W&WP March 2002
Wood-Mode Deals a Winning Strategy
Inherent to Wood-Mode Inc.’s marketing strategy is its decision to remain loyal to dealers by not selling its products through nationwide home centers.
By Karen M. Koenig
Too often these days, the terms “loyalty” and “business strategy” are at opposite ends of the spectrum.
But not at Wood-Mode Inc. Nestled in the little town of Kreamer, PA, this custom cabinet giant has built a 60-year legacy based upon loyalty — to its dealers, its workers and to its customers.
And it’s paid off. In the last decade alone, Wood-Mode increased its sales by 200 percent to approximately $180 million, while simultaneously doubling its employee size to 1,700 persons, 1,475 of whom work in the factory. Currently, Wood-Mode produces an estimated 1,600 units per day of kitchen and bath cabinets, as well as cabinetry for other rooms.
The company offers two lines of cabinetry, Wood-Mode and Brookhaven, both of which are available in full lines of frame and frameless construction. (See sidebar.) Because it is a vertically-integrated company, Wood-Mode maintains complete quality control over its cabinetry, from processing of the green lumber, to the delivery of finished products in its own vans.
Wood-Mode is also unique in that it sells 90 percent of its product through independent dealers, with the remaining 10 percent of cabinetry sold through contractors/home builders. Remodeling accounts for approximately 75 percent of its business today.
Successful Sales Strategy
“The national home center chains have done a great job in providing mass exposure awareness of factory-built cabinets,” says Larry “Bud” Arbogast, vice president, sales. “But that’s not necessarily our type of customer.”
“We’ve always taken the position that we don’t want to be at a stock cabinet price point,” Gronlund adds. “It’s very competitive, oftentimes with low (profit) margins.” Wood-Mode, he says, instead focuses its efforts on producing customized factory-built cabinetry in both its high-end Wood-Mode and mid-price range Brookhaven product lines.
Dealer loyalty also played a crucial role in the decision. “We ran the risk of competing with a long, loyal list of our established dealers, some of whom have been with us for more than 20 years. We thought that that was more of a risk to us than not being in the home centers,” Gronlund says.
The strategy has paid off. Today, approximately 800 dealers throughout the United States sell cabinetry made by Wood-Mode. Overseeing the dealerships are 18 independent representatives retained by the company.
“In determining our future growth strategy, we look at market by market demographics — population, age, retail sales, household income and buying power index,” Arbogast says. “We also look at the new construction and remodeling trends of each market and take the maturity of the market into consideration. We then have regional strategic market planning and sales forecasting sessions to establish shared sales expectations and how they will be achieved.”
“We almost encourage dealers to handle products in every price point,” Gronlund adds. “That way they can attract all types of customers into their stores. So even if someone is not coming into the store specifically for our cabinetry, they are still getting exposure to our products and may decide to go for higher-end cabinets now or at a later date,” Gronlund says.
Wood-Mode supports its dealers through extensive advertising programs. The company also provides a marketing development fund to each sales representative for regional promotions, advertising and merchandising. Tie-ins are made to corporate advertising programs whenever possible, Gronlund says.
An emphasis is also placed on providing training for all dealers. “We’ve been running a fairly extensive school for 30 years,” Gronlund says. Under the direction of Don O’Connor, the CKD-accredited education programs focus on design and product development/awareness.
“It can be something mechanical in nature, like a full extension drawer slide for the Brookhaven line, or a hinge upgrade. Or that we now offer a new door style in three colors, or three new door styles in one color,” Gronlund explains.
New this spring, for example, will be stainless steel doors and drawer heads for accents in the kitchen. Samples will be available at Wood-Mode’s hospitality suite during the K/BIS show in April. Production of the metal parts will be outsourced.
“We’re always adjusting and shifting our products,” Arbogast says. “We follow the trends from Europe and from the color groups. We also listen to our dealers’ input, which they get from architects and designers. We’ll start out with the suggestions and needs that are most critical and work our way down.”
Customization is Key
For example, in response to requests for a greater mix of mouldings and trims for its high-end Wood-Mode custom cabinetry, the company now offers a complete line of Enkeboll architectural wood carvings. Wood-Mode can also machine custom turnings in-house.
A fully-customized finishing package is also available in addition to its line of distressed, opaques, heirloom, cottage and vintage finishes and stains. Wood-Mode has a paint lab on-site and can match any custom specifications.
The customization process doesn’t stop there. Customers can choose from a variety of door inserts ranging from lattice and glass to rattan, laminate, or veneer. “We can hit any design or thought that people want,” Arbogast says.
The ability to match finishes, door styles and other elements to living room furniture has increased Wood-Mode’s “RoomScaping” cabinetry production to 15 percent of its business. With the variety of options available, Arbogast predicts this segment will increase even more in the near future.
Construction Makes the Difference
“We don’t try to separate them on quality,” Arbogast says. “Also, whether frame or frameless, customers have certain expectations which we have to meet.”
One of these expectations is turnaround time. Although the company produces rails, stiles and door panels for stock, cabinetry is built on a just-in-time basis. Wood-Mode Inc. typically offers a 6 to 7 week turnaround time on its Brookhaven products, and 8 to 10 week turnaround time on the Wood-Mode line. Highly customized projects, or those involving the formulation of a new finish, may take longer.
Another expectation involves product quality. At Wood-Mode, this begins in the redesigned, 10-acre lumberyard and new 25,000-square-foot lumber processing facility.
Wood-Mode works with approximately 30 vendors to supply the cherry, maple, oak and pine used in its products. Although the lumber is graded when it comes in, Wood-Mode recently instituted its own grading and sorting system for internal use.
Inside the lumber building, a new 160-foot Mellott System grading line is equipped with an electronic eye to “read” the width and length of the boards. An automatic turner flips the board, enabling the operator to examine both sides for any defects. “He then enters the information into the controller, which marks the boards with chalk lines signifying their grade determination,” explains Bob Gessner, plant manager.
The lumber is then brought to a new Automated Lumber Handling system for sorting by grade and length. “This system can handle 50,000 to 60,000 board feet per shift, compared to the old system which could only handle 22,000 to 25,000,” Gessner adds.
A bar coding system tracks the raw lumber for inventory purposes. Wood-Mode bases its inventory on the projected order rate. In February, for example, the company had approximately 2.6 million board feet on hand.
Wood-Mode also does its own lumber drying. It recently invested in three American Wood Dryer computer-controlled kilns, and plans to purchase additional kilns in the near future.
According to Gessner, the lumber area coordinates its schedule with the rough mill area. Thus, the kiln-dried lumber can be moved through production in a timely manner.
In the rough mill facility, a Mid-Oregon lumber optimizer works at speeds of up to 150 feet per minute to scan and mark the boards for defects. The boards are then sent to a GreCon optimizing saw. The saw optimizes its cuts based on the defect location and cutlists. According to Gessner, an average of 230,000 to 250,000 board feet per week are run through this plant. “Some months we’ll run close to 1 million board feet, depending on the job orders,” Gessner says.
A recent addition to the rough mill facility is a Weinig Hydromat moulder which is used alongside five older Weinig moulders. “We purchased the Hydromat to help us keep up with capacity. It also maximizes set-up time,” Gessner says. “All our moulders are versatile; they’re not dedicated to just one profile. When you have machines dedicated to just one profile, you run into the problem of not being able to meet demand on one machine, while others are sitting idle. We have to be ready to meet any changes,” Gessner adds.
Although the assembly plants work on a JIT basis, the rough mill area produces parts for internal inventory.
To produce the panels, strips are glued together and clamped on a Taylor clamp carrier. Cut as a square blank, the panels are processed on a Tagliabue shaper/sander. Interior stiles and rails are made on a custom-made machine.
Doors are then assembled with interior stiles and rails. In the panel plant, a Tagliabue combination machine shapes and sands outside profiles in one pass. The machine is capable of machining multiple profiles.
“Up to this point, there is no difference in the construction of the doors between frame and frameless,” Gessner says. The differences come into play in the case construction. The boxes used in Wood-Mode’s framed Design Group 42 are made of furniture-grade plywood. Particleboard is used to manufacture the boxes in the frameless Design Group 84 line. A slightly thinner particleboard is used in both Brookhaven I and II lines, although the framed Brookhaven II does offer plywood as an option.
To produce the veneered panels, a new Sennerskov veneer hot press runs in 8-hour shifts, laying up two 8-foot panels simultaneously. Two Black Bros. presses apply vinyls and other overlays onto the panels.
The company recently replaced an older Holzma panel saw with a new Holzma HPP11 Profiline for cutting panels and box components for stock inventory. “Because of the increased speed and efficiency, we were able to cut this machine down to one shift,” Gessner says.
An older Giben angular panel saw is also used to perform ripping and crosscutting of large panels. Gronlund says the company plans to purchase another panel saw within the next few years.
Once the panels are cut to size, they are sent to one of two older Morbidelli point-to-point boring machines for 32mm drilling. A brand new Morbidelli feedthrough boring and doweling machine, purchased from SCM Group, will be in the plant soon and replace one of the older machines. According to Gessner, this new machine will give the company additional capacity and faster setup. “We’ll keep one of the older ones for added versatility and flexibility,” he adds.
In the assembly plant, framed cabinet boxes are mortised and tenoned and doors are added. The frameless boxes are run through a recently purchased Morbidelli Author 504 boring machine, then assembled with the doors in place.
Edges are banded on a Homag single-sided edgebander, recently purchased from Stiles Machinery. Another new edgebander, an IMA single-sided machine which the company purchased to improve setup time on custom banding operations, is located in the custom panel operations building.
For the Wood-Mode line, the multi-step finishes are offered in stain, opaque, light heirloom, dark heirloom, black heirloom, cottage, vintage and physically-distressed low sheen, in a wide variety of colors. On Brookhaven cabinetry, a baked-on sealer and catalytic varnish is applied over the stain.
Finishing materials are applied by Kremlin spray guns. Wood-Mode also uses both a Cefla flatline finishing system and Berkmann custom color finishing system. According to Gronlund, the company is planning upgrades to its finishing area in the near future.
“You have to constantly improve — sell the sizzle,” Gronlund says. “Our goal is to make sure we continue to have the high-quality look people want.”
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