Sandberg Furniture has an interesting 85-year history, illustrated on the walls of its Los Angeles office. Unlike many well-known names in southern California furniture manufacturing, Sandberg is also working to make sure it has a future.
There are many challenges. Many similar companies making promotionally priced bedroom furniture have closed their doors; import competition is fierce. And costs are high and regulations oppressive for manufacturers in California.
Sandberg makes mostly bedroom furniture of any style in a certain price range. About 70 percent of sales are adult bedroom, 20 percent youth bedroom. Entertainment centers account for 10 percent of sales. Offering a wide variety of styles helps Sandberg compete with Chinese imports.
"We're always looking at every department, and every opportunity for the company to change what we're doing," says company president John Sandberg. "If there's a better way to do it, then we're going to look at it. And if it fits what we're going to do we're going to adopt it."
"Marketing isn't just about sales. You have to define what you can do for [customers], rather than trying to sell them what you've got," Sandberg says.
Sandberg was recognized by Woodworking Machinery Industry Assn. as its 2002 Global Marketer of the Year award winner.
"The export business is always a hedge against your domestic business," Sandberg says. "If domestic business goes down you've got some hedge. Ten percent export is a good number. It spreads your risk a little bit, and it also keeps you sharp; you're looking at opportunities.
"In Japan 10 years ago, they wanted a lot of things that didn't make sense to us. Now, over the years, we've made most of those changes." Sandberg also exports to South America and the Middle East.
Flexibility and responsiveness
Phil Sweet, vice president of manufacturing, says Sandberg has the ability to respond quickly to market trends such as style and color changes, in addition to flexibility in manufacturing. The product itself, customer service, delivery and relationships are all important.
"The name of the game is to make yourself competitive and at the same time profitable. We've been able to make better products today than we could 10 or 15 years ago, at lower prices," Sweet says.
"A lot of what Sandberg is very good at is knowing our customers," says Lori Letourneau, vice president sales. "We spend a lot of time understanding their business.
"I think that Sandberg has done a very good job of remembering who we are. I think a lot of companies that have gone out of business have gone into other directions too fast."
In China, Sweet says labor costs 50 cents an hour. In California, salary and benefits are about $22.
"The only offsets we have right now are efficiencies and materials. We have to get our labor content lower than their freight. Even if business slows up, those containers are not going to stop."
It costs $2,900 to $3,200 to ship a 40-foot container from Asia, and that cost is going up. Shippers can get 20 or 30 bedroom sets in a container, Sweet says. Over here, a bedroom set will take three or four hours of labor, including milling, assembly and finishing. At $22 an hour, that's about $80 a set. Sweet believes China will be dominant for 15 years, and Vietnam is coming on board.
"The competition has always been here, it's just a matter of where it's coming from. How do we become more important to our customers?"
Other challenges in manufacturing come from closer than China. California has high employee health benefits, high insurance rates, very high workman's compensation rates and city, state and federal regulations regarding air quality, storm water, OSHA standards, waste management, business permits, hazardous material handling and taxes.
One of the largest manufacturing gains has come, surprisingly, from v-grooving.
"Every hand you have to add to the product adds a lot of cost, particularly on the benefits side," Sweet says. "We look at the product and question how we make it."
The idea behind v-grooving was started in 1995. There are far fewer parts and steps along the way. Parts go from panel saw to boring to v-grooving. Currently, 65 percent of casegoods are v-grooved on Auto V Grooving AVG 72UM and LVG4SF 48-inch machines. V-grooving eliminates 20 percent of labor and 4 to 5 percent of materials.
"At that point, our product becomes much more competitive," Sweet says. "It gets us a spread for a whole set on the retail floor of as much as $100 or more."
Sandberg gets about 93 percent yield on its sheet stock. Sweet says new machinery provides those yield gains, but engineering and other functions have to be that much more accurate.
"If the goal is 93 percent and you're getting 88, you're causing a problem someplace. If you give away 5 percent, you've given your competitors an advantage."
Sandberg has four buildings with 300,000 total square feet in Vernon, an industrial suburb near downtown Los Angeles. The company buys particleboard and MDF, mostly from West Fraser Mills and Sierra Pacific and does its own paper and foil laminating on a Black Brothers TB-60 press line. Sweet says almost everything is made here, except for a few components, carved pieces, appliqués and hardware that are outsourced.
Basic product flow starts with laminating, then on to the panel saw, CNC routers and point-to-point machines, foilers and edgebanders, boring and dowel insertion, double end tenoners or v-grooving, dovetailing, finishing, assembly and transfer to finished goods.
Laminated panels are cut on two Schelling panel saws, an AL330/180 angular panel saw and an FL 430 CNC rear-loading panel saw. A Giben angular panel saw is used separately.
Cut panels are routed on two Shoda 516-2462 twin table CNC routers and a Shoda CNC shuttle table router. A Busellato Super Junior 60 point-to-point machining center and a Busellato feed-through boring and dowel insertion line are also used, along with a Delmac FAM feedthrough boring and dowel insertion center.
One Fletcher FT flat foiler and seven FM45 contour foilers are used for edge work, along with a Holz-Her Triathlon 1414K CNC single-sided edgebander with Doucet automatic panel return conveyor.
Other equipment includes a Multiscore panel gang rip saw, two Tyler dovetailing and boring centers and Nichols cleat cutoff and boring center.
The finishing line is a custom UV-cured 100 percent solid double roll coat, automatic spray and cure finishing line. The line, running since 1995, is another important manufacturing upgrade. Components are roll coated, everything is finished and then assembled.
The flatline can eliminate VOCs, but Sweet had to reengineer the product line so pieces can be finished first, then assembled. In 1990, emissions were 220 tons. Since 1990 emissions were reduced by 92 percent.
"We were the first wood production facility in the Los Angeles basin to implement water-based topcoats, in 1991," he says. "And the first woodworking facility to install a 100 percent solid, zero VOC, UV-cured finishing line, in 1995.
"We continue to investigate new finishing materials and systems to further reduce our emissions."
There are six assembly lines, with three Comil automatic feedthrough case clamps and four Nichols layback machines for packaging the bottom of a carton. Bed assembly is done in another building.
All of the 450 employees are cross-trained. The finishing people are cross- trained into assembly. Assembly people are cross-trained in different product lines.
"More and more we're looking for ways to eliminate non-value-added labor. If an operation is not adding value, how do we stop from doing it?"
Future plans include more efficient machinery. "You can't wait to buy it," Sweet says. "You have to keep reinventing yourself, equipment and training to make people smart and safer."
First on the list are additional V-groovers, so the entire product line will be changed over to V-grooving. Then a new cut-off saw line, moulder and double-end tenoner will be added. The oldest building will be torn down and space will be added to an existing building, on this site, for assembly.
Sweet is also trying to figure out how to bring robotics into the plant, to reduce carpal tunnel injuries from stapling and screwing. An automatic case clamp also will be added, and material handling will be improved.
"Some labor is not going to be eliminated, but repetitious labor has to be made easier or eliminated.
"We have to make sure that we're making product that's of value, that sells on the store floor," Sweet says. "And when a customer has a problem, responding to him. That relationship has to become stronger. Also, my vendors have to become an asset to me, selling me something that will make me better."
"You have to be willing to adapt to change," says Sandberg. "What can we do to build a better product and be a better company?"
"Furniture you want when you want it," Sweet says. "We better make sure what we're designing is what our customers want.
"The Sandbergs have said, that sign out front says Sandberg Manufacturing Co., it doesn't say Sandberg Importing Co., or Sandberg Marketing Co.," Sweet says. "They're proud of that manufacturing statement."
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