Steelcase, the world’s largest contract furniture manufacturer, its Q2 2020 Earnings Call, suggests that to compete against the comfort and safety of working from home, a post-COVID “recovery will include reinvention of the workplace” with companies retrofitting, reconfiguring, and reinventing their office spaces for employee safety.
Herman Miller’s recent report of a 300% increase of its home office category, on the other hand, could be influencing a bullish outlook by some contract manufactures expecting continued growth in the work from home trend. iMovR, for example, is “offering products ideally suited for home office workers.”
To make sense of these two opposing responses to the post-COVID era we chat with Heather Corrigan, Furniture Marketing Manager, Lectra North America to get her insight on what’s happening in the industry and how contract furniture manufacturers can position themselves for a successful rebound.
COVID-19 is forcing today’s worker to explore new ways of working and companies to reimagine their traditional workspace. What new opportunities are available to contract furniture manufacturers confronting a changing workplace in a post-COVID era?
The boom in ecommerce and the residential furniture market sector may offer contract manufacturers new opportunities to partner with retailers. Retail consumers want multi-functional products similar to what exists in many commercial workspaces and I think this niche of ancillary products may be a way to approach new business growth.
CBRE shared some additional thoughts in their recent article, The Way Forward. They write about how collaborative spaces will still be critical even in the new workspaces created during and post COVID. The products, however, used in those spaces will be different – they must have better acoustic capability and technology integration to ensure ease of connecting to remote workers.
The article also talks about the need for furniture to support more than one purpose and it must be adjustable, flexible and agile. CBRE concurs that the office is NOT DEAD but it will look different and workstations may decrease but there will be an increase in ancillary furniture and need for flexibility.
Another timely resource, providing clarity to the market in this area, is BIFMA Compliant. This industry-wide registry of furniture products that conform to BIFMA safety and durability standards is a new opportunity for contract manufacturers to differentiate their products within the context of the changing workplace. BIFMA Compliant will go live to the public March 2021.
Other paths for contract furniture manufacturers to explore are producing safety and protective equipment as well as diversifying product offerings to serve the government or medical sectors. As you can see, there are many ways to move forward.
In response to declining commercial sales, many furniture manufacturers are seeking to increase their direct to consumer revenue streams. Switching from commercial to residential furniture manufacturing means organizational and business processes will need to change. How can contract furniture manufactures transform their production processes while maintaining the stability and revenue of their core business activities?
The key to successful transformation lies in gradual implementation. It is important, certainly, to test feasibility when exploring new revenue opportunities and to make sure existing equipment meets current production demands. Smart companies will mitigate risk by finding ways to capitalize on shifts in consumer demand without restructuring their business operations or redefining their business model.
Furniture on Demand by Lectra, our most integrated solution, supports contract furniture manufacturers in this endeavor. It also makes it easier to support the more flexible ancillary products that will arise out of the pandemic office transformation. Companies seeking a flexible production model that is adaptable to a variety of production needs, without disrupting their current revenue streams, can use our solution to minimize risk during their transition or when adding new flexible and dynamic products to their offering.
Balancing lead-time against product quality often requires controlling for product variety (material, style, size, etc.) when taking and placing order requirements. How can contract furniture companies streamline their production processes to deliver furniture customized to the many different personal styles of retail customers and still deliver at the speed of mass-production?
COVID has taught us that being able to pivot your manufacturing to manage different revenue streams, even if only for a short time, is critical to staying alive and profitable. Contract furniture companies have been doing customization for a long time. However, they usually work on a specific job or project that has a long enough timeframe to enable efficiencies and cost savings.
In shifting to the residential furniture market or adding more flexible ancillary office products, manufacturers may face different time constraints as well as fabric and customization needs. Matching and mastering small pattern repeats can often be a challenge in this area and can be hard to master.
The Furniture on Demand by Lectra solution automates the production process, from order processing to cutting, using artificial intelligence, big data, and the industrial internet of things to manage a wide diversity of production runs and materials to create efficiencies that speed up the manufacturing process.
