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Thomas Russell

U.S. companies maintain presence in Indonesia

SURABAYA, Indonesia - U.S. and Canadian furniture importers that do business in Indonesia say that having a successful sourcing experience depends largely on having a presence on the ground and quality workers to help run those operations.
     Companies like Casana, Stanley, Lexington Home Brands and American Woodcrafters have offices in the Surabaya area, which is home to many well-known furniture manufacturers.
     Lexington has sourced in Indonesia for about 12 years and has had an office in Surabaya for more than 10. It has more than 30 employees on the ground, ranging from engineers and product managers to finishing, logistics and quality control experts.
     "They are talented and they understand the culture there," said Phil Haney, president and CEO of Lexington Home Brands. "We have both ex-pats and Indonesian citizens that are a nice mix of people that can interact with and do business with the factories there, and that gives us an advantage over some people that don't have that."
     With the exception of the logistics and administrative personnel that work at the office, most employees are in the field, working with factories on a daily basis.
     That was certainly the case at Casana's office in Surabaya, which Furniture/Today visited in early August. Most of its 15 employees work with factories that produce the company's line of contemporary bedroom.
     Stanley Furniture has had an office in Surabaya since 2009 and has about 15 employees on the ground. These range from engineering and quality control staff to human resources, accounting and logistics.
     "It's a professional organization," said Adam Tilley, vice president of product management. "We run that office like it is an extension of our Stanleytown, Va., or our High Point offices. It is not like having an outpost or a third party type of organization.... Having that presence, we believe we have a solid foundation to run a professional business over there. We have made a commitment to the area.
     "Those folks help us execute the specifications to the standards we want to have executed," Tilley added, noting that Stanley has a total of 50 employees in Asia. "Transparency is a real challenge in an import model, and having all those folks over there will help us with information transparency. We are dedicating the resources to be able to tell people where our product is at any given moment."
     Case goods importer American Woodcrafters has had an office in Surabaya for about 15 years and has 15 Indonesian employees who report to its director of quality control.
     "We have people stationed in the factories 24/7, and we rotate them between factories so they can learn the entire product line," said Lao Labra, American Woodcrafters president. He said the rotation allows the staff to learn and understand manufacturing processes that may be specific to each factory.
     He said that QC staff members typically have a college degree and that the company pays these professionals a competitive wage in order to get the best quality.
     "I think it makes the difference between having good product that complies with U.S. standards and requirements versus having just another Asian product," Labra said. "We are not just a buyer - we are a buyer that has a leg in the country."
     He added that having a presence on the ground also improves the company's relationships with the factories because of its willingness to help the factories understand and achieve various standards in a cost-efficient manner.
     "There is a constant flow of information, and that allows us to make better and more prompt decisions," he said.
Hooker Furniture is in the process of setting up an office in Surabaya, with quality control personnel who will spend time in the factories.
     "The major job there is managing vendor relationships and our quality assurance efforts and making sure things get done on time," said Art Raymond, senior vice president of case goods operations. "Our presence there is reasonably new. We are working with three factories there and we expect that we will expand that. Indonesia does some interesting things that we think will make it an interesting place to do business over the long haul."

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