as that type of company was driven a lot by one of the main innovations that KONE did in this industry, which was moving away from hydraulic elevators.” Elevators traditionally were powered by hydraulic lifts, such as the kind one has most likely seen in a car garage to help lift up vehicles to be repaired. KONE found a better way.

“We call it a machine room-less solution. We removed the machine room by placing the hoisting device into the elevator shaft, and it lifts the elevator using a permanent-magnet motor as opposed to using a piston and hydraulic fluid,” states Tang proudly. Even though “placing a motor” inside the hoistway may seem practical to those outside of the industry, no one had found a way to effectively put that into practice until KONE. The entire understanding of how elevators worked was upended. It was a transformational shift that continues today.

The key is that KONE’s new mode of operation wasn’t simply an alternative; it has proven to be better in nearly all ways. “There are several main virtues of this practice,” says Tang. “One of these is the environmental friendliness of not having this hydraulic fluid, which is a petroleum-based product, and has the potential of seeping into the ground. It is also safer and more energy efficient – up to 70-percent more so than hydraulics.”

Elevators can consume two to 10 percent of all energy in a building. While many focus on lighting and heat usage to make a building more efficient, the difference in elevators can make a significant impact. “If you can cut that 10 percent of a building’s energy in half or by 70 percent, that is certainly valuable,” emphasizes Tang.

Start-to-finish Service

KONE doesn’t just provide the science behind the product, but everything from conception to maintenance and repair. While machine room-less elevator operations were not around in 1910, an unparalleled commitment to the customer was and that has been the hallmark of the organization for over 100 years.

“We do everything from the preliminary design and conception of products all the way to the manufacturing and installation, and ultimately the maintenance, repair and eventual modernization,” says Tang. “There aren’t many businesses left that are fully vertically integrated. But we are able to listen to our customers better, address their needs, and know where we need to do better, as well as provide solutions that are safe, reliable and efficient.”

As a leading company KONE sets the bar high and in recent years made changes across the business to increase sustainability. The firm recently upgraded its fleet of maintenance vehicles replacing older models with more efficient vehicles. KONE also developed and integrated a GPS system to track and deploy technicians to customers according to whom is closest, increasing efficiency and improving customer satisfaction.

Ultimately, however, concerns such as sustainability come second to safety. Tang estimates that at any given time there are more people in the world traveling on a KONE product than are flying in airplanes. Accordingly, KONE is constantly working to ensure the safest transportation possible.

“Reliability is a huge focus for our customers, because every minute that an escalator, elevator or moving walkway is down means lost business,” says Tang. “In a shopping mall setting, if an escalator is not working studies have shown that 60 to 70 percent of shoppers simply won’t go up to the second floor.” KONE products are found all over a modern city, in hospitals and subway stations and corporate headquarters, yet, in a way KONE’s ultimate goal is to produce something inconspicuous.

While not all of the company’s efforts are noticed – the best jobs are those that work properly without ever bringing attention to themselves – some of KONE’s showcase work can be seen everywhere from the Trump Tower in Chicago to the 30 St. Mary Axe Building in London, from the Schiphol Airport in Amsterdam to the Beijing National Grand Theatre in China. In addition, the company’s major competitors – firms that initially disregarded a machine room-less elevator – are now incorporating similar technology into their products.

Prepared for Anything

KONE has achieved its ubiquity by adhering to its foundations of a customer service-based company. At the same time, the KONE Corporation displays a willingness to shake up the very core features of that service in order to provide cleaner, more efficient, and safer forms of building transportation.

As cities continue to grow the need for KONE products will grow simultaneously, which is why Tang doesn’t see the recent slump in new construction as a particularly damaging trend. Instead, the growth of cities will facilitate modernization and drive demand for more KONE products.

“In the U.S. alone there are more than 1 million elevators and escalators in operation and over half of them are at least 15 years old, so every single one of them represents an opportunity to be upgraded,” reflects Tang. “Last year, the modernization market surpassed new construction for the first time and we see that as the new normal.”

Simply put, cities are growing fast and running out of space, so building vertically is one of the best solutions to account for massive urbanization. As cities grow taller, older buildings will either be replaced or often upgraded and expanded vertically and building transportation solutions will become increasingly pervasive.

With all factors in mind, KONE has a plan in place for more immediate and responsible growth. “Our journey is to grow from being a challenger to our three major global competitors and become the industry leader. It may mean becoming the biggest, but frankly that’s not our priority,” asserts Tang.

Instead, the company is focused on a number of key areas that will lead to the kind of growth that KONE is looking for. First and most important to KONE is safety, followed by customer loyalty, employee engagement, profitable growth and environmental excellence. So long as the company continues to operate as an environmentally responsible company producing the safest products available and retaining both clients and internal talent, KONE will have much to celebrate as further company milestones are reached.

Published on: February 13, 2012

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