W&WP May 2004

 

Getting Out Of Your Manufacturing Box

Part 3 - Using Your Crayons

By Tom Dossenbach

 

Editors note: This is the third and final installment of a series intended to stimulate readers to consider making the innovative changes necessary to compete in today's global wood products industry. The previous two "Getting Out of Your Manufacturing Box" articles are archived on www.iswonline.com. (Part 1 | Part 2)

Our industry has undergone such rapid change that it hardly seems to resemble what it was just 10 years ago. Some say the change is good; others say it is a tragedy.

Jobs are being lost to overseas competition. Many U.S. companies are offshoring products and scaling back their domestic manufacturing capacities, resulting in a corresponding loss of jobs. We are not alone in this merging of global economies. The trend is causing stress all around the world. Those in a mature economy like ours are feeling the pinch of global competition while those in developing countries struggle to get market share in their efforts to export value-added products.

If you travel to Europe, you only have to turn on the television in your hotel room to see protests staged by European workers who are losing their manufacturing and service jobs to China, India and other global competitors - just as we are experiencing here in North America.

Ever since the Industrial Revolution, entrepreneurs have been seeking new products to manufacture and sell in new markets at home and abroad. That desire continues to this day at an accelerated rate in developing countries. These entrepreneurial efforts should not be relegated to the past or to overseas manufacturers, but must be rekindled by our manufacturing base today by climbing out of our (manufacturing) boxes with all the creativity we can muster. Once we are out, we must put that creativity to work and be free from any constraints in our thinking.

But how is a company to go about this if competitive circumstances force it into a corner?

The most basic human instinct is that of self-preservation. When confronted with mortal danger, man has always been faced with the need to make a clear choice. Sometimes he has only a split second to make the decision between flight and fight.

Flight is the easy way out - just turn and run and often you can escape the danger. (At least for a while!)

Fighting back requires a willingness to change your original plan, to be cunning and most importantly, to do it with creativity and imagination. As I have said many times, the company that taps the creativity within, most frequently musters the ability to adapt to change. Often this means changing the very nature of its business - be it product, service or a complete reinvention of itself.

As frequent readers of this column know, I often use a box of crayons to represent the creativity within each of us. If we leave our crayons in the box, nothing becomes of them. However, if we take them out, share them with others in our organization, and are permitted to color outside the lines, great things can be accomplished. So it is today, as I will demonstrate on these pages.

A Good Example from Croatia

With the owner's permission, I am going to tell the tale of a small company in the obscure countryside of the Slavonia region in Eastern Croatia. For many years the SISKA Company has manufactured oak stock for wine barrels for the French wine industry. Unfortunately, the company has experienced major difficulties since the last war in the region during the early '90s.

 

Mijo Coskovic and his son inspect a plane, minus its wings, that has just been painted.

The company's core business for the French wine industry was limited; concentrating exclusively on this business was risky at best because it is a low value-added product vulnerable to competition from any manufacturer with access to oak logs. The company wanted to produce higher value-added products such as green dimension stock or elements for the flooring industry. Even though SISKA had its own sawmill, the company did not have dry kilns to further process the lumber they produced down the value chain. As a result, government forest management authorities refused to grant the company additional log allotments. The allotments are reserved for companies with drying facilities that are better positioned to produce value-added products for export.

SISKA did not have the capital or the wherewithal to borrow the money for kilns to dry lumber for furniture and other value-added wood products. In addition, there were no local businesses with drying facilities with which it could form a strategic alliance.

What was SISKA to do?

Mijo Coskovic, the owner of the company, climbed out of his manufacturing box and began looking for new and creative ways to pursue his love for woodworking. With his crayons firmly in hand, Coskovic discovered perhaps the highest value-added wood product in all of Europe to manufacture - light personal aircraft. He formed a joint venture with another company and is now manufacturing aircraft just 30 meters from the plant where he still has his sawmill and barrel (stave) stock processing plant.

If you study the photograph to the right, you will agree that Coskovic is indeed a worthy example of someone climbing out of his box, using his crayons and changing the nature of his woodworking business in the face of potentially catastrophic circumstances.

Coskovic and his company have to be admired for creating a totally new manufacturing mindset where the workers were trained to use the highest skills and workmanship to build quality aircraft that are beautiful, functional and safe. Notice the intricate cutting, fitting and assembly required to manufacture the wings of this two-seater. This is an unusual case where a company redefined its core competency through innovation, education and training.

I am a furniture manufacturer from way back, but I can tell you that this wood product sent a tingle down my spine like no solid cherry reproduction or even a fine table with intricate marquetry has ever done.

By the way, the company has been thriving since the introduction of its new product line. It is now in a stronger financial position and recently broke ground for a new plant, complete with dry kilns, to produce additional value-added wood products. Coskovic has already negotiated with the government for an increase in his log allotment.

 

This one-of-a-kind Wall/Goldfinger boardroom conference table incorporates the latest AV technology into fine furniture design and workmanship.

Closer to Home

Was the preceding example too far out for you? Here's one that is closer to home. Wall/Goldfinger in Northfield, VT, is an excellent example of a company that fights competition by continually staying ahead with creativity and innovation in furniture manufacturing.

The company had a modest beginning back in the '70s making oak waterbeds, university furniture and some commercial furniture. John Wall, president, defined the company back then as one of designers and craftsmen. In the '80s, the company expanded its manufacturing capabilities and began making a small line of corporate office and commercial furniture. It became proficient in fine veneer work and lacquer finishes.

During this time, competition remained stiff as Wall/Goldfinger began serving the mid-Atlantic region. The company changed its focus to one-of-a-kind corporate furniture in the '90s and expanded its product offerings to incorporate marble and granite, as well as metals, glass and plastics. Wall/Goldfiner began using AutoCAD and purchased its first CNC router during this phase of its history.

As the millennium arrived, the company further focused on contract furniture. Wall and his team climbed out of their manufacturing box with their crayons to become a 'solutions company,' instead of just a furniture manufacturer. Today, Wall/Goldfinger produces solutions for effective meetings in boardrooms, conference rooms and seminar rooms for such clients as Pfizer, Bank of America, The New York Stock Exchange and The Federal Reserve.

The company is way ahead of the competition by providing the futuristic integration of AV technology into fine furniture for its clients. Wall says his company manufactures 'complex and nervous' furniture that usually requires meeting very tight deadlines. Put another way, Wall/Goldfinger takes on projects that many other companies don't want to deal with.

Look at the photograph above and you will understand why I wanted to share this company's innovative evolution with you. You can see the pride and dedication to quality that all of the company's associates have when you look at its products.

Now, who was it that said woodworking is a backward and low-tech industry?

How Does This Apply to You?

Circumstances constantly change in our lives and our businesses. We either allow these outside forces to determine our future or we react and do things to manage these changes for our benefit. How we go about this determines the future success of our enterprises.

For emphasis, I once again state that one must use creativity and innovation to the highest degree, to not only survive, but flourish. That's it in a nutshell!

These past three installments of Management Matters have included a brief look at manufacturing strategies and the danger of large backlogs. The benefits of micro lead times as a competitive advantage were demonstrated. Work share, offshoring and strategic alliances as a way to create innovative competitive advantages were discussed.

This month, two pretty darn good examples of climbing out of the box and coloring outside the lines were presented to (hopefully) stir your own creative juices.

I'm not suggesting that you make airplanes, nor that it is necessary for you to make a totally different product line. But, I can guarantee one thing: If you don't get out of your manufacturing or the supplier box you are in today, use your crayons and leave behind your current way of thinking, you are in grave danger of becoming a statistic of the past.

Good luck!

                                                                                                                                                                                           

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