InsideFurniture

BUSINESS REALITY THERAPY: Severe pressures and obstacles will linger, demanding alternatives for survival and growth

Blognote: My friend Steve Taylor, interim director of the Franklin Furniture Institute at Mississippi State University, provides key insights and a plan of action:

Once again – for the fourth time in six months – we learn that another Northeast Mississippi furniture company is closing its doors. This time 300 people will be put out of work. We can only hold our breath and hope this will be the last such announcement, at least for a while.

Alan White management cited the “usual suspects” as the reason for their closing. Specifically, intense price competition, increased material costs related to Hurricanes Katrina and Rita, and a shrinking customer base, as reported in this newspaper. There can be no doubt that these are severe pressures. There also can be no doubt that most of the severe pressures now faced by the industry will not go away in the near future.

This means that management and employees must learn to do many things very differently. It won’t be easy, but the alternative is much harsher. Here are some things that might prove helpful.

Cut costs. Yes, this is a standard recommendation. But consider new ways to reduce the costs of doing business. For example, researchers at our Institute often find that companies over-engineer their products by putting in redundant materials.

Now we certainly are not recommending lowering quality (in fact, we think most manufacturers can and should improve quality).

Once again – for the fourth time in six months – we learn that another Northeast Mississippi furniture company is closing its doors. This time 300 people will be put out of work. We can only hold our breath and hope this will be the last such announcement, at least for a while.

Alan White management cited the “usual suspects” as the reason for their closing. Specifically, intense price competition, increased material costs related to Hurricanes Katrina and Rita, and a shrinking customer base, as reported in this newspaper. There can be no doubt that these are severe pressures. There also can be no doubt that most of the severe pressures now faced by the industry will not go away in the near future.

This means that management and employees must learn to do many things very differently. It won’t be easy, but the alternative is much harsher. Here are some things that might prove helpful.

Cut costs. Yes, this is a standard recommendation. But consider new ways to reduce the costs of doing business. For example, researchers at our Institute often find that companies over-engineer their products by putting in redundant materials.

Now we certainly are not recommending lowering quality (in fact, we think most manufacturers can and should improve quality).

POSITIVE PMS WORKS: Simple courtesy can be priceless

Word reading: Comments from January 25's posting (scroll down), contain wisdom and insight.

FROM DONNA KOENEMAN:I enjoyed your comments on the shopping experience you perceive that most customers appreciate at furniture stores, retail organizations and even airlines.

Let me ask you one question about your flight when you ordered your ticket did you shop on the internet for the best possible price, if you could have saved an additional $100.00 on that flight and a computer flew your plane would you have cared?

Service costs money that must be reflected into the markup on goods and services, every person who requires the personal touch must realize it affects the cost they pay for goods.

The consumer today is all about price the constant shopping for the best deal doesn’t afford us the luxury of provided consumers with all the additional services provided ten years ago, the trained designer, free delivery, an unlimited return policy, customer satisfaction with no questions asked.

The industry either retail or distribution is required to cut any additional costs to provide the lowest price compared to the next guy to make the sale. All organizations must slash operational expensed find ways to bring the price of product lower and survive.

When you speak of a retailer getting out there and selling the customer, that’s the problem of many organizations, working in the business rather than on it is counterproductive.

When a store owner is on the floor he removes any creditability that a commissioned sales associate has because the owner can offer lower price and usually does.