PONTE VEDRA, Fla. - The business outlook for kitchen cabinets shows continued optimism for the next few years, according to economic projections from leading experts in attendance at the Kitchen Cabinet Manufacturers Association's spring meeting. Almost 200 people, representing more than 70 cabinetry firms and related organizations, converged on Ponte Vedra, Florida, for the annual event.
Tom Morrison, CEO of Metal Treating Institute and Tom Morrison & Associates, kicked off Monday's session with "What's Your Uber." Uberization, the business model under which customers contact directly with the supplier for services, usually with mobile technology, is fast becoming the number one fear of most business leaders, Morrison said.
Morrison's presentation detailed some of the dynamic forces causing uberization, including a look at why it happens and the places it occurs. His advice to the audience: Focus on what you can offer customers that they can't do for themselves. Become even more customer-centric by providing a wow factor, maximize the value of your products and invest in "smart" technology and other innovations. Morrison also encouraged companies to automate as much as possible due to projected increases in the minimum wage and a lack of skilled workers.
Alex Chausovsky, consultant with ITR Economics, next provided a look at short-term and long-term economic forecasts and the impact on the cabinet industry. The company is projecting the U.S. Gross Domestic Product to reach 2.9% in 2017 and 2.2% in 2018 before dropping to 0.9% in 2019. "If you don't raise your prices this year, your margins will be decimated," he cautioned.
Chausovsky also advised KCMA members to use the growth period to add new product lines and make sure employee training and retention programs are "top notch." "Focus on improving your business despite what’s going on in the political landscape," he added.
Capping off the day's discussion was Rachel Jones, director of Energy and Resources Policy, National Association of Manufacturers, who provided KCMA members with insight into the political landscape and its impact on the industry.
Tuesday's discussion on formaldehyde and foreign competition also attracted a lot of discussion. Leading off a panel of speakers was "Factory Man" John Bassett III, chairman of Vaughan-Bassett Furniture Co. Bassett spearheaded the bedroom furniture antidumping petition against China, which the American Furniture Manufacturers Committee for Legal Trade won in 2004. That victory helped spur a resurgence and pride in U.S. furniture manufacturing.
Also of importance to wood products manufacturer are environmental regulations, including the EPA's Formaldehyde Rule. Mark Duvall of Beverage & Diamond Law Firm and Erik Winchester of the Environmental Protection Agency reported on the Formaldehyde for Composite Wood Products Rule. Challenges for cabinet manufacturers include: ensuring supplier compliance, recordkeeping and labeling issues for cabinet manufacturers, and the obligations and exemptions for laminators of composite panel products.
Erik Winchester, Branch Chief, Fibers & Organics Branch at EPA shared with attendees two important updates to the rule. Composite panels and finished goods that are labeled in compliance prior to the Dec. 12, 2017, deadline will also be considered compliant once the deadline is in effect, thereby resolving what would have been a major supply chain issue for manufacturers. Winchester said during the conference that EPA will amend the rule so composite wood products or finished goods that are manufactured/imported before the deadline will be considered compliant. Also, he added, EPA agrees with KCMA's determination that the non-complying lots provision should not apply to the finished goods fabricator.
The next major event for KCMA is the Annual Management Conference, Exhibition & Plant Tour, scheduled for Oct. 14-17 in Louisville, Kentucky. In 2018, KCMA’s 63rd Annual Convention & Leadership Conference will take place April 21-24 in San Diego, California. For additional information visit KCMA.org.
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