Urs Buehlmann

Identifying future competitive business strategies for the U.S. furniture industry: Benchmarking and paradigm shifts

This paper describes benchmarking activities undertaken to provide a basis for comparing the U.S. wood furniture industry with other nations that have a globally competitive furniture manufacturing industry. The second part of this paper outlines and discusses strategies that have the potential to help the U.S. furniture industry survive and thrive in a global business environment. A case is made for a paradigm shift in the business of designing, manufacturing, marketing, and distributing wooden furniture, as it is perhaps the most promising vehicle for our industry to sustain a prosperous U.S. manufacturing base into the future. Furthermore, a change in business models ? a paradigm shift ? is proposed to avoid cost-based competition with low-cost producers such as those located in Asia and South America.

Competitive actions of small firms in a declining market

Small firms, through their flexibility advantages and closeness to customers, potentially can increase their sales volume in economic downturns. The decline in U.S. housing construction (beginning in 2006) provided an opportunity to develop and test four hypotheses predicting the attributes and marketing actions associated with successful companies supplying housing markets. Smaller firms and those producing made‐to‐order products were most likely to have realized increased sales volume. These successful firms were not engaged in several marketing actions hypothesized to increase sales volume in a declining market. Small firm competitiveness was based more on working closely with customers to produce fully customized products.

A spreadsheet-based decision support system for wood panel manufacturing

Abstract Wood paneling manufacturers face a number of complex decisions when trying to allocate production resources and combine various raw materials to meet production goals. While various linear programming formulations for this problem have been proposed, these models are often difficult to use and maintain for real-time decision making in a dynamic shop floor environment. This paper describes an MS Excel-based decision support system for wood panel manufacturing. The system is easy to use and maintain yet gives shop floor personnel access to powerful optimization capabilities useful for fine-tuning production processes in the face of changing supply and price situations.

Mass customisation of wood furniture as a competitive strategy

The existence of some segments of the US furniture industry is threatened by imports from offshore countries. Mass Customisation (MC) is discussed as a competitive strategy for US furniture manufacturers to offset their intrinsic production cost disadvantage. Examples from four domestic furniture industry subsectors are used to propose a possible correlation between the level of product customisation (MC) offered and their success in the market. The US kitchen cabinet industry was found to offer the highest level of MC of all subsectors analysed. Interestingly, at the present time, the kitchen cabinet industry is not heavily affected by offshore imports. The wood household furniture industry, on the other hand, was ranked last in regard to MC and was also the one most heavily affected by offshore imported furniture. The study indicates that MC can be used as a successful business strategy for domestic producers competing with low-cost offshore manufacturers.

Trends in the US hardwood lumber distribution industry: Changing products, customers, and services

Efficient and effective supply chains are the backbone of any industry, including the forest products industry. As the US secondary hardwood industry has undergone a profound transformation and large parts of the industry have moved offshore, the supply chain is adapting to these new realities. Remaining and new customers of US hardwood lumber distributors tend to be smaller and likely have a wide variety of unique needs and expectations. A survey conducted in the fall of 2008 of distributors of hardwood lumber assessed the sourcing needs and perceptions of the industry and describes the status of the industry as of 2007. The findings suggest that the US hardwood lumber industry is adapting to the new realities brought forth by the globalization of markets and slowing housing markets. Almost half of the respondents indicated that their average customer in 2007 was smaller than the average customer in 2003, and 75 percent of respondents indicated that the average order was smaller in 2007 versus 2003. To accommodate their customers, distributors added a plethora of new services, with provision of certified products being the fastest growing. Overall, the study depicts an ongoing transformation of the US hardwood lumber supply chain, where distributors are well positioned to meet the exacting specifications of numerous small and customized manufacturers.

Impact of human error on lumber yield in rough mills

Abstract Rough sawn, kiln-dried lumber contains characteristics such as knots and bark pockets that are considered by most people to be defects. When using boards to produce furniture components, these defects are removed to produce clear, defect-free parts. Currently, human operators identify and locate the unusable board areas containing defects. Errors in determining a defect and its location, known as operator error, lead to lower lumber yield and increased product cost. Technology exists that would alleviate these problems and is a viable option to avoid wasting lumber because of human error. This study was performed in a rough mill collecting data on the errors made by humans when marking defects. Computer-based simulation tools were used to assess the significance of these errors. It was found that three-quarters of the decisions made by human operators are erroneous in some way resulting in an absolute yield loss of approximately 16.1%. Thus, automated defect detection systems that perform more accurately than do humans could have a payback period of 1 year or less.

Lumber yield optimization software validation and performance review

Abstract Exhaustive search algorithms in simulation models are used by the secondary wood industry to find the optimal cutting pattern to cut lumber into dimension parts. Finding the optimum cut-up solution is of paramount importance to the industry for controlling product costs. For this purpose, the USDA Forest Service created the ROugh MIll RIP-first simulator (ROMI-RIP), a simulation model providing near optimum lumber cut-up solutions. However, ROMI-RIP was never truly validated nor was its performance directly proven. This study used data derived from a state-of-the-art rough mill to validate the program and to show its performance. Results show that ROMI-RIP outperformed the rough mill by more than 7% yield (71.1% versus 64.0%). Manufacturers of solid-wood products can realize significant yield gains by using ROMI-RIP. Additional benefits include lower production costs and significant savings in raw materials.

Attitudes of U.S. Retailers Toward China, Canada, and the United States as Manufacturing Sources for Furniture: An Assessment of Competitive Priorities

Abstract While much has been written regarding the declining global competitiveness of U.S. furniture manufacturing and the subsequent loss of domestic market share and jobs, less is known about the role of retailers in furniture importing. This study investigated the attitudes of U.S. furniture retailers toward China, Canada, and the United States as manufacturing sources for residential furniture and their perceptions of consumer interest in country of origin for furniture manufacturing. The study was based on a nationwide survey in 2005 of the membership of a large U.S. home furnishings trade association. Over half of the retailers surveyed indicated that they did not always know where the products they sold were made; but many consumers were asking about the country of origin of furniture products. The “halo effect” associated with preference for home country described in previous country or origin studies was confirmed in this study, but in a situation where the domestic source had already lost much of its market share. Low price was the only attribute for which China was rated higher than the U.S or Canada, reinforcing the “China price” phenomenon discussed in the literature. Adjusting for the halo revealed several opportunities for U.S. and Canadian firms to compete in the U.S. wood furniture market on non-price factors. Those retailers sourcing furniture from China were found to have more favorable perceptions of Chinese goods than those not sourcing from China; although both groups had equally favorable perceptions of the U.S. as a furniture source. Priorities for competitive strategies for manufacturers in each source country are noted based on the findings.

Linear programming and optimizing lumber quality composition in secondary hardwood dimension mills

Abstract Linear programming has been widely applied in the secondary hardwood dimension manufacturing industries to solve the least-cost lumber grade mix problem, which refers to the search for minimal raw material costs. Most existing models are based on the assumption of a simple linear relationship between lumber grade mix and yield. However, this crucial assumption has never been verified. In this study, the results from a five-factor mixture design statistically proved that none of the cutting bills tested has a simple linear relationship between yield and different lumber grade mixes. It was observed that cutting bill characteristics and lumber quality affect the relationship between yield and lumber grades. Cutting bills that require wider and/or longer parts tend to behave non-linearly. In addition, the more dissimilar lumber grade qualities that are processed, the more likely is the occurrence of a non-linear response. The inability to predict the relationship between yield and lumber grades, coupled with the high percentage of non-simple linear relationships observed in this study, brings into question the validity of the linearity assumption applied in previous linear programming models. Further efforts are needed to construct a new least-cost lumber grade mix model that does not rely on the assumption of a simple linear relationship between lumber grade mix and yield.

Using Value Stream Mapping to Analyze an Upholstery Furniture Engineering Process

This study presents a systematic approach of streamlining an upholstery furniture engineering process based on a case study in one of the largest export-oriented furniture manufacturers in China. T...