More Thoughts on Asian Sourcing in 2009

When Furniture/Today takes on a project like the recently published Asian Connection, we try to interview as many industry executives as possible. This helps us better understand what’s actually happening on the ground and gives us an idea on how their companies are responding.

Unfortunately - due to space limitations - not everyone’s comments get in the print edition. That’s not to say their feedback wasn’t important. In many cases it reinforced what others were saying.

Here’s a recap of what some of those folks had to say relating to Asian sourcing prospects in 2009, as well economic challenges in the year ahead.

•  ”If everybody can make it through the next six to nine months, there will be a lot better business and it will be more profitable. In our case, we feel like our Indonesian factory has a much better quality level than Vietnam or China. They have been there 30 years. From a quality standpoint, we are in a good situation.”

Gene Clark
Vice president of sales and marketing, Ligna Furniture

•  ”The biggest challenge I am looking at is minimum order quantities. With inventories being higher than they should be given the current business climate, I am not interested in sourcing from companies or countries that have high order quantities. We try to work with sources that have lower standards on that. They have been receptive to our needs.”

Mark Smith
President, Emerson et Cie

•  ”The manufacturing partners we do have are mostly in Vietnam and are good partners for us. We don’t have any desire to change for change’s sake. We have become pretty important to some of the factories we work with over there, and they are important for us too. We are both good for each other’s business.”

Taylor Vaughan
President and CEO, Vaughan Furniture

•  ”Changing the vendor base comes at the expense of lead times and the relationships that you have with your factories. We’re trying to give people that we have been doing business with 10 to 15 years as much business as we can and not spread it out. You can’t get too spread out. You have to keep a close eye on it right now. We are making trips every month and a lot of the trips are focused on the supply chain.”

Todd Evans
Vice president of sales and marketing, Standard Furniture

•  ”We are not shifting our sourcing strategy…. The relationships we have built with the people over there, these are relationships built on trust. There are millions of factories over there, but it comes down to whom can you trust. There are a lot of companies that can make good product, but what’s going to happen when there is a problem?”

Chip Piekenbrock,
Director of Marketing - Flexsteel

•  ”Reputable factories are working within labor law standards, but (workers) are not getting overtime or a wage increase. Most reputable companies will honor the guidelines they operate within, but there is no pressure to have wage increases from the factories. The turnover of staff also will be less because the market is tight over there. They have the same fear factor as in America where no work is the other option.”

Richard Magnussen
President and CEO, Magnussen Home

•  ”We are all in China and it will stay that way in 2009. We are looking at other opportunities including Indonesia and Malaysia, but we have everything in place and we have good control in our factories, so there is no need for us to rock the board unless we have capacity needs beyond our expectations…. The word survival is the basic word - nobody is talking about getting rich. I think ‘09 will be better than ‘08, but it will only be better for us because some of our competitors won’t be around.”

Jerry Ruff
President, Prestige Furniture

As always, Furniture/Today and its readers appreciate this kind of insight. And as always, we welcome additional feedback too. What do you think about the prospects of Asian sourcing in 2009?