By adapting quickly to new challenges and focusing on customer satisfaction, OFS Brands is formulating a highly successful business strategy.
|OFS Brands specializes in business and healthcare furniture. Its current business is split about 70 percent commercial and 30 percent institutional customers.|
"I think to be a trendsetter, you have to be doing enough right that other people are watching what you are doing and trying to mimic you," says Mike Wagner, senior vice president of sales and marketing for Huntingburg, IN-based office furniture manufacturer OFS Brands. "That to me is being a leader or a trendsetter."
OFS Brands seems to be doing "enough right." The company, which employs almost 2,000 people, has grown every year since the mid-90s and has close to tripled its market share in the last three years. It also was recently named the winner of the Woodworking Machinery Industry Assn.'s "Commitment to Excellence through Technology" award for 2007, in recognition of the company's investment in technology over the past year. The family-owned OFS Brands is the parent company of OFS, First Office, Carolina and Styline Logistics. It re-branded itself last year, in part because of the acquisition of the 50-year-old company Carolina, which OFS Brands purchased primarily for its healthcare seating, and also a desire to provide a separate focus on its logistics program Styline.
"Styline Logistics is a full-fledged LTL carrier," says Wagner. "When you blend the manufacturing capability with the trucking component, I think you create a system that is very hard to duplicate."
According to Wagner, OFS Brands current business is split about 70 percent commercial and 30 percent institutional. "Between the OFS and First Office brands, obviously we cover commercial very well," he says. "Carolina is selling into higher education and healthcare as well."
One Piece at a Time
OFS Brands practices what the company calls one-piece flow manufacturing, which is an emphasis on single-piece manufacturing over batch production, according to Senior Vice President of Manufacturing Jeff Eckert.
"We are establishing one-piece flow manufacturing within our facilities with a special emphasis on producing any special or custom product that the customer requests," says Eckert. "We believe this flexibility is driving our phenomenal growth."
"One-piece flow is designing a system so that no material is put in what they call WIP (work in process) until there is an order for it," adds Wagner. "The value of one-piece flow is the one-to-one ratio. The customer orders it by the part. We are producing one part for the customerâs order all the way through to the process where they (the final product) get assembled, in a one-piece to one-piece ratio. So everything is built to order. Both Carolina and OFS do a lot of customs, even on the First Office side. I think if you are going to be a strong domestic supplier, you are going to have to be able to figure out how to provide customs. Anything that is produced domestically long-term, I think you have to have a system set up and products that are designed to have a wide variety of custom capabilities."
Eckert says that OFS Brands has invested nearly $16 million recently in new machinery and technologies, including a Bacci (Byrnes) twin 6-axis CNC center, six Weeke (Stiles) 555 CNC machining centers, Homag (Stiles) edgebanders, a WoodEye scanner and two Selco (Biesse) twin pusher panel saws, as well as SolidWorks, CAMWorks, DezignWorks and DriveWorks software. The company recently purchased a Bacci profiler, and also is anticipating future purchases of Heesemann (Stiles) sanders.
OFS Brands recently announced plans for an $81 million expansion, in conjunction with a partnership between the state and local government, with an economic incentive to grow jobs. The expansion, in essence, will include a large manufacturing facility, as well as an enlargement of the companyâs corporate headquarters.
"The manufacturing facility is going to be dedicated to expanding our flatline veneer press, and then there will be a large UV flatline finishing system," Wagner says. "What we committed to was 300 new jobs for Indiana. Last year we were at 37 or 38 percent growth, year over year. In reality, I think we can top 400 (new jobs) pretty easily."
|OFS Brands has merchandise showrooms in Santa Monica, CA; Chicago, IL; New York, NY; Dallas, TX; and Huntingburg, IN.|
Staying on the Cutting Edge
Although a fair amount of design is performed in-house, independent designers currently design 50 to 60 percent of OFS Brands' products. Wagner attributes this partly to keeping the company's designs fresh and preventing stagnation. The company also enjoys providing opportunities for young designers to enter into the industry.
"One of the ways we try to attract young talent is we have what we call a Hot Seat Contest," explains Wagner. âWe really target young designers who may be in school or just out of school. We give them the specifics of what we are looking for, like it has to be environmentally friendly or the primary material should be wood. We have them submit it and post it on the web, and then we allow them to come in and post comments and critique each other's designs. We try to time it with the opening of a new showroom or a major event. They get their royalties and we market the product so that they start building a name. Ultimately, what we are trying to do is to create a new breed of designers out there and to just continue to get fresh and interesting new ideas, because to break through in this industry is difficult."
The company also is trying to help the environment. One of its four core principles, in addition to heritage, integrity and customer focus, is environmental stewardship. OFS Brands owns nearly 10,000 acres of forestland throughout southern Indiana and Kentucky, and is a member of the American Tree Farm Assn. According to Wagner, the company buys wood from other suppliers as well, including some products that are FSC-certified, and some core that is formaldehyde-free.
"What is happening now is the masses are conscientious about making sure they are buying in a socially responsible way," says Wagner. "The suppliers are all reacting to this. So the finish manufacturers, in most cases, are already putting themselves in a position where they can supply things that are compliant for LEED certification. We are continuing to push our supply base there. We have invested in it heavily."
Wagner adds that customers are definitely asking for green, now more than ever. "It is getting to the point where if you don't provide the right answers to sustainability questions, you won't be considered for a project," he says. "It is definitely not a trend - it is a shift."
One emerging trend Wagner has noticed, in terms of overall construction and the way properties are developed, is customersâ demands for products that provide more flexibility in the workplace.
"They may want to have a private office that doubles as a conference room,â Wagner says. "They want to be able to make changes almost daily in a space to use it for different functions. So you have to have furniture that kind of moves, with different functionality."
|OFS Brands is planning an $81 million expansion, in conjunction with a partnership between the state and local government. The expansion is expected to add up to 300 new jobs.|
Rolling with the Changes
China's place in the office furniture industry has many fearful of its affect on domestic companies, but Wagner says OFS Brands is not worried. He recommends that companies should recognize China's existence in the industry and be comfortable with change.
"I don't look at China as competition; I look at China as a major opportunity to improve our value," says Wagner. "They can provide a value in the office furniture market that many domestic manufacturers cannot. So what we are all doing is racing to move our capabilities into an area that will be a value long-term; the speed, the flexibility, the customization, and the service and tailoring solutions. Understanding how to maximize the efficiencies of integrating products that may be sourced over in China, whether it be hardware or certain components, even some finished good materials, and how to integrate that into your overall brand strategy, is important. Carefully select areas where you know China is the right solution for your customer and move your business to an area where that solution basically supplements your brand, and you can surround it with a lot of custom capabilities."
Adapting quickly to such challenges, while keeping in mind the best interests of the customer, is one of the reasons for OFS Brands' success, according to Wagner.
"To be able to react quickly to customer change and have our eyes locked with a laser focus on our customer, when I think others might be focused on us, is an ideal arrangement," says Wagner. "When we take our eyes off the customer and we start looking at someone else, that means we have lost our leadership position."
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