Though Burns Wood Products lost furniture business to outsourcing, it still managed to increase its overall sales last year by targeting new markets.
Bill Burns, a veteran of North Carolina's residential furniture market, started a curved plywood plant 25 years ago to cater to that industry. His company, Burns Wood Products in Granite Falls, NC, sold table rims, drawer fronts and the like to the major players in the industry, including Ethan Allen, Hickory White, Bernhardt and Broyhill.
The furniture industry, much of which is located in the surrounding North Carolina mountains, prospered, and so did Burns, growing from three employees in 1980 to 35 in 1995. He brought two sons into the business, Shannon, as vice president of manufacturing, and David, as vice president of sales and marketing.
And then, in the late '90s, came imports.
Burns Wood Products' large furniture customers found they could have plywood components, and sometimes entire pieces or lines of furniture, made cheaper in China than in the United States. It took a big bite - more than $1 million last year - out of the company's annual sales, says David Burns, the family's spokesperson for this story.
Burns Wood Products would build samples for customers, Burns says, and "they would ship it overseas to be made. It took us two furniture markets to figure out what was going on."
He points to one major furniture customer who, four years ago, bought $1 million in parts from Burns Wood Products. "This past year, it was $400,000."
But here's where the company's story departs from the expected. In spite of the loss of sales to China, Burns Wood Products increased overall sales last fiscal year by 28 percent, to $6 million.
How did the company do it?
By seeing the handwriting on the wall, says Burns, then diversifying the company's product mix so it no longer relied heavily on residential furniture. "We're branching out," he says. That has required a considerable investment in high-volume equipment. "We spend our money smartly. We think about it and see if we need it."
Burns Wood Products had always diversified on a small scale. "We made some of the first snowboards," Burns recalls. "We always have tried to bring new product mix in."
But, he says, "It didn't become a necessity until five or six years ago. It was in '94-'95 that we first discussed getting [CNC] routers to be able to move into different areas."
In 1996, the company bought a Thermwood five-axis CNC router, and two months later added a Shoda three-axis CNC router with four heads, four piggy-back routers and two beds.
To accommodate the Shoda router, Burns says the company had to add 10,000 square feet of space, raising the cost of its investment to $900,000 and boosting square footage to 40,000. The company continues to cater to the high-volume contract business by continuing to buy newer machines, including a C.R. Onsrud five-axis router, making its own specialized equipment, taking a cell manufacturing approach and inventorying some products for large customers.
The company figured it needed larger, faster and more flexible machinery, as it targeted what was to become its biggest market: the contract furniture industry. "It's a high-volume business," Burns adds. "You've really got to be able to move fast."
Now contract furniture, including office furniture and stadium seating, accounts for the biggest share of company sales - 45 percent - contrasted to residential furniture's 40 percent.
The remaining 15 percent is a varied mix that over the years has included everything from wooden soles for women's high-heeled shoes to coffin lids. There are mountain boards, the skateboard-like devices sports enthusiasts use to slide down mountains, and water skis.
There also are parts for kitchen cabinets and hot tubs, skateboards, magazine racks and calendar holders. The company's Web site, www.burnswoodproducts.com shows some of the mix.
Burns Wood Products produces approximately 1 million pieces in a year's time, for 1,000
Customers present their designs and Burns determines how they can be made, from a simple seat back for an upholstered chair to a chair arm that looks cantilevered, leaning out from its base to give extra arm room. It is machined using the Shoda and a jig made in-house. "They'll give us their idea and we'll make it a reality," Burns says. Plans come in, he adds, on everything from a napkin to a 3-D model.
Burns Wood Products machines 85 to 90 percent of the items it handles, drilling holes where metal parts of chairs will be attached, even stamping in the grommets or T-nuts that will hold screws.
Customers do not want the labor costs of machining, and that includes residential furniture manufacturers who used to produce their own curved plywood, Burns says. "Now all they do is assemble and box."
Burns Wood Products looks to its equipment investment to keep its own labor costs down. With a new 30kW generator bought this year from Radio Frequency Services, a press can run 12 pounds in the same amount of time it formerly ran less than six, says Production Manager Randy Lowder.
Lowder says Burns Wood Products has what is one of two computerized split saws he knows of in the industry. It is an S.F. Kilde vertical gang ripsaw that the company uses to cut up to 16 pieces at a time. Before it was bought, Lowder says, one end of a panel of curved plywood had to be squared off with a bandsaw, then the remaining cuts would be made one at a time with a variety saw.
The C.R. Onsrud five-axis router is used for diagonal boring of certain curved objects, like an office chair back that follows the contours of the body. When he wants to install a new jig, operator Ismael Ibarra flips to an illustration in a book he keeps handy. By matching grid lines on the illustration and the steel bed, he says he can set up the machine in a minute's time.
The company was so impressed with the C.R. Onsrud vacuum table and its grid that it built a similar table for the Shoda. Instead of the steel plugs that, when closed, concentrate the C.R. Onsrud's vacuum pressure in one area, employees made their own plugs of plastic.
Burns Wood Products recently bought a used Cemco widebelt sander to pair with an existing widebelt sander. The raw plywood chair arms have to be sanded on both the inner and outer edges, so one sander is used for the first edge, then an employee flips the arm over and sends it through the second sander for the final pass.
The Shoda is used for "round-overs," the curved upper surface of chair arms. Some of the other machines used in the plant include an Oakley lever stroke sander, a Suddreth-Fletcher mould sander and multi-head boring machine, an S.F. Kilde edgemill for smoothing and inserting grooves, a Cemco multi-head boring machine, Bell miter saws and a Challoner tenoner.
David's brother, Shannon, made a trim station by combining four DeWalt miter saws to trim both right and left chair arms.
Several boring machines and trim saws are dedicated to producing a single part in high volume. "They're set up for that one part and that's all they will ever run," Burns says.
Machines for boring, trimming and shaping are either put on wheeled carts or made easily transportable by forklift. That way, they can be used as part of Burns Wood Products' labor-saving cell manufacturing. A Stafast T-nut or grommet-insertion machine, for instance, will be placed near the C.R. Onsrud router, so that an operator can stamp in T-nuts while he waits for the router to finish its run. While the Thermwood completes its run, its operator will be busy trimming chair arms on a dedicated machine rolled nearby.
Burns Wood Products is willing to accept the tight schedules imposed by the contract furniture business. Though lead time is usually six weeks, the plywood company keeps on hand an ample supply of the completed pieces that its largest customers need most frequently, for just-in-time delivery.
If its largest customer calls at 11 a.m. for one of those parts, "we'll ship it out by 2 p.m.," David Burns says. That forces the company to hold more inventory, and in turn, Burns Wood Products forces its suppliers to do the same. But Burns sees it as a hedge against contract furniture customers following residential furniture to China.
"The only thing that saves us is that they operate on shipping a finished product in 24 hours," he says. They cannot order their parts from overseas and at the same time keep inventory costs down, he adds.
Burns Wood Products is on track for another year of substantial sales growth, with sales for the first seven months of the fiscal year up 14 percent. The company, with 65 employees counting office staff, has not had any permanent layoffs in a region where furniture plants are shutting their doors right and left.
Burns gives credit to the equipment for attracting their present customer base. Counting purchase of new machines and adaptive parts, Burns Wood Products has spent about $125,000 in the current fiscal year. In fiscal year 2004, when it bought the C.R. Onsrud router, it was $300,000.
The equipment, plus American ingenuity, has given the company considerable flexibility. "We can press things as thin as one-eighth of an inch, and can go up to 4 inches thick," Burns says.
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