Supply Chain Council of European Union | Scceu.org
Procurement

Dealing with demand: How 2 upholstery manufacturers hone operations in face of constraints

A conveyor system feeds frames into the plant from Craftmaster’s adjacent frame assembly operation.

HIDDENITE and CONOVER, N.C. — COVID-19’s impact on manufacturers’ ability to fulfill demand for furniture has ranged from shutdowns, to complications from meeting safety protocols, to supply chain constraints, all in the face of booming consumer appetites for the goods they make.

While they’re still playing catch-up, producers are adapting through process efficiencies, stepped up workforce recruitment efforts and waste reduction. Furniture Today recently visited two North Carolina plants — Alexander County-based Craftmaster Furniture and Universal’s newly opened custom upholstery plant in Conover — to see what’s happening on factory floors.

Craftmaster backlogs are still four times normal levels for the company, which does 65% of its business in custom orders.

“After we re-opened May 4 from the shutdown, our business exploded in June,” said Craftmaster CEO Roy Calcagne. “We anticipated a 50% order rate May through June, but we were back to 100% by the end of May. June through October, our business just about doubled. Fortunately, we’d ordered a lot of fabric and materials in advance of (2020) Chinese New Year.

“We had to rent an outside warehouse to hold the fabric inventory, which we’ve doubled in the past five months,” he added. “Right now we have around $5 million worth on hand.”

Craftmaster also orders parts, primarily wood legs, from Vietnam, and as with fabric, stocked up on those components ahead of CNY.

“We had some container delays in that but stayed in a good position for components,” Calcagne said. “But we always have a backup; if we can’t get legs from Vietnam on time, for example, we have them locally made.”

Universal closed on its purchase of the existing Southern Furniture plant in October 2019 with the goal of creating a domestic manufacturing presence that would give its growing upholstery line a custom-order capability. After changing out equipment and re-tooling the layout and product flow at the 450,000-square-foot plant, Universal had the program in full-swing in time for October High Point Market 2020.

In retrospect, gearing up the plant leading into and during the pandemic may have been better timing than at first glance. Universal already had front-loaded fabric inventory before opening in Conover, and as a new entrant starting from scratch, it didn’t face as large an immediate backlog crisis as that of producers coming out of manufacturing shutdowns.

“We shifted some orders from overseas, and when everyone was shut down, we were still buying fabric,” said Senior Vice President of Sales Sean O’Connor. “We were launching the custom business in the middle of COVID-19, and we kept on with the plan.

“Many manufacturers are quoting March for orders today. Since we’re new, we’re able to say six- to eight-weeks and be competitive with existing special-order resources.”

With a customer base approaching 600 retailers and designers — and growing — the Conover plant is fully booked and then some: “We’re running more efficiently, but our backlog is growing, and we need to hire more talent,” O’Connor said.

 

The labor constraint

Universal/Conover employed 110 people as of last month, but General Manager Dale Smith said the facility could immediately add another 30 if workers were available. Sewers, insiders and upholsterers are the most pressing needs.

“This is the tightest job market I’ve seen in 20 years,” Smith said. “By next fall, we could easily add another 50 people, and if we could add 25 or 30 now, we could accelerate growth.”

To that end, Universal is offering referral and signing bonuses at the plant. He added that a lot of cross-training helps deal with labor shortages.

“They don’t do one or two things, they can do one or six,” Smith said. “That’s good for the company and gives the workers an opportunity to grow.”

Universal also took steps to make the Conover plant a more attractive workplace. The company worked with N.C. State engineers to update lighting throughout the factory and repainted all the walls for a cleaner atmosphere.

Craftmaster opened a 100,000-square-foot upholstery production facility on the former Heritage Home campus in Lenoir, which Calcagne anticipates adding another 25% in capacity this year. New lines at its three Alexander County plants totaling 600,000 square feet should add another 15%.

“The bigger issue is the availability of skilled workers,” Calcagne added, a problem familiar to just about all domestic manufacturers. Craftmaster has been a big backer of the Furniture Academy at nearby Catawba Valley Community College, a program devoted to training workers for cut-and-sew and upholstering jobs.

“They had their eighth graduating class in December, and we’ve seen 100% placement for those coming out of the program,” Calcagne said. “It’s giving us the ability to train people, and it changes our industry’s message within our communities that there are job opportunities in upholstered furniture manufacturing.”

Craftmaster also opened a satellite sewing operation in Wilkesboro due to a lack of local skilled sewers. Starting with 18 sewers in 2015, that facility now employs 40.

“We couldn’t find enough sewers in (Alexander County), so we worked with the economic development commission up there,” Calcagne said, noting that the closure of manufacturers such as Key City and Green Bros. had left a pool of available sewers.

It’s not enough to fill the need, though. Calcagne pointed out Alexander County already has other upholstery manufacturers such as Mitchell Gold + Bob Williams, Paladin and Taylor-King competing with Craftmaster for labor in a county with just 37,000 people.

“The decision to open in Lenoir was not just because a building was available but that there was a skilled work force we can hire or train,” Calcagne said. “We’ve seen some layoffs there in the contract sector, so we’ve been able to hire from that.”

 

COVID-19’s in-plant impact

The pandemic’s most obvious impact on production relates to absenteeism and social distancing requirements. Craftmaster’s cutters and sewers — all kits are done in-house — are inherently socially distanced in the plant, but the company does utilize production lines.

“We do have product lines, but we’re requiring six-foot distancing, masks, and we take temperatures every morning,” Calcagne said. “We’ve had COVID-19 issues, but it hasn’t de-railed us. … Most of our job functions are spread out anyway.”

Most of those instances involved employee exposure outside the plant leading to individual quarantines.

“We’ve had active COVID cases, but they’ve all recovered,” Calcagne said. “We still have to remind people every day. The masks, in my opinion, have made a huge difference, and we’ve made masks mandatory from day one. My biggest concern going into winter is that, while we can control what happens in the building, we have 700 employees, and we can’t control what happens outside our facilities.”

As a start-up, Universal/Conover was able to build its work flow and processes from scratch vs. re-vamping stations to accommodate social distancing requirements.

“We moved our machines a little farther apart,” noted Smith, adding that the custom, bench-made manufacturing model makes social distancing inherently easier. “Everybody is focused on a particular job in the process, and they’re naturally more spread out than with a typical production line.”

Daily disinfection and splitting out employee breaks have combined with that inherent distancing to give what he called a “big advantage in this environment.”

 

Focus on efficiency

In addition to ramped up recruitment, Universal is honing processes. All cut-and-sew is done in the plant, so that takes out a link in the supply chain.

“We also are changing out cutting machines from XP system-based units to a state-of-the-art Cloud-based system,” Smith said. “All our patterns are being uploaded to iPads at the work stations, so when product development makes changes, those are updated to iPads instead of relying on physical patterns,” eliminating a lot of potential errors that could eat into time, hinder flow and increase material costs.

The product development department moved into the old plant’s former showroom at the front of the building, so there’s proximity both to plant management and the production floor.

Product development “used to be on the other side of the building, but now it is front-and-center, and if there’s a question, they’re right there,” Smith said.

Sewers have been cross-trained to sew the entire kit for a single product, which Smith pointed out helps avoid repetitive motion problems since the sewers are doing different types of patterns. The cross-training continued in all the production areas, too.

Frame assembly and foam installation were staged to bring those functions into a more efficient space. Southern had been building frames from scratch one or two pieces at a time.

“We looked at that and decided to outsource frame components from two local suppliers for more consistency,” O’Connor said.

Cutting and sewing at Craftmaster’s Plant 1 in Hiddenite, complemented by the Wilkesboro operation, feeds its other facilities’ production.

“In Lenoir, we plan to run more cut-and-sew kits from China and Nicaragua so we aren’t having to ship so much up there from Alexander County,” Calcagne added.

Craftmaster also does its own frame assembly in a 50,000-square-foot building onsite in Hiddenite that feeds to a staging area via conveyor in the main plant.

In addition, the company runs separate production lines for chairs on one hand and sofas and sectionals on the other for more efficiency since those products have different upholstering skill sets.

While supply chain issues remain largely outside the manufacturers’ control, Universal and Craftmaster — and others — are managing what they can to build capacity through physical expansion, process improvement, and labor efficiency and recruitment.

“If your business is up 100%, there’s no plan you can make to accommodate that with existing capacity,” Calcagne said.

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