Competitiveness of the United States furniture industry

Henry Jose Quesada Pineda, Purdue University

Abstract

This study begins with a review of publicly available information to determine the number and reasons for U.S. furniture and wood products plant closures and layoffs. Consolidation, restructuring, and imports competition are main stated causes for permanently closing furniture plants between 2000 and 2003. The second chapter of this study compiles the main competitive strategies of countries exporting furniture to the U.S. from America, Europe, and Asia. We found that low wages, government support, promotion campaigns, and use of advanced technology are main critical success factors implemented in these countries. In addition, we explored what strategies the U.S. domestic furniture manufacturers pursue to remain competitive. Kitchen cabinet manufacturers compete on the basis of customer service, price, and quality. Household furniture manufacturers compete on basis of quality, innovation, and customer service. Office furniture companies use costumer service, product performance, and price. The third chapter describes a study of publicly-owned furniture companies with records in the Standards & Poor's database around the world. The objective was to find key financial factors for companies in this industry based on data from 1997 to 2002. Results show that liquidity, operation performance, and capital turnover are the key financial performance factors. European and American furniture companies performed better than Asian companies in terms of capital turnover. The kitchen cabinet sector was identified as the highest performer over household and office furniture companies in terms of liquidity over the last two years. Chapters four and five are the results of a benchmarking study conducted in six U.S. furniture manufacturers. Two of the six participating companies were awarded the Shingo Prize for Excellence in Manufacturing in 2003. In chapter four, a prioritization matrix was designed to help plant managers identify key internal business processes based on critical success factors. Customer service, product operations, product design, and supply chain management were identified as the most important key internal business processes. In chapter five, the relationship between high performance and best manufacturing practices was tested. Results show that there is a positive relationship between high performance and best manufacturing practices. Given this result, a database of best manufacturing practices was created and is described in chapter.

Degree

Ph.D.

Advisors

Gazo, Purdue University.

Subject Area

Wood sciences

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