The Furniture Manufacturer

The family owners of a respected furniture brand (Janda) were finding their manufacturing business increasingly competitive and difficult to manage. They had taken over the business in good shape in the mid 1990s and were determined to improve its performance. Unfortunately, high labor costs and competition from imports frustrated their efforts. So, in 2001 they had a good look at their business. There were approximately 60 designs, one major customer and a host of smaller customers, increasing pressure to deliver "new" designs to customers to offset the long lead times that were endemic in the industry, and working hours that were steadily increasing without any parallel increase in business profits.

They also looked at what they did really well and generated loyalty among their key customers. They found this was a combination of their family business values, their focus on helping the retail salespeople sell more products, and the knowledge they had developed in all the facets of furniture design, materials and components sourcing, manufacturing and distribution. So, the question became "What do we focus on to give us a major competitive advantage over the rest of the industry?"

Through a simple business focusing process, the directors determined that concentrating on just two priorities should allow them to develop a significant advantage over their competitor: 1) help their customers (the retail stores) improve their selling performance, and 2) reduce the lead time for supply to come in under their competitors.

By focusing on these two priorities the family tripled sales and quadrupled profits between September 2002 and May 2005. In the process they cut their product range by 60%, optimized production between local manufacturers and international sources, focused the whole company on providing extreme value to specific end customers, and made a few key pieces of information available to the supply chain to increase overall supply chain performance. Achieving these outcomes had involved simplifying key elements of the business.