by Company’s domestic upholstery manufacturing capabilities remain a key asset in period of high demand
ASHEBORO, N.C. — Klaussner Home Furnishings hasn’t been immune to certain industry challenges, namely the increasingly difficult task of recruiting labor.
But it also hasn’t kept the company from building on the success of its upholstery production facilities in and around Asheboro, just south of High Point.
Yet instead of expanding its physical footprint or hiring just any workers to fill jobs, the manufacturer has worked within its existing plants and work force to boost productivity, improve quality and lower lead times to roughly a third of what they were over a year ago.
Zack Chehaitli, executive vice president, and chief operating officer, and Len Burke, vice president, marketing, recently met with Home News Now to talk about some of the steps the company has taken over the past 12-18 months to improve its processes.
They include the following:
+ Shifting from a compensation structure based on piece count to a straight wage model. This has helped maintain a consistent work schedule throughout the week as opposed to workers choosing to work at their own pace a piece at a time. Thus, workers are expected not only to work a full five days a week, but also meet production and quality goals along the way. Competition among production line teams also helps fuel worker engagement and productivity.
+ Simplifying tasks on the production line, which helps workers train on the job versus going through a 16-20 week training program. On day one following orientation, workers now start their on-the-job training with a coach that guides them through the necessary steps. This gets them performing the job they were hired to do almost immediately.
+ Better utilizing existing plants to boost productivity in individual facilities. For example, three weeks ago, Klaussner added three production lines — for a total of 16 — at its main 600,000-square-foot Asheboro stationary and motion upholstery plant. With each additional line, the plant can now produce as many as 100 more pieces per day per line for a total of 300.
+ As part of a footprint consolidation between its Candor and Asheboro operations about a year ago, the company shifted one operation to Asheboro and reduced the number Candor upholstery facilities from three to two that now total around 225,000 square feet. In addition to reducing transportation and logistics costs between the Candor and Asheboro plants, this shift allows the company to tap into a larger labor pool in Asheboro. The company also said it has boosted its motion upholstery output from 100 to 150 pieces per day to 200 to 250 per day.
+ The company remains vertical in nature — which has helped it avoid disruptions in supply chain — by pouring its own foam, making its own frames and cutting its own fabric and leather. In addition, it has narrowed its SKU count to focus on the most efficient, best-selling items and configurations.
These are just some of the key initiatives the company has pointed to in its success during the pandemic. While much of the effort has been to address labor shortages head on by finding – and retaining – good associates, the model also has helped it avoid some disruptions in supply chain.
In addition to achieving a more consistent work flow resulting from the change in pay structure, for example, the company said it has boosted wages as much as 25% in the process.
And by simplifying the production process into more easily achievable tasks, the company has been able to implement on the job training, while also lessening the need to find more experienced workers.
“We have simplified our processes to make it easier to build and build better as well,” Chehaitli told Home News Now. “This actually was tremendously helpful for us with all the challenges in the labor market. You don’t have too many people out there with 20-25 years of experience. So you have to get somebody who is working in a restaurant or somewhere else and teach them how to build product in the right way.
“So the way we went about this is simplifying our manufacturing process. We broke it down quite a bit into small incremental pieces. Simplifying our processes has given us tremendous edge and a competitive edge to making the product right and with the right quality. I don’t have to teach an employee how to build a sofa from start to finish, they only need to know how to build this one task out of 200 tasks. So this is something that has helped us tremendously in how we set up the lines, who does what when and the timing. So we have done a lot of process engineering and process manufacturing that helped us with quality and velocity.”
The company, he noted, also has doubled its overall productivity with the same number of workers. At the same time, the company has lowered its defective rate on shipped goods to where it’s almost non-existent compared to its overall volume.
“For productivity and quality to both improve, at the same time, that is a pretty major accomplishment, and that gives us a competitive edge,” Chehaitli said.
In addition to quality and consistency, the company said it is able to deliver much more quickly. It’s lead times are now down to eight weeks or less, compared to as many as 25 weeks in early 2021.
Part of this, Chehaitli said, results from the company’s drive to get the product right every step along the way.
“Any quality problem we find is driven back to where it happened, and we look at the process first and also the operator because we want to be as mistake-proof as much as we can,” he noted. “Upholstery building is a labor intensive process, so inherently you are going to have some mistakes – that just happens. So the angle we take is how can we reengineer the process so there is less probability of a mistake happening.”
He and Burke also noted that the culture and team spirit within the organization also holds everyone involved in the manufacturing process accountable. And by holding each other accountable, team members also have been known to speak up for each other when they think someone deserves a raise.
The company eventually would like to add another 100 or so workers to its overall ranks of 1,100, which includes roughly 900 in operations. But given the aforementioned improvements, from the on-the job training to rethinking the footprint of its factory floors, bringing on more workers right away is not as critical as it might be for some manufacturers.
Thus, officials note, the company is in a strong position to continuing to serve its customers with speed, quality and consistency.
“Really it boils down to quality and velocity and they go hand in hand,” Chehaitli said, noting that having to rework product to address mistakes “means more materials and it means more labor and those are the two things we are not able – and nobody is able – to get as fast as we want…So you better do it right early on. So to me the pandemic was a catalyst for everybody to improve quality and that’s what we did – we improved quality and system velocity.”
While the industry is seeing some slowdown at retail, Chehaitli said the company continues to see growth and demand for its domestic upholstery line. Today it represents as much as 65% of overall sales compared to about 50% prepandemic due to demand in the marketplace for domestic goods.
Part of Klaussner’s success, too, he believes is due to the company’s efforts to respond to the needs of retailers.
But he said it’s also been a team effort where associates have embraced change and supported the company’s efforts along the way.
“We have a really tremendous team, and everything we have accomplished and continue to battle day in and day out is truly due to a tremendous team effort throughout the organization,” he said. “Everybody is picking up 100 to 120 percent every day. We know we have challenges, but the difference is what do we do to get things done in spite of those challenges and how can we get things to our partners fast and with the best quality possible and most cost effective way to make it profitable for everybody.”
