Comebacks are common in sports and entertainment, but not in furniture manufacturing.
After briefly closing, Norwalk Furniture is approaching two years under new management and is making the most of the opportunity. The Norwalk, Ohio, company has improved its processes, streamlined its manufacturing, and upgraded its product quality. It all started when 12 local families decided to invest in reopening the company’s factory.
“When the 12 local families came together to look at Norwalk Furniture, we saw a pretty diverse empire,” says company president Dan White. “The company was in a lot of different businesses and had plants in different parts of the country making different price point furniture.
“As we looked at that, the one part that seemed to make sense and seemed to have profitability built into it was the custom order furniture.
“So the big change we made right out of the gate was not to be involved in those other businesses. We were going to focus on high style, high quality, made in the U.S.A. furniture, made here in Norwalk, Ohio, and delivered in 35 days. That was going to be our business.”
The company at one time employed 400 people and had plants in Mississippi and North Carolina. Today, Norwalk Custom Order Furniture (which does business as Norwalk Furniture and started operations in Oct. 1, 2008) has 155 employees making upholstered furniture in four 10-hour days in the Norwalk location. The company had about $14 million in sales in 2009.
Local sourcing, made to order
“Our new company is focused on supporting local business in the United States,” says Reyna Moore, director of marketing. “A large percentage of everything used in our product is made in the U.S. We use Amish wood legs, hardwood parts, (domestic) fabric and partner with a lot of regional vendors. That’s a very important part of who we are as an organization. The old company imported a lot of those parts.”
Norwalk also makes 98 percent of all the wood parts used. Tim Hallock, director of manufacturing, says that an Anderson router was bought to manufacture plywood frames on a just-in-time basis. Previously, frames were purchased and inventoried in large numbers amounting to thousands of frames and 500 different styles. Plywood is now purchased for frames from Weyerhaueser. Now, production is based on orders, which is the biggest change.
Mike Kenney, vice president sales and marketing, says that product lines were also consolidated. “We’ve culled the number of fabrics down from 2,200 to 800. And the product we’re making today has several improvements to it.”
Norwalk also brought its processing of swatches back in house. Norwalk sends swatches to retailers and customers choose what they want. Previously, another company was handling this work.
In the shop
In the Norwalk plant, the Anderson CNC router cuts plywood pieces for the frames. Separately, hardwood parts are finished in a finish room.
A Lectra leather cutter on a large table uses nesting principles. Some special cutting is done by hand. In the sewing room, most of the people have 20 years of experience. In the poly room, the process starts with large 300-pound blocks of foam that are cut on a large horizontal saw, before being fabricated into cushion material. Out on the factory floor, “insiders” do much of the upholstery work, taking perhaps 15 to 45 minutes, working on one piece at a time. “Outsiders” apply trim and outside material, and put on legs. Pieces are then inspected and tested, packaged and shipped out.
It’s important to note that most employees specialize in one area but can do multiple jobs – a priority for the new company. This flexibility was possible in part after the employees themselves voted to decertify the union.
“We hired the best upholsterers, the best covers, the best sewers. So our internal rework has dropped,” says Kenney.
Specifically, Norwalk has a rate of less than 1 percent on returns, adjustments, warranty and local repairs combined. Moore says the return rate was 7 or 8 percent a few years ago.
"The quality of what goes out now compared to what went out before is much better, Kenney says. “That’s why returns are less than half a percent. It’s all the work and inspection that are done at the front end.”
“One of the most important changes here was the culture, and the collaboration between management and employees,” Moore says. “We worked very hard to develop a strong relationship with people on the floor. We are one team working for one company, all trying to achieve the same goals.”
The biggest challenge has been the economy, says White. “We have some very loyal dealers out there and they have been dramatically affected by the economy. “Our biggest job is to have programs and products that work for our retailers in this economic climate.”
Kenney says the old company had a marketing program of franchises, and large commitments on store galleries. All of the major channels of distribution went away, and a quarter of Norwalk’s retailers are out of business. The company has a 50 percent increase in traffic at the recent High Point Market and sales of Candice Olson styles have quadrupled, he says.
“We’ve identified our retail price point,” Kenney says. “And we’re manufacturing to that price point. Seventy percent of our business is at a retail price point of $1000 to $1800.
“Our fabric selection and pricing have accommodated that. We’ve also identified a way to get floor space back with some promotional programs. We have five $500 wholesale sofas -- unheard of compared to what the old company had.
We have a niche. Other companies that have closed are making a commodity product.”
White says the company plans to continue to do what it does best, and offer internet initiatives to drive traffic to retailers. “We’re focused on giving them everything they need to be successful,” he says.
Kenney believes that residential furniture manufacturers will be regional companies specializing in a certain product. They will be custom order with lots of options and special applications. “That’s not the kind of work that’s done in a mass produced product environment,” he says.
“The consumer base continues to want more and more customization. It incumbent on us to continue to lower prices, to take cost out of the product without lowering the quality of the product.”
Have something to say? Share your thoughts with us in the comments below.