Hickory Chair gains an “EDGE” on its competition with the implementation of its collaborative management system.

High-end furniture manufacturer Hickory Chair is relying on an often-overlooked resource in the wood working business — employees' minds — to stay competitive in the present tough global market.

Employees are “a rich, fertile idea system” for increasing efficiency and cutting costs, says President Jay Reardon. Hickory Chair has mined that system successfully since its adoption of a collaborative management style patterned after automaker Toyota.

Hickory Chair calls its version EDGE —Employees Dedicated to Growth and Excellence. Like Toyota's system, it stresses each employee's ownership of his or her job. If employees see something to improve quality or save time and money, “they can just do it,” Reardon says. The only requirements: it must be safe and not hamper the work of other employees in the 640,000-square-foot Hickory, NC, plant.

With the employees at the 95-year-old company leading the way, 30-minute changeover times for some machines have been cut to less than two minutes, Reardon says. Suggestions had been offered before by industrial engineers, he adds, but “there's no way they can be as powerful as individual operators thinking up ways to save themselves time.”

At weekly departmental meetings, employees decide what three perceived inefficiencies the department will tackle in the next week, while interdepartmental “waste teams” pursue issues that cross over into several areas.

Tackling Tough Issues
At the quarterly, company-wide meetings, Reardon shares details of sales and profits, while he and employees hash out such questions as whether under-selling SKUs should be dropped or changed.

“You know what's going on, and you feel good about it,” says Marketing Director Laura Holland, who has been with Hickory Chair 20 years.
Reardon has the final say, but adds he has gone from controlling the company to being, in his words, “conductor of the band.”

Under Reardon's orchestration, the company has been able to keep fully 80 percent of its production in the United States, at a time when much of the wood working industry is heading overseas. In 2005, imports accounted for 50.7 percent of the wood household furniture sold in the United States, according to the American Home Furnishings Alliance. And in North Carolina alone, six plant closings, five of them attributed to import competition and the other to consolidation, put 1,711 people out of work in the first eight months of 2006.

The softly curving lines of this Bailey Chest draw attention in this living room. The chest is designed by Thomas O’Brien for Hickory Chair.

Hickory Chair, by contrast, has added 50 employees in the last year, bringing its workforce to approximately 525. Sales, too, are on an upward climb, back toward their pre-9/11 level, Reardon says. (A Furniture Brands company, Hickory Chair does not release its sales figures).

Delivery Times Cut
The company's success can be directly attributed to the flexibility, variety and quick delivery Hickory Chair has been able to achieve through its implementation of the EDGE system. “[These] are tremendous competitive weapons,” Reardon says.

For example, the company has been able to drastically reduce its turnaround times. Casegoods, which used to take up to 22 weeks, now ship in four to six weeks. The turnaround time on upholstered items has gone from six to eight weeks down to two to three weeks.

Perhaps one of the most productive things the company has done, Reardon says, was to switch from large production runs of a limited number of SKUs to small runs of a variety of styles and items. “Why should Hickory Chair make 50 of something,” he asks, “when we really only needed 10?”

Now, he says, “in a given day, we may work on 10 different styles.” Inventory, a major consumer of capital, has been cut 70 percent, Reardon adds.

Reducing inventory left so much free space in the former casegoods and upholstery plants that the two were consolidated into one facility approximately 2-1/2 years ago. A bonus, Reardon says, is that employees in both areas see each other on breaks and share ideas about more effective ways for work.

The combination of idea sharing and reduced production runs also has led to improvements in quality control.

Traditional wood working business thinking says large runs soften the impact of mistakes, and there is some truth to that, Reardon acknowledges. For example, if you cut 50 of something, and ruin the first two, that may not be so bad, he says. However, if you cut 10 and ruin two, “that's 20 percent,” he says.

“The real question,” Reardon adds, “was ‘why are we damaging two?'” Through idea sharing and the EDGE system, employees have been able to find alternative methods of dealing with culls, such as using scrap lumber for the first two.

“It's employees who think of things like that,” he adds.

One Idea Leads to Another
For other ways in which to get an “edge” over competitors, employees began to regularly ask themselves, “What is it we could do so that our flexibility could add value to the customer?” Reardon says.