Supporting the Furniture Industry

Today’s furniture manufacturers are recognising how advanced business management systems can help them compete in an increasingly competitive market where efficiency and responsiveness to customer requirements and the ability to take advantage of new opportunities are important to their success. A number of key players in the industry are gaining valuable business benefits following their investment in a fully integrated SYSPRO ERP solution from K3 Business Technology Group.

The UK furniture manufacturing sector is large and mature. It comprises many small manufacturers and independent retailers. It is estimated that there are over 6,000 furniture manufacturers operating within these shores, with the vast majority of furniture manufactured and sold in the UK destined for the retail market. Government ministries, office and hotel chains are also significant contract end users.

Following unprecedented growth prior to 2007, the furniture industry has been in decline over recent years. However, there are sectors within the industry that are showing signs of recovery.

Datamonitor’s report on UK Furniture & Floorcoverings Retailers 2011, for example, shows that kitchens will become the fastest growing sub sector in 2012 and 2013 with around 3 per cent growth rates. A report by Verdict 2009 on furniture and floorcoverings shows bed and bedroom furniture - the second larger sub sector - holding up well with a greater proportion of purchases relating to replacements out of necessity. Even in times of austerity people value a good night’s sleep!

In the medium to long term, the UK office furniture market is also expected to recover, with modest annual growth rates of between 2 and 4 per cent from 2011. Market forecasters are looking at figures of annual sales of £735 million in 2015, compared to an estimated £635 million in 2010.

Numerous UK furniture firms are smaller enterprises and many of them have not recognised the need, or had the money, to invest in new practices, processes and modern IT systems. However, they are now facing added customer demands in terms of not only product, but also cost and service. The stiff competition from major European conglomerates, that offer well made ‘desirable’ products and high levels of customer service is also affecting indigenous manufacturers, as well as low-cost imports from China.

In meeting the challenges of this new environment, UK manufacturers have had to develop more effective business controls and efficient processes throughout the business, from rapid and accurate order processing to lower cost / higher performance manufacturing and on time delivery. They also need management information in order to both effectively resolve problems and find opportunities for internal and market improvements.

Integrating new business and squeezing out costs

The challenging economic climate has also opened up opportunities for companies to acquire other businesses. Such mergers and acquisitions can provide strength and enhance portfolios by adding complementary products. Streamlining the integration of the “new” company into the firm is easier with the right IT infrastructure and business systems. Such is the experience of Kirton Healthcare, the specialist seating manufacturer, which acquired recliner maker A J Way in July 2010.

Kirton Healthcare is a quality provider of specialist seating furniture for challenging environments and more recently shower, toilet and commode chairs. The company supplies the NHS as well as many other healthcare establishments and private individuals. In addition, the company also designs, manufactures and installs sensory and soft play environments under its SensoryPlus brand as well as produces the Endura range of robust furniture for demanding, high traffic and secure areas.

To give the management team full visibility of critical information across the entire business, Kirton chose to roll out SYSPRO across the entire organisation. The software would centralise all the business information that up to that point resided in standalone systems.

According to Kirton Healthcare extending the system to A J Way was an easy decision to make.

“Selecting SYSPRO to help align A J Way with the rest of the Kirton Healthcare group was an obvious choice for us. We are very happy with the system and the support we get from K3. We know what we will be getting with SYSPRO. It is a powerful, easy to use, fully integrated system that will give us full visibility of critical information across the A J Way business,” says Beverly Wharton, Managing Director, A J Way.

“The software will enable us to move the business forward, improve process flow and drive change,” adds Beverly Wharton.

Managing complexity and business evolution

Many manufacturers have found that focusing solely on product design cannot sustain success. With growth comes business complexity, a massive increase in the need for information and ‘intelligence’, and heightened customer expectations. Companies have to learn that all of these issues have to be managed effectively. In effect, design capabilities have to be matched by business and manufacturing efficiency, to gain the full benefit of product leadership.

The Boss Group, comprising Boss Design and KOMAC, has been through this learning curve and has come out on top as a leader in its field. It offers both a comprehensive range of ‘designed’ seating collections, covering all aspects of the office, hotel and conference market, and bespoke product design. Many of its clients are architects and international blue chip organisations. KOMAC, has grown steadily into a forward thinking, dynamic manufacturer of an exclusive and diverse portfolio of task, operator, reception and meeting room seating.

This latest success of both companies, which have their own manufacturing and sales operations, is in part due to an extensive change programme undertaken over the past few years, and driven by the recognition of the need to raise the standard of their operational and manufacturing practices to the level of their product offering. One of the most important steps in this programme was the introduction of SYSPRO.

As Virginia Seaward, the Group’s Head of Operations, explains: “Through the implementation and development of SYSPRO throughout the group, we have been able to radically overhaul and improve operations, including a move to a lean manufacturing environment, and really ‘scale up’ the business. As a result, we have been able to cope with an 18 per cent year on year growth, while still improving delivery, and reducing costs and inventory. Without SYSPRO we never would have coped.”

The Boss Group is customer centric and offers a huge number of product permutations, covering different chair bases, arms, materials, and including 5000 different fabric and colour variations. Yet, despite the importance of the front-end order processing to both businesses, the previous sales system simply recorded sales details and provided no real support. Ensuring that orders were taken correctly and could be configured to customer requirements was down to the sales staff. However, with so many options it was not uncommon for mistakes to occur.

Both factories in the group assemble to order, with a range of delivery responses depending on the products required. Yet, previously, with little effective shop floor planning, different production sections tended to determine their own work plans, and this would mean that they could easily be working on different orders. As a result, lead times were too long, and waste was too high.

SYSPRO helped to transform both business operations. In many instances this meant reorganising in line with the system’s processes and required practices. SYSPRO has also been used as the foundation for previously non-existent IT solutions such as a Quality Management System.

Having established a solid business foundation, and effective management and control systems, Boss has seen a significant return for its efforts. For both businesses, SYSPRO’s sales order processing and Product Configurator modules have had a major impact, having eliminated a major source of wastage and mistakes.

Perhaps the biggest change has been in production. Here the system delivers the information both factories need to drive their increasingly lean environments, which are based around assembly to order, minimum WIP, limited on site raw materials stocks and on time delivery.

“We have gained production visibility and control through the ready access to accurate information, and we are now using this to better orchestrate the whole manufacturing process in both factories,” says Seaward.

For example, the MRP functionality is used to drive the purchasing of all raw materials, wooden frames, metalwork and componentry, and reports based on the originating Master Production Schedule also provide a forward view of overall capacity requirements. This enables production management to work around any upcoming capacity bottlenecks, by redeploying the multi-skilled operators as appropriate. Product kitting has also been introduced, which is undertaken up to 10 days prior to final assembly, and this now provides advance warning of any shortages.

To plan final assembly, Boss has again used the report writing capabilities of SYSPRO. The group has a fixed delivery pattern to different geographical areas, and SYSPRO now automatically produces a dispatch log detailing which orders are to be dispatched on which day. Working back from this data, the planning reports and work-to lists are produced. This schedules work so that final assembly occurs just one to two days prior to an order is being dispatched.

“Everyone now knows what they are supposed to have ready, and when – it’s brilliant,” says Seaward.

Customising the system to meet the needs of individual users

Information visibility is a recurring theme throughout manufacturing, but how can you be sure that the appropriate information is available to each system user and in the format they need it? Bed manufacturer Millbrook Beds found that SYSPRO provides such a solution. According to Andrew Longland, IT Manager for Millbrook Beds, SYSPRO’s adaptability was a key driving force behind the company’s decision to select it.

“We wanted to give our users better facilities, more efficient ways of working, and greater visibility of information. We felt SYSPRO was the best fit for our business. It’s so flexible, we can use it in many different ways and adapt it to our company’s requirements,” he says.

With SYSPRO, Millbrook’s management has been able to make certain modules available to users who do not need the full SYSPRO suite of applications. The company is planning to provide a lower specification terminal to shop floor users, who will be able to access the system through a web browser with limited functionality.

SYSPRO’s e.net functionality allows the creation of supplier and customer portals. This allows suppliers to view stock inventories and replenish the materials store. Customers have the facility to place and track orders online - saving on the time and cost of making telephone calls to their customer services department. The e.net architecture has also been used to write a bespoke sales order entry screen to create a more efficient sales order entry system.

Discovering the ideal sales order management solution

Sales order management needs to be a slick process to help maintain and indeed improve the customer experience. When they call about a particular piece of furniture or want to be able to order a variant product, the sales person must be able to provide what the customer deems to be the right answer. Bedroom furniture specialist Stuart Jones found that SYSPRO’s Sales Order Processing and Product Configurator could help boost customer service levels and perfectly match customer requirements. The system provides accurate inventory information that helps the sales department maximise sales opportunities.

SYSPRO Sales Order Processing delivers important gains in speed and efficiency when handling customer orders and accurate fast order fulfilment. It enables Stuart Jones to turn around orders more quickly and accurately, with the added benefit of inventory transparency. This allows sales staff to give customers up to the minute information about stock levels, prices and alternative products and provides a superior level of customer service.

Stuart Jones manages and fulfils bespoke orders using SYSPRO Product Configurator. This tool provides the company with the ideal solution for responding to specific product make up. For example, a customer may want to order furniture with a particular finish and upholstery colour.

The easy to use Product Configurator allows the sales staff to find out if a product matching the customer's requirement is in stock and if not the order can be sent through to manufacturing. This again speeds up responsiveness to customers requirements and further boosts their satisfaction levels by providing prompt service.

Gary Lillistone, Bridge PR on tel: 024 76 520025, email:garyl@bridgepr.co.uk

Ellen Hoefste, Marketing, K3 BTG on 0161 876 4498

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