Elliott's Purchase Improves Wesley Allen Production Process
Thomas Russell -- Furniture Today, August 16, 2011
The Hamilton bed by Wesley Allen is among the designs the company is making using the new bending equipment it acquired through its purchase of Elliott’s Designs. The $999 bed is shown in a textured copper moss finish.
That's largely due to the purchase of roughly 20 bending machines as part of the transaction. The purchase price, which company officials did not disclose, also included the rights to the Elliott's name.
The deal didn't include designs or molds used to make the Victorian style beds. However, Wesley Allen, whose plant is about 15 miles from the former Elliott's plant in Los Angeles, was able to hire several key Elliott's production workers.
"The primary reason we did it was because of the machinery and personnel," said Victor Sawan, CEO. "Elliott's through the years had a reputation for very good quality. Not only was it a reputation, but a fact. We always respected their quality. We also are known for quality, so we thought it was a good fit. We thought by using their machinery, we could be more flexible in our own production."
"We have always believed in automation and having good machinery to help keep our costs in check," he added. "The machinery we purchased from Elliott's was in good condition and was kept up very well. It gave us certain capabilities we didn't have."
The deal came together last year after Elliott's founder Elliott Jones purchased the company back from casual dining specialist Tempo Inds. Jones, who said he had sold the company to Tempo about a year earlier, said he purchased the company back largely because Tempo decided not to continue the line.
Jones said Tempo had planned to produce the beds in China and have them finished at Elliott's Rancho Dominguez plant. That didn't work out as planned.
"They brought one bed back (from overseas) and it wasn't even close," Jones said of the effort to duplicate the Victorian-inspired designs.
Elliott's Designs was started in 1979. While its designs and multiple custom finishes helped spur sales over the years, the line ultimately lost business to lowerpriced Asian imports. Jones said the product grew out of favor with retailers.
"The big problem with all of our stuff was that it was all classic designs that would go on forever," Jones said. "Dealers couldn't stand to have to have something on their floors for more than a year. They couldn't be satisfied with having antique classic designs."
After Jones bought the line back from Tempo, he decided to liquidate the machinery and contacted Wesley Allen.
"I asked them if they wanted the name too because we were going to abandon it," Jones said. "I would rather have it under control of someone I know rather than someone else pick it back up and start using it."
The purchase of the equipment was just one facet of Wesley Allen's own efforts to restructure its manufacturing starting in early 2010. A big part of that process was to organize the production line as one "operational cell," in which workers were cross-trained to perform various tasks.
"This allows us to move resources (people and material) around the floor as needed to complete an order," said Wesley Sawan, executive vice president. "This is done on a continuous basis and allows us to complete a large number of orders in the normal course of business rather than having to firefight large orders or difficult styles."
The company also took steps to reduce set up times by altering the flow of material through the factory.
"Set up times eat money faster than anything else, and reducing them is central to any efficiency project," Sawan said. He added that the company has effectively lowered its average lead time from 22 days to 12.
"The net result is that we have never been as capable as we are today of generating profit," he said. "What we need now is a recovery in the housing market to create more demand. I am extremely proud and pleased of what we have achieved. We have taken the recession as a time to restructure and become more efficient. When the economy cycles upwards again, we'll be poised to reap great benefits."
Sensing that there isn't a great demand for Victorian-inspired beds, the company has no immediate plans to relaunch the Elliott's line. But if and when it does, the company will have the Elliott's name at its disposal.
"It depends on the marketplace," said Wesley Allen CEO Victor Sawan. "When the marketplace changes, we will see where the Elliott's line fits."
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