W&WP May 2004

Hale Mfg. Co. conquers the recession by moving into a new facility and introducing new products.

Just over a year ago, a bookcase would make up to a 20-mile trek before Hale Manufacturing Co. was able to ship it to the customer. The process would start with the production of solid wood parts moving up and down and all around a century-old, four-story building in Herkimer, NY. The parts would, in some cases, then be trucked to a second building five miles away to be machined on a CNC center - then returned for sanding, assembly and finishing - before making a 9-mile trip to yet another building to be inventoried as completed, packaged goods.

To say the least, a 100-year-old building does not exactly make for the most time-efficient production processes. Yet, the 97-year-old company specializing in high-end bookcases and shelving units for schools, libraries, law offices and others somehow made it work.

"We were moving trucks and people around, and it was just too much," explains Jon Benson, vice president and general manager of the now Frankfort, NY-based company. "We had efficiency issues that just weren't going away with a four-story building. We would start it on the first floor and send it up the elevator to the rest of the floors, and then back down."

In 2000, Benson and his brother Jim, Hale president, decided the company was not going to successfully move into the future maintaining the status quo. They scouted out locations and found a spot in a newly opened industrial park at the foot of a hill in Frankfort - a far cry from the cramped space in the middle of Herkimer. Jim Benson said they bought the property from Herkimer County at "a great price and payment terms."

From drawing up the initial plans to installing the last piece of machinery, the new 80,000-square-foot facility took almost three years to complete. Wood Management Systems helped design the shop's floorplan as well as the financial feasibility study to start the project. The resulting consolidation into a one-floor, modern factory, plus the addition of several new key pieces of equipment, has greatly enhanced Hale's competitiveness.

"When we started with the consolidation, we went out for new business and went after custom work and tried to cultivate more of that aspect," Jim Benson says.

Hale's products are mainly marketed to office furniture dealers, which oftentimes end up going to schools and libraries. The company's bookcases and other storage and display cabinetry can be found in places like the University of Texas, Yale University, the National Archives and Saratoga High School (NY), the namesake of Hale's new case goods library line. Hale will introduce its Saratoga Series at NeoCon World's Trade Fair, June 14-16 in Chicago.

"We made a big step forward in just moving into one building," Jon Benson says. That big step has facilitated increased production and sales. As of December 2003, company sales were up 10 percent, he notes. In addition, prime costs including labor and material, have been reduced by 5 percent primarily due to no longer needing to move materials and personnel among three buildings. "All of that was wasted effort that did not add to the value of the product and did increase the chance of damage to either component parts or finished furniture," he adds.

The Saratoga Series, a new solid wood line of library case goods, is set to debut at the NeoCon World's Trade Fair, June 14-16 at the Merchandise Mart in Chicago. Pictured is maple with a clear lacquer finish.

Jim Benson explains that the labor costs have been reduced also in part to the decrease in sales of Hale's import line of KD wood veneer bookcases, and the increase of its domestic products, which are up 15 percent. "The efficiencies gained in labor costs in our new building, for the most part, were offset by increased production requirements. The change in our product mix allowed us to keep most of our labor force intact after the move."

Despite increased sales, the Bensons agree their new facility has not been fully tested yet. "We feel we could do 20 percent more business, and that is a conservative guess," Jon Benson says.

After about 13 months in the new plant, business seems to be taking off. "It was a balancing act, but we pulled it off in fine shape. We are settled in now and ready to go," Jim Benson says.

Battling the Recession
When Hale entered the planning stages for the new 80,000-square-foot facility, a strong, record-setting economy was about to burst. "We felt we could introduce new products and ideas of what direction we wanted to go in," Jim Benson says.

Then the country went into a recession, crippling many businesses and costing hundreds of thousands of people their jobs. That caught the Bensons' attention, but they decided to go ahead with their plans. "All the pieces (of our project) came together when the economy fell apart. But we decided to weather the storm. It was a gamble, but we chose to see what would come out of it," Jim Benson explains.

What the Bensons did not know was how long the recession would last, but fortunately for them and their company, they pulled through. "You think of a recession lasting maybe six to eight months, not two years. It got a little bit scary, but we are now where we want to be," Jim Benson says.

This version of the 200 Signature Series is done in birch with a light cherry finish.

In the recession, many companies began outsourcing more often, and even went offshore for production of parts or finished products. Jim Benson admits that Hale looked at offshoring during the economic downturn. "For some components, we did shop around overseas, but found that it was about the same; the price was not that beneficial," he explains. He adds that Hale utilizes at least a half-dozen stateside wood component manufacturers for specialized items, such as lumber squares, hardwood plywood panels - some machined, some as blanks - to Hale specs and domestic kiln-dried lumber.

Having already drawn up plans for the new factory, Hale took advantage of financial assistance and tax incentives offered by the state and local authorities. The aid helped the company battle its way through the recession.

Jim Benson says Hale applied for an industrial revenue bond, which he adds is a time-consuming process that has to go through several agencies for approval. The "very low interest rates" made the process well worth the effort, he adds.

Hale is also participating in New York state's pilot program, which offers companies reduced property taxes as an inducement to keep businesses and jobs. "New York gave us a lot of help," Jim Benson says.

While Hale prevailed during the recession, a few jobs were cut. "With the economic conditions we had to cut back a little. It would be nice to get back to what we used to be (65 employees)," Jon Benson says. Hale currently employs 60 full-time workers.

Hale is on its way back to its previous total as two employees recently have been hired full-time, one of whom is in training on the company's Weeke CNC machining center from Stiles Machinery.

Out With the Old
The 40,000-square-foot old production home was built in the late 1800s, and the village of Herkimer slowly built up around it, Jim Benson says. But with the growth of the town, came less space. Jon says when tractor trailers would unload at one of the docks at the old building, traffic would be blocked until they were unloaded. Today, the local community college uses the old building as additional residential housing.

Not only did the building create traffic problems, it also limited Hale's production possibilities. The company could not accommodate a customer who wanted furniture more than 84 inches because it did not fit in the elevator, Jon Benson says.

The office building in Mohawk, NY, measured 10,000 square feet and was about 5 miles from the main building. Because the old mill building did not have a sturdy concrete floor, the Weeke/Stiles Machinery CNC machining center was housed at the office facility.

The Richfield imported line, middle, has an anigre veneer. This 300 Series oak hutch, right, has stackable lateral files finished in a brown tone lacquer.

The last stop was a 25,000-square-foot facility in an industrial park in Little Falls, NY, about 9 miles away. Here, the furniture would be inventoried in Hale's Quick Ship program, a same-week, ship-from-inventory program. Jon Benson adds that the building was also used for storing some raw materials. Today, the shipping and packaging areas are in the same wing of the new factory, rather than being 9 miles apart as they once were. Hale still owns the building, but leases it out.

In With the New
"The move has been very positive. There is much more productivity in just moving to one building instead of three," Jon Benson says.

Jon Benson says Hale's average lead time has been decreased by about two weeks because there is no need for sending materials to different places. "It is so much more streamlined," he says. "We don't have people and production chopped up between three buildings; those impediments are gone."

One of the keys leading to this increased productivity is the floor layout. Machines are configured in a quasi-horseshoe shape, far more efficient than the four-story layout of old. In addition, tracks on the shop floor guide bed-roller carts carrying parts and products from workstation to workstation.

An unsung trait of Hale's new home is the docks. At the old facility, there were three docks. The new place has seven total-five outbound docks and two inbound, one for receiving lumber and one dock-height for receiving raw materials.

As Jon Benson explains, Hale "backed into" the new facility. By this he means once one part of the process was ready, they would move those employees to the new building to work there. He says they started with the first step, warehousing and office space, and gradually moved in reverse order of the production process. The only time work ceased was for two weeks when all the heavy machinery, most of which was moved by Hale, had to be relocated to the new building, he adds.

"Most everybody is excited about the move. There were some who weren't that excited, but sometimes change is hard to except," Jim Benson adds.

With the new facility comes a need for new, better equipment. Perhaps the most essential purchase Hale made was the Weeke CNC machine. "We have a CNC machining center and that has become a big part of what we want to do. In three short years it has become the most important piece of equipment in the shop. There is no more loading the carts, wheeling it around and taking it to another spot. It has eliminated a lot of work," Jon Benson says.

Jim Benson says the rough mill Hale now uses was purchased "at the eleventh hour." Hale uses a Barr Mullin and GreCon rip-first computer-assisted rough mill. All the spray booths are new, and bigger than the previous. Hale also bought a used Celaschi double-end tenoner from Danckaert, which will replace the Wadkin double-end tenoner now in use.

A Chiptec gassifier boiler, which heats the entire facility, and a Pneumafil baghouse filter were also purchased for the building. Despite all the new technologies, Hale keeps some elements from the past. Hanging in random spots around the shop are measuring gauges.

Benson says the company's next move is to look at buying another moulder for more specialized pieces and eventually a flat panel ultraviolet finishing system.

Even with all the new equipment, Jon Benson thinks production could be stepped up more than it is. "We are a little softer than we'd like to be, and it could be a lot easier."

"We were able to increase sales and in the last two years we came out with six new specialized items plus the custom work," Jim Benson says. "Our goal is to double sales in a five-year period."

With one year down, it seems Hale is on its way to that goal.