Private ownership helps effect change
By Gina Donlin, Contributing Editor

At OFS, business is looking good. The manufacturer of contract and office furniture had sales of $94.5 million in 2003 that rose to $117 million in 2004. Mike Wagner, senior vice president of marketing for the Huntingburg, Ind. company, says sales for 2005 are on pace to be around $136 million. If you include consolidated sales, which factors in the freight services and raw materials that OFS outsources to other manufacturers, sales are targeted to be around $185 million this year.

At OFS, the buck stops with Hank Menke, president and CEO. The family-owned company has the benefit of an owner involved in daily operations. Menke walks through the factories, sits in on presentations with customers and listens to manufacturing concerns.

"Not being publicly held, we're not tied to quarterly reports," Wagner says. "Our owners are free to make decisions that are best for the company in the short and long term."

The benefit of divisions

OFS has 1,500 total employees, 1,200 of which are specifically manufacturing. Each of its 12 factories is set up as a separate profit center. Raw materials divisions sell to the outside, as well as to OFS. The division supplies board, plywood, veneer faces, laminated veneer panels and machined panels. The company's transportation divisions, which have a total of 300 trailers and 160 tractors, also deliver for other customers.

Not only has the investment in freight and transportation been profitable, it allows OFS control over delivery time and services. "We have less than two-tenths of a percent freight damage in an industry that has historically averaged a 9 to 15 percent damage rate," Wagner says. "We do installation, if requested, and can guarantee our customers a zero punch-list."

Contributions to success

Wagner credits a smooth, natural relationship between manufacturing and marketing for much of the company's success. "It's not that we have tons of meetings," he says. "We communicate in daily conversations."

Marketers try to understand the capabilities of the newest technology in terms of its potential for future product design especially processes that could differentiate our product, says Wagner.

There's been a push toward lean manufacturing processes and equipment that shorten cycle times. Edgebanding and CNC equipment were upgraded for fast changeover, better throughput and greater flexibility. Finishing rooms have been reengineered to cut drying times.

New products high in design and value with a medium market price have also contributed to sales success. At NeoCon in June 2005, OFS introduced Launch, a conference collection for the upper end of the market designed to provide universal adaptation to any electrical manufacturer's components.

OFS has seen particular growth in West coast sales. "We have more progressive designs in terms of styling, contemporary elements and greater functionality," he says.

Mobility, modularity, and general user flexibility are growing important as customers want to rearrange their furniture to suit their needs. Wireless technology has prompted growth in freestanding furniture.

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