Made in USA: Low Cost Alternative? Created by JohnHowell on 8/29/2012 9:29:25 AM
I’ve read several articles lately about how to take advantage the opportunity to re-shore furniture manufacturing now that the cost advantage of off-shore sourcing is diminishing. The ideas presented make good sense.
I’ve read several articles lately about how to take advantage the opportunity to re-shore furniture manufacturing now that the cost advantage of off-shore sourcing is diminishing. The ideas presented make good sense:
- Modernize information processing by integrating design software with manufacturing
- Cut costs by utilizing the latest in automated machinery
- Adopt lean manufacturing techniques to minimize inventory, reduce lead time and increase efficiency in production
- Incorporate mass customization to offer consumer choices economically and expediently
- Partner with suppliers for consistent quality and fast turnaround
- Leverage the cost benefits of using domestically harvested raw materials
- Lobby our government to enforce fair trade practices among our trading partners
Indeed, if we are to compete successfully, we need to incorporate these tactics. But is this the whole answer? Should U.S. furniture manufacturers strive to become the low cost supplier?
This strategy is often described as being like IKEA. Since IKEA has now brought manufacturing to the U.S successfully, the theory is that if they can do it, we can do it by imitating them.
One principle of finding opportunities in a marketplace is to see where we can differentiate ourselves by doing things better than the existing players. In order to compete successfully using the strategy described above, we really need to beat IKEA at its own game. After all, IKEA already has a strong position in this market. I’ve been in an IKEA outlet recently and saw what it had to offer, both in terms of value and presentation. Good luck.
We need to explore different niches in the market to find opportunities. Rather than go head-to-head with low-cost importers and IKEA, we should raise the bar on quality.
So how do we define quality? As I’ve mentioned in previous articles, our best opportunity is visual. Nothing will illustrate a superior product better than using superior materials and showing them to their best potential.
A niche market does exist for furniture manufactured with the emphasis on displaying the visual characteristics of wood to their fullest potential. Craftsmen utilize local woods that are selected for their beauty. The woods are not exotic and not necessarily highly figured. The boards or leaves of veneer are arranged on each piece of furniture in a manner that is aesthetically pleasing. The surface is meticulously prepared and finished to enhance the beauty of the grain to its fullest.
Unfortunately, the cost of these products is prohibitive for most people. Part of the reason for this is that they are generally made in small shops with little automation. The advertising and distribution are on a small scale, thus lacking the economy of a more sophisticated network. These obstacles can be remedied by larger scale, automated manufacturers.
Other cost considerations are not so easily remedied. Premium woods command premium prices. There’s no way around that. Then selecting and arranging wood on a piece of furniture needs human intervention and therefore increases labor costs. Machines are not good at making choices that involve aesthetics. Surface preparation also requires skilled labor. It can, however, be made more efficient by using automated equipment where applicable and using the right tools and techniques in all phases of the process. The finishing process will not necessarily be more labor intensive unless we decide to hand-rub the final coat. In conclusion, the overall costs of producing furniture in this manner will definitely be higher. We need to convince potential customers that it’s worth the extra cost.
Most consumers have lost sight of the potential beauty of wood. They’re used to seeing wood finishes with an opaque, homogenous color and little of the grain showing. When they see natural color variations in finished wood, they actually see them as defects.
We need a concerted effort to educate the public, similar to what has been done for the dairy, beef and pork industries. It needs to be more than just a slogan, however. Consumers have to see finished wood firsthand to fully appreciate it. Qualities like chatoyance, the gem-like iridescence that finished wood imparts, can only be witnessed in an “up close and personal” experience. These qualities can be simulated, however, to promote interest. Promotion needs to focus on getting consumers excited about wood’s potential beauty in order to get them to make the effort to see for themselves.
Manufacturers can work toward this end by promoting furniture of this quality at market events but the effort needs industry-wide support. Trade associations need to work collectively with appropriate government agencies, as has been done in other industries. Individuals can help by supporting and participating in trade association activities as well as being active in promoting a political climate favorable to this cause.
At the same time, we need to promote woodworking as a viable career path in order to attract the right workers for the job at hand. They need to be educated and trained in the skills specific to making wood look its best as well as the technical side of woodworking.
Is it all worth it? Can we convince consumers through marketing campaigns to pay the necessary cost of a premium wood product? Can we attract workers that appreciate these qualities of wood enough to choose this as their career? Or should America be content with being the low-cost alternative for the domestic furniture market?