U.S. factories seen as viable
By Thomas Russell -- Furniture Today, June 15, 2009
GREENSBORO, N.C. — Domestic furniture manufacturers can survive if companies take the right steps to refine their processes and sharpen their business focus.
That was a view held by three manufacturing experts who spoke to about 70 industry professionals attending the American Home Furnishings Alliance's annual Manufacturing Summit here June 5.
One speaker, Steve Taylor, a professor of management at Mississippi State University, said that as the number of foreign home furnishings manufacturers grows, it will be important for U.S. producers to be small, smart and extremely agile.
In particular, he said manufacturers should identify niches where they can compete.
Among the growth opportunities he sees are serving the Gen Y consumer who wants products tailored to his or her individual needs, and serving aging Baby Boomers who are downsizing their living spaces.
But in serving these markets, Taylor also warned manufacturers against getting too big.
“Long production runs are not in our own best interest,” he said. “When you have a long production run, you have a commodity product and that is based on price and we cannot win that war.
“You have to make things efficiently and you have to make things that differentiate you from your competitors,” he said, adding that processes and products should be developed with the customer experience in mind.
Taylor also urged manufacturers to be innovative, doing things like installing WiFi devices in recliners and updating Web sites to include videos that update consumers on where their product is production.
Art Raymond of Raleigh, N.C.-based wood furniture and cabinet manufacturing consulting firm A.G. Raymond & Co. described the “Factory of the Future.” Citing Winston Churchill, he took an optimistic view of the old industry model that has resulted in hundreds of plant closures, seeing “opportunity in every calamity.”
To compete now, he said, a manufacturer must define its marketing plan to identify customers and clearly state its value proposition. A factory must focus on what it does well, he said.
Raymond said successful factories will be able to combine and manage the use of technology and information systems, suppliers, space and people. People in particular are a critical part of a plant's success and need to be nurtured through leadership training and other education programs, he said.
“I would prefer to have a mediocre plant and equipment operated by a world class team than vice versa,” he said.
He also identified two models for the factory of the future. One was a semi-custom, upper medium-priced wood furniture operation that produces in small lot sizes, and the second was a high-production facility making a limited number of SKUs of low-priced yet highly functional and innovative products.
Eric Lail, director of lean solutions for Hickory, N.C.-based business consulting firm Total Insight, described the lean manufacturing process. He cited an unnamed company that went through a five-year conversion, reducing its raw materials inventories and its number of facilities, and cutting its worker compensation costs because it had fewer accidents.
Lail said a key element of lean is reworking the plant floor to remove wasteful processes and anything that doesn't add value to the finished good.
Another major element is the notion of a “pull” system that responds to customer demand for certain products, rather than producing goods and hoping they sell.
He said workers are critical to the success of any lean conversion.
“Lean always works if it uses the proper leadership strategy to implement it,” he said.
“You have to constantly create enthusiasm with your employees and always pat them on the back for what you have done to improve.”
He also cautioned that a conversion to lean manufacturing can take time to yield benefits.
“Lean is not a silver bullet if you are looking for a quick solution,” he said. “It's not a quick solution.”
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