How the Industry Operates
Furniture involves a complex series of global arrangements that periodically experience major adjustments in the location and function of their upstream (supply) and downstream (market) segments, as well as major shifts in manufacturing due to both product (materials) and process (e.g., lean manufacturing) innovations. This chapter begins with the historical development of the U.S. furniture industry, followed by a more detailed look at the impact of key technologies on contemporary manufacturing.
A History of the U.S. Furniture Industry
Furniture making profited from the abundance of North America’s forests since early colonial days. English-born John Alden was reportedly the first American cabinetmaker in 1620 Massachusetts. Within the following century, woodworkers in different colonies developed distinctive styles. Immigrants from Western Europe adapted Old-Country patterns to the strengths of newly available American wood and the shortage of other materials, sometimes using paint to bridge the difference. New World inventions included the rocking chair in 1800 and simple Shaker styles suitable for the new faith in the early 17th century. By the 1840s the frontier town of Cincinnati reigned as a new furniture center, taking over from northeastern cities, presaging a population and industrial shift to the Midwest by mid-century. Boston lost its primacy as the traditional furniture center following the Civil War. In the late 19th to early 20th century furniture manufacture moved to the Midwestern, Great Lakes states of Ohio and Michigan. The shifting location of furniture making from the 1850s to 1880s is epitomized by the move of the future founder of the Grand Rapids Chair Company from cutting wood in New Hampshire to innovatively creating suites of furniture for bedrooms and dining rooms. Other firsts, typical of the Midwest industrial era, were cast iron and wood school desks and specialized machinery such as spindle turners for making affordable, mass-market wares. The 1876 Philadelphia furniture exhibition put Grand Rapids on the map as “The Furniture City.” Major shows were held in metropolitan Grand Rapids (in 1878), Chicago, and New York City. The Adirondack Chair represented a local style designed for leisure, relaxation outdoors, but relied on an increasingly scarce commodity outside the Adirondack forest area. Lumber depletion and higher labor costs sent both furniture and textile manufacturers to North Carolina and southern Virginia and spurred the compensatory invention of plywood in Grand Rapids in the 1880s.
Reconstruction-era railroad extension and creation of the Southern Railway network connected Southern factories to Northern markets, as well as Northern manufacturers to an economically recovering South. Railroads were particularly important for shipping bulky, heavy-weight goods such as furniture; the freight rate concession for furniture attained in 1912 sent demand and consequently work for Southern manufacturing soaring. By 1902 North Carolina furniture manufacturers signaled their maturity and independent streak by separating from the national furniture organization. Entrepreneurs like Thomas Wren capitalized on the shift by starting a new national furniture showcase in 1905 in High Point, North Carolina. Southern companies such as Bassett applied mass-manufacturing techniques in 1902 to cater to a growing middle-class market, and North Carolina’s White family firm supplied to American military markets, which were expanding to the Panama Canal Zone. By 1908 North Carolina’s furniture was being exported to meet global demand in the far-flung markets of Cuba, Europe, and South Africa. Other businesses flocked to create local clusters catering to furniture needs from photography for advertising, to textile mills, and shipping companies.1 The first High Point Furniture Market took place in 1909. By 1910 a total of 71 furniture factories operated in Michigan, compared to 250 in North Carolina.
Wartime and recovery demands were goods for furniture manufacturing in each World War period. Downturns such as the Great Depression were met with new products such as particle- board, an Iowa invention in 1933 that was picked up by southern Virginia manufacturers in the 1950s. By 1945, the Federal Reserve officially designated North Carolina the center of U.S. furniture manufacture, which only increased with the growth of the veteran housing and family boom that followed. A decade later, half of all U.S. bedroom furniture was made within 125 miles of High Point, the heart of the Piedmont Triad. Levitz (PA) furniture opened the first U.S. furniture warehouse showroom in 1963. At its height in the late 1980s, U.S. furniture manufacturing collapsed in the next decade and a half due to two trends:
- 1.the second-generation sale of largely family-owned firms to conglomerates headed by managers who were unfamiliar with furniture manufacturing and felt that their skills were trans-industry transferable, accompanied by
- 2.the maturation of China into a manufacturing powerhouse combining newer machinery with low-cost workers and a determination to drive rapid development through a global export push.2
The historic roots, geographic shifts, and effects of this globalization explosion on the implosion of U.S. manufacturing are covered in this chapter by detailing major competitors of—and partners with—domestic manufacturers.
Figure 3.13 demonstrates the continued predominance of the southeastern U.S. in furniture manufacturing as it was at the height of American production in the 1980s, followed by the Great Lakes states, with steel furnishings in Michigan and wooden carved furniture in Indiana. The Far West is a new region, given its Asia-centric port facilities and market, second only to the eastern United States. As detailed in Figure 3.2,4 North Carolina remains the major state in the southeast, from largely case goods makers in the western part of the state to upholstered furniture makers in the Piedmont Triad region around High Point, North Carolina. Across the state border, southern Virginia also contains some traditional furniture manufacturing, including the only IKEA plant on the U.S. east coast, recently located in Danville, Virginia. Indiana and Michigan remain furniture centers in the Great Lakes region with specialists in Amish and office furniture. Amish in Indiana and Ohio transitioning from agriculture to manufacturing are finding that power tools run on compressed air (rather than the forbidden electricity).
Figure 3.1 Regional distribution of U.S. furniture manufacturers, 2012
Figure 3.2 Percentage of U.S. furniture firms by leading states, 2012
Five years later, 2017 figures indicated that the states that were highest in producing wood were (in order) Alaska, Oregon, and California. The southeast still led as the highest furniture-producing region. For Mississippi the furniture industry employed the highest number of workers (16,651), while furniture was North Carolina’s second largest by workers (27,756) and Oregon’s third largest industry by employees (8,370), including a new innovation in engineered wood products advertised as steel quality for building construction.5 Due to its proximity to ports receiving Asian shipments and a large, growing, and affluent population basis, California leads the Far West United States in furniture production. Texas and Mississippi draw on pools of low-cost labor to counteract foreign furniture production, at the lower quality, in their area of the southern United States, particularly around Tupelo in the Mississippi delta region. The northeastern region of the United States has seen a resurgence in furniture crafters, including local Maine and Vermont manufacturers stressing an economically sustainable, “Made in America” green market appeal along with relocatees from the downsized North Carolina and southern Virginia factory area. According to Federal Trade Commission regulations, the “Made in America” label must indicate that “all or virtually all” parts are, indeed, domestically manufactured.
Showtime: The Role of Major Markets
Since the late 19th century, furniture markets have provided a major occasion and gathering place for displaying the latest designs and fashions in the home furnishing and related décor arena.6 Exhibits are now global events, with signature markets such as those held at High Point, North Carolina, and Las Vegas, Nevada, that are carefully structured to avoid direct date competition, including with various overseas Chinese events. Major shows are also held throughout Western Europe, the United Kingdom, and in Tokyo. Exhibitors often must choose between contenders since displays are costly in both time and money to ship, set up, and staff. The United States and China each have two major markets in addition to several regional competitors, with events lasting just under 1 week.
These large global gatherings provide important opportunities for manufacturers, retailers, wholesalers, designers, and other professionals affiliated with furniture to see what is current in this volatile field and make purchasing, shipping, and other business arrangements face to face. Periodic exhibitions feed local businesses, from photographers to designers. Place-specific styles from Southwestern to Shaker become global trends, and culturally specific dictates are globally designed and manufactured.7
High Point Market
This market has been held in the North Carolina city of the same name since 1909. It takes place annually in April and October, reinvigorating the Piedmont Triad city with over 85,000 attendees (10 percent reportedly international, from 100 countries) and 2,000 to 3,000 exhibitors in 11.5 million square feet of display space. This furniture-centric “Niche City” remains the premier U.S. furniture event site. High Point Market includes showrooms in several buildings as well as furniture-manufacturing sites nearby. At markets like High Point, furniture retailers make their annual purchasing decisions representing billions of dollars in furniture sales. Nonfurniture spin-offs for the host city are estimated to generate just under one billion dollars annually in revenue from accommodation, food, entertainment, transportation, retail, tax dollars, and utilities connected with the largest wholesale residential home furnishings exposition in the world—purportedly larger than the combined volume of its five established competitors in Cologne, Tokyo, Guadalajara, Milan, and São Paulo. Despite the ups and downs of U.S. furniture manufacturing, High Point’s showroom space increased 1,200 percent from 1963—when High Point City Fathers boasted that half of all wood bedroom and dining room furniture and a quarter of all upholstered furniture were made within 200 miles of their city and that the New York Times crowned it the top national furniture exposition—to the early 2000s. The key to creating a furniture cluster was the combination of a marketing center and production center, with furniture showrooms reflecting the design and marketing of the furniture.
Las Vegas and Chinese Markets
This market came into the picture in 2005, with half the exhibition space of High Point but with construction planned to equal the size of its North Carolina rival in a decade. Las Vegas features less expensive, more available room and board facilities, as well as more entertainment options for visitors. Held in late January and late July, as of 2012 the Vegas Market claimed 1,500 exhibitors from 115 countries. Its 4 million square feet includes “total home” décor, rugs, and gift items.
The China International Furniture Fair debuted in 1982 in Guangdong, followed by the Shenzhen International Furniture Exhibition in 1984, as a sign of China’s manufacturing presence in furniture. The major furniture construction site in the Pearl River Delta, Shenzhen led the way for other Chinese furniture industrial park clusters in Huizhou (also Guangdong Province) and Chengdu (in inner China’s Sichuan Province). Smaller clusters in large business centers such as Shanghai also feature international furniture showrooms. The China International Furniture Fair held in March is the largest furniture exhibition in Asia, pulling an international group of participants and attendees to the largest global furniture-exporting country.
Other Regional Markets
New sites are also springing up as furniture showcases, but carefully positioned in time and place to avoid conflicting with the bigger established national and international players such as in China, Canada, India, and Malaysia. Southern California hosts an annual event in mid-November, just prior to the larger High Point, NC, semi-annual event. Dallas covers the southwest area with an event in late June and early January. January is a year kick-off event for furniture exhibitors in Tupelo, Mississippi (heart of that state’s industry manufacturing), Atlanta, Georgia, Wisconsin, and Florida.
Demand Drivers
The major generators of furniture purchases are disposable income and housing purchases. Sales of mattresses, upholstered furniture, and case goods (wood items) roughly parallel each other, with frequency and amount of purchase in that order. The sequence reflects perishability of the product, relative expense, and in the case of upholstery in relation to wood furniture its prominence in public areas that are prioritized over bedroom-type wood settings. Such prioritization frequently accompanies times of economic recovery when people are moving, improving, or adding a family member. Demand drivers for furniture include retailers, representing 43 percent of the market, and wholesalers, who command 31 percent of the market. Contract outfitters that largely supply to corporations through custom orders supply another 13 percent of market demand, with exports accounting for 11 percent. Consumers who buy directly from manufacturers are a diminished portion of market share at just 2 percent of demand generation.
With the advent of numerous competing information outlets, former mass-market instruments, such as network TV advertising, have declined and precipitated a return to previous ways of reaching potential customers. The major marketing tools now include direct mail and showrooms, where potential purchasers can see and experience the feel of the furniture pieces. This outlet lends itself to targeting a local market looking for a distinctive variety that reflects local tastes, a range of prices, and occasional sales. Big brand standalone stores such as La-Z-Boy, Ashley, and Rooms-To-Go are for customers who know exactly what they want. Large showrooms tend to feature a wider range of merchandise from which customers can choose. The limited range of textile offerings in lower-end stores reflects the prevalence of inexpensive Chinese cut-and-sew kits; U.S. made goods and more upscale offerings feature varieties for a certain amount of customization.
Marketing strategies also shifted to keep up with technology and media outlets. Web pages now generate a greater proportion of brand interest than in the past when customers relied on local stores and print advertising, but prices through “click” web outlets must be held at the same floor as offered through “brick” retail stores in order to not undercut local retailers licensed to carry specific brands. Large color catalogs formerly issued by name brand companies such as Ethan Allen have diminished in utility, but smaller color glossy brochures and inviting whole room furnishings are still felt to be effective “dream room” marketing tools, some attached to brand websites. “Step-ups” also help to keep furniture markets serving wider audiences and generating higher margins: not just bed frames and night stands but accompanying pillows, bed covers, coordinated rugs, and lamps are also grouped to push sales. High-end furniture marketing targets designers and the custom niche, with some firms limited strictly to this segment. Celebrity endorsements and purchases are sought to tie in to mass-market awareness and desire for identification with these individuals through shared design preferences and “quality of life” promotion.
Important characteristics affecting cyclical-appearing demand curves include the bust-and-boom housing market, most notably during the recent recession triggered in part by a housing bubble. As home construction picks up, pent-up demand appears to be triggering recovery, particularly strong in 2012–2013. The fluctuating strength of relative currencies as well as periodic shortages affect the price of supplies such as wood paneling, depending on the customary source of the item. This frequently triggers an uptick in cost, followed by downward readjustment when new sources are identified. This is particularly true with furniture since it is a fairly elastic, nonessential commodity that purchasers can delay until the market situation is more favorable or stable.
Overview of Technology
The use of large computer-automated machinery revolutionized furniture manufacturing with several major effects that continue to ripple through and reshape the industry. Prior to enabling offshoring, the technology employed in furniture manufacturing from 1958 to 1991 was estimated to account for around one-third of the average annual labor productivity gain in that time period. Most of the machinery used in U.S. firms is manufactured in Japan or Germany. Due to the demise of many firms, second-hand pieces can now be picked up at quite reasonable prices. More successful companies include high-end technology in their mix, particularly, computer-aided design and manufacturing machinery and more precision cutting machines rather than manually operated scissors. Worker-related features such as benches that suck chips down keep floors and employee lungs clean. The trade-off of capital for investment and level of furniture produced influences the location of firms. Hand tooled work can be accomplished at less expense in developing countries, but component parts are often incorporated as an element in a large piece that can be assembled closer to the final retail market. Technology also aids in the coordination of design, manufacture, and retail segments in various global locales.
Upholstery
This remains the most literally hands-on segment of furniture manufacturing. The skills and variety of material involved kept it the largest segment proportionally to remain in the United States. Simple machinery used for applying brass and button décor supplement the hand stuffing, trimming, and tying work involved with largely older, experienced workers.
Material cutting methods range from scissors to large handheld devices to computerized machinery. Successful U.S. textile firms have the most mechanized cost-savers/high-efficiency operations. Equipment utilization depends on the company’s ability to absorb the cost, availability of suitably skilled labor, and various furniture price points and styles.
Wood Cutting
Wood cutting multipurpose machinery combines joint, planning, and edging functions to mold lumber into the desired shapes. Table saws can also be automated or come in various weights as handheld machinery. Computer Numerical Control (CNC) routers guide heavy machinery via preprogrammed software designs rather than handheld devices to perform a variety of functions. Computer-aided design and computer-aided manufacturing (CAD/CAM) enables specialized cutting and shaping that greatly increases design possibilities in wooden pieces such as frames. Large sanding machinery is another labor and cost saver following the initial investment. The degree of computerization available, particularly for simple wood shaping, contributed significantly to the successful migration of case goods to developing countries where the government could invest the amount of capital needed to purchase these machines for large factories in new locations.
Staining and Finishing
These remain largely done by hand, but the materials used and outcomes achieved are broader than previously utilized. Negative environmental effects are somewhat reduced by better capture methods that are regulated. Finishing booths protect workers and the outside environment by managing spray applications so less harmful material is released into the atmosphere.
Typical Factory Activities
A typical furniture-manufacturing facility tour begins in a reception area, where the visitor picks up a badge for easy identification as an outsider and meets an assigned guide. From that point on the diversity of the different types of companies appears, but the following presents a combination, drawing on a wide range of facilities engaged in constructing a piece of furniture. Design rooms displaying the types of options and operations or meeting rooms begin the orientation. Firms more heavily engaged in lean manufacturing display the clearest flow of segmented and sequenced activities, since designing an efficient plant is integral to that system. Stores of basic supplies are the first element of a furniture factory, and indicative of the manufacturing philosophy pursued throughout. Lean manufacturing processes stress efficiency, so the amount and type of fabric and wood elements should be clearly visible, marked, and easily attainable. Storage areas should be segmented for inventory at a glance to see how full each spool and cupboard is, with no supplies (including all components throughout the shop floor) spilling out of their container.
Most U.S.-based plants are involved in upholstery, so stacked and containerized rolls of textiles—marked by customer and colored date of order or delivery—are often the first element encountered. Fabric cutters operate on long tables, using handheld electronic cutters suspended by a cord from their power source. Some cutting implements utilize computerized information to guide precise fabric matching for covering patterned arms, cushions, and trim. Less-expensive pieces use a solid color. Rolls of leather are carefully inspected to detect less desirable natural markings and decide how best to cut them for least waste of expensive material. A row of seamstresses who sew cut parts (frequently on sturdy industrial German- or Japanese-made machinery) are nearby, surrounded by bobbins of color-matched threads that are kept supplied by the “water spider” carts circulating among stations of workers.
Another section down the line handles various stuffing material—foam stacked in containers or piles organized by shape, perhaps a large machine for blown filling, and various types of pillow or upholstery material usually delivered the day it is needed since it consumes space but is less valuable. Skilled upholsterers stuff material into sewn casings by hand, sealing with staples or other binding material. Loose pillows are contained in tall, open wooden bins where they can be seen and retrieved but in the minimum space.
Wood work is done in a separate section of the factory, if any case good work is done. The process for wood furniture involves more steps than for upholstery, since wood use in the latter is much reduced and can be restricted to less-expensive wood-type products. The key problem in case good (wooden) construction involves the air and kiln drying process, but prior to that the lumber must be carefully sourced and graded. Raw lumber is stacked in long, tall bins by type and size. Various shapes and types of wood are similarly stored in containers best suited for their specification and stage in the manufacturing process. Wood cutters operate with environmental safety equipment: goggles, ear plugs, face masks depending on their task. In top-quality factories they may cut on tables designed to suck down the debris rather than circulate in the air or accumulate on the floor. Large pieces may be handled on a table with a CAD/CAM device programmed for precision.
Less-expensive wood, such as plywood or composite, may be used for frames with solid wood utilized in more visible places, except for high-value custom work when solid wood throughout is specified. Styles may feature particular cuts, such as “quarter-sawn oak” that displays the grain, or delicate veneer from attractive and carefully matched pieces that are sliced, spliced, matched, taped, and patched, and then defected, planed, and glued onto precut and shaped bases. The type of glue used to adhere wooden pieces can also be a competitive selling point for quality construction or reliance placed largely on sturdy staples. In his colorful book The Furniture Wars, Dugan (2009) relates the next steps in the process:
In other parts of the factory, workers machine, carve, drill, bore, turn, tenon, mortise, and route the lumber… [as it is] being inspected, shaped, sanded, moved, and counted. Next, workers start the sub-assembly process to build the doors, drawers, frames, and panels. Finally, the parts are joined… [but] it’s not ready until workers complete more sanding, inspecting and finishing… [the underlying problem is that “wood attracts moisture, resists bending, and cannot be forged, stamped, melted, molded, or cast. It refuses to cooperate and behave like plastic or metal. It would rather split, warp, check, splinter, and discolor.8
Another variance point involves the style of springs used—their width and number of curls providing different degrees of support, and whether or not and how many if any ties are used to bind them and their coverings together. Workers involved in these areas of distinction are proud to display their value-adding skills. Upholsters who tuck, fold, and secure material around curved arm ends are similarly prized for their specialty.
Factories where finishing work is done dedicate a separate area for this environmentally sensitive procedure that can involve around two dozen separate steps. Workers should operate in an enclosed, well-ventilated room where vapors and materials are contained and exhausted by well-protected workers. Finishes may be sprayed, painted, distressed, padded, ragged, wiped, toned, speckled, dry brushed, or carefully applied by thin layers or pieces. This often involves expensive custom work and may need to be done in layers and stages depending on design elements.
The close to conclusion stage involves repeated sanding, buffing, oiling, polishing, and inspecting the almost-finished work. Higher-quality pieces involve more hand application proportional to machinery use. Packing for shipping requires another set of specialties, since furniture is an unusually bulky, fragile, and expensive item to transport. Specialized furniture haulers, concentrated largely in North Carolina, manage this final step from factory to showroom floor. The amount of friendly interaction between guide/manager and other employees, along with the amount of employee-dedicated spaces, are often important corporate culture indicators.