Atypical best describes OFM, Inc. At a time when zero product inventory is the norm, the office and educational furniture supplier instead maintains more than $4 million in finished goods inventory, ready to be drop shipped the next day to customers throughout North America.
It is a strategy that has worked well for the Holly Springs, NC-based firm. Founded in 1995, OFM has had 17 continuous years of growth contracting with OEMs in Taiwan, China and Mexico for its products, says Abel Zalcberg, company founder and chairman of the board.
“In the beginning, it was a matter of balancing the dollars and costs,” he says of the decision to import products and not produce domestically.
That situation is slowly changing with the recent addition of OEMs in North Carolina to manufacture the company’s new profile tables and tops for mesh base conference tables, says Blake Zalcberg, CEO. However, he adds, OFM continues to maintain close relationships with its foreign manufacturing partners.
“With the globalization of the economy, it’s foolish to close any doors.”
To ensure the manufacturing quality of the furniture and accessories, OFM implements strict control measures, both overseas and domestically. According to Blake, 5 to 10 percent of all product brought to OFM’s 124,000-square-foot warehouse facility in North Carolina is routinely checked for overall quality, tolerance and consistency.
“The brand is OFM and we have exclusive rights for the items,” Abel says of the company’s strict standards for its products.
OFM offers 33 categories of products, including: chairs, cubicles, tables, desks and accessories, as well as GREENGUARD certified items. According to Blake, an estimated 3,600 SKUs are maintained by the company.
“We proactively purchase product to ensure we have everything in stock,” adds Barbara Zalcberg, president and co-founder.
In determining the company’s inventory, Abel says OFM has devised a purchasing formula based on the lead time on the water, plus the lead time for the manufacturer and usage for that period. “For usage, we will generally use historical sales data, plus a minimum of 20 percent growth to factor inventory levels,” Abel says.
“The niche [we have] defined, and what has led to the success of our company, is being able to ship so quickly,” he adds of the company’s one-day turnaround standard on orders, which are shipped from OFM’s operations in North Carolina and Arizona.
While the company exhibits at trade events, including NeoCon and the National School Supply Equipment Assn., a majority of OFM’s products are only available for viewing online or in catalogs. Even so, the company’s return rate on products is under 1.5 percent.
“It never ceases to amaze me the number of products ordered without people seeing or touching them,” Barbara says.
To help the decision making process, OFM hosts a number of product videos on its site, OFMInc.com, highlighting the features and options available.
Brand new is the use of 360-degree spin images, a rich media capability that OFM offers in conjunction with Shotfarm, a product content network. In addition to the multi-angle capabilities, the platform allows for zoom and pan views, and swatches.
“We’ve built a loyal base of customers because we live by the creed of making it easy to do business,” says Barbara. “We want our customers to remain customers.”
Abel agrees. “If someone is lasting a long time in this business, it’s because they’re doing something right.”
Another thing the company does right, he adds, is the treatment of warranty orders as if they were new orders. Attention to details such as this has resulted in “an explosion” of consumer confidence, he adds.
A socially responsible company, OFM is one of few in the wood products industry that is also completely carbon neutral.
In 2010, OFM installed a 250-kilowatt solar photo-voltaic system, made up of 1,042 solar panels on the roof of its headquarters. The solar farm generates approximately 322,500 kilowatts of energy each year, which OFM, through its sister company ABCZ Solar LLC, sells for 18 cents per kilowatt to Progress Energy, a Raleigh-based power company.
According to Abel, OFM is in the process of installing a second 1,042 panel solar farm, to be completed by the end of 2012. OFM’s solar farm is part of Progress Energy’s SunSense Commercial Solar PV Program. The initiative, inspired by the North Carolina General Assembly, mandates Progress Energy attain 12 percent of its power from renewable resources.
In addition to making good business sense for the company, “it’s the responsible thing to do,” Barbara says.
Other sustainable measures taken by OFM include the conversion of all warehouse lighting to LED, and the inclusion of GREENGUARD certified products in its lines.
Knowledge Equals Power
Another way in which OFM separates itself from other companies is in its employee empowerment efforts.
Available to all of the company’s 33 employees, “OFM University” offers classes and lectures on cross-training opportunities and on how the business operates. Class topics run the gamut, including: product sourcing, development, retirement planning, business management and photography/graphics.
According to Blake, OFM University is part of the company’s Ownership Thinking initiative, designed to build morale among employees and encourage them to be active participants in the company’s success. Classes are held as lunch-and-learn programs or after hours, to accommodate employee schedules.
“The more people know and learn, the more they grow. It instills a level of confidence in our employees, which will also help improve the overall customer experience,” Blake says.
“I am a big believer that success in the past does not guarantee success in the future. We’re constantly looking for ways to improve,” Blake adds.
Also not content to rest on the laurels of OFM’s success, founders Abel and Barbara continue to diversify their interests. In addition to solar energy firm ABCZ Solar LLC, the couple also owns land development company ABCZ Properties LLC, charter jet firm Fly Private LLC and Hurricanes Investment LLC, an ownership partner in the Carolina Hurricanes NHL hockey team.
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