A 59th-minute goal from Jason Kennedy gave Dale a 1-0 win at Spotland, as the visitors enjoyed plenty of possession without greatly troubling Jake Kean in the home net.
Bobby Grant had a late header cleared off the line by Joe Widdowson in the Iron's best effort, with Chris Dagnall also denied when Kean quickly closed him down.
“We had a lot of possession but produced nothing at the end of it. Performance-wise we were okay, we had a lot of the ball but did nothing with it in final third," said Knill.
"Don’t get me wrong, I want the ball passed but in the final third I want it in the back of net. So we come away with a 1-0 loss from a game which should have been a draw for us. The goal was a poor one from our point of view – the goalkeeper did well to parry the initial shot but the there was only one of our players marking two of their men.
“We couldn’t defend well enough to keep them out as they kept us out. We lacked something at top end of pitch. We didn’t have the quality at the right time.
“I believe in this group of players – we were okay without anything at the end of it. We didn’t have the quality, but I’m sure we will have on another day, as we have in the past. We go again on Saturday in what is a winnable game against Walsall.”
Steve Eyre, the Dale boss, was pleased his side built on their 4-2 win at Bury on Saturday by not conceding.
“The clean sheet was the key to victory. Even though Scunthorpe had lots of possession and we were forced to play deep at times, I felt we
defended well and looked comfortable in our own penalty area," he said.
“We were disappointed not to score one of the chances which came our way in the first half, and we said at half time we felt it could be a 1-0 scoreline and so it proved to be.”