Legends' U.S. plant thriving
By Thomas Russell -- Furniture Today, July 23, 2007
Tolleson, Ariz. — Case goods supplier Legends Furniture is different from most of its peers. Unlike many that have shifted to an all-import model, the 17-year-old company still makes about 60% of its product at its plant here.
That includes most of its home office and home entertainment furniture. Legends, which shows at the Las Vegas Market in space A-606, also sells promotional and midpriced bedrooms.
Its 138,000-square-foot Arizona plant, which includes 7,000 square feet for offices, is in a small industrial park in this community of 5,000 just west of Phoenix. Before it opened in April 2005, the company had 185,000 square feet of distribution and manufacturing space spread out over five area locations.
With its new central location, Legends eliminated the cost of transporting goods between the old facilities. It was a step in the company's efforts to incorporate lean manufacturing techniques.
In creating a smaller footprint, the company consolidated various work areas to achieve greater efficiency and utilization of space. For instance, in the old setup, the company devoted some 10,000 to 15,000 square feet to a 30-employee molding department. The new molding department has 10 people working in 1,000 square feet.
Work areas are set up to utilize smaller machines, and receive a steady flow of materials and supplies the assemblers need.
"The people who are adding value are the assemblers, and they are like surgeons," said Bob Duckles, an operations leader at the plant. "You don't want them wandering around trying to find stuff. You want the stuff brought to them."
Assemblers work in designated areas called cells. They receive component parts in bins or carts, ready to be pieced together for anything from a drawer to a complete desk or home entertainment unit. Most carts have everything a worker or team needs to assemble a particular piece of furniture.
"We prefer to have it assembled in one place versus moving it from one part of the floor to another," Duckles said.
Each bin holding the component parts also has a color-coded piece of paper called a "traveler" that lets workers know the piece is expected to be completed that day. By the end of the day, workers are expected to have completed the order for that day and to begin working on a new color-coded order for the next day's cycle.
The plant has plenty of space for raw materials and completed goods, but the company saves on overhead by only ordering only those components it needs at the time.
"A big part of lean is that we don't have any inventory and do our best to make sure our customers don't have any inventory either," said company President Rick Schmidgall, who founded Legends in 1990 in his garage in Phoenix. "Anything not used in the production line is waste."
When he started the business, Schmidgall produced entertainment centers. He added home office in the mid-1990s. Today, home entertainment remains at the heart of his product mix, representing some 65% of sales. Home office accounts for about 25% and bedroom makes up the remaining 10%.
Legends originally produced classic American style oak furniture and dealt largely with stores that specialized in that mix. Eventually, it broadened its line with more sophisticated lifestyle looks, including a variety of cherry finishes on maple solids and veneers.
The domestic line remains competitively priced with executive desks retailing on average between $599 and $699. Entertainment consoles wide enough to hold a 64-inch flat panel TV retail around $399.
Officials declined to reveal a sales figure for Legends. They did say that before 2006, the U.S.-made product had double-digit growth every year since 1990. Since the new factory's grand opening in July 2005 sales have been flat, said company marketing director Tim Donk.
"However, given our industry's current business climate, we view just being flat as a good sign," Donk said. "We are very optimistic about the future of our domestic production."
Operating at about 60% capacity, the 26-acre site also has room to grow both inside the plant and on an adjacent eight acres. That land can accommodate another 165,000-square foot building.
"We could double our capacity easily without adding another shift," Schmidgall said.
He realizes that pressures remain from overseas competitors and that one day his own business may have to adjust to that. However, he believes in his domestic operation's ability to thrive, largely based on its lean manufacturing model.
He said he is dedicated to his 200 workers, many of whom have contributed to Legends' success over the years.
"It is a million times easier to give up the factory," he said. "But I owe it to them to provide the best future for them that I can. That is what I am trying to do."
