Furniture company custom-designed success: mass customization and orders cut on demand have carved a niche for New Liskeard's Three-H Furniture Systems.

Mass customization is the key to survive and thrive in a highly competitive North American market for a New Liskeard office furniture maker.

It's the standing order of the day for the 87 employees at Three-H Furniture Systems, which specializes in commercial office furniture built to client specifications.

Brian Conlin, vice-president of operations, says mass customization means having a fully automated production facility capable of doing "customization on the fly," with special programming tools on their CNC machines known as parametric programming.

Allowing customers to customize sizes in furniture within engineered standards is what separates them from their larger North American competitors, he says.

"If you need a 73-inch desk, we allow you to buy it without additional cost or lead time with production. Most of our competitors do not relish the idea of customized sizes."

It's that kind of diversity that has allowed the company to hold its own against larger Canadian and American competitors such as Lacasse, Global, DSI Industries, Hon Industries, Herman Miller and Steelcase.

Operating from a 30,000 square foot plant on Radley's Hill Road, Three-H exports about half of their 15,000 to 20,000 pieces produced each year to United States customers, including a small fraction to Puerto Rico.

The company posts about $12 million in total annual sales and by year's end expects to boost its workforce to 95.

Established in 1973 by founders Heinz Dittmann, Helmut Pedersen and Helmut Moeltner, the company began by manufacturing middle- to high-end European-style residential furniture, along with juvenile and adult bedroom sets and wall units.

Moeltner, who operated a nearby melamine laminating plant, wanted to promote a secondary industry in the North and set up Three-H with Dittman, an experienced cabinetmaker from Germany.

Three-H shifted into office furniture when the recession of the late 1980s hit and the residential furniture market began drying up. They began looking into a stronger and more dynamic sector.

"It's a much larger and simpler market," dealing with commercial institutions and businesses rather than the smaller Mom-and-Pop-type shops, says Conlin.

Today, the company produces a variety of middle- and high-end executive office furniture, work stations, conference tables, wall units, computer furniture, file cabinets and office accessories.

The company prefers to steer away from Big Box stores, shipping primarily to the smaller, more specialized retail outlets in Canada and North America including the Grand & Toy company.

They also ship to individual dealers in Toronto including upscale dealers like Harkel Office Furniture and TransAmerica, a major Philadelphia-based office equipment retailer.

"The (U.S.) potential is still huge there for what we need," says Conlin, who estimates their product appears in about 250 outlets across North America, primarily on the eastern seaboard, as far south as Florida.

The company also maintains a permanent showroom at Chicago's Merchandise Mart, an area they consider a growth market.

"There's huge potential there," says Conlin. "The city of Chicago has close to 12 million people, (almost) more than all of Ontario.

"We're very aggressive with our marketing strategies in targeting certain markets," including the U.S. Midwestern states, he says.

"We're constantly tackling and charging the market rather than sitting back and waiting for it to come to us."

Conlin, who has been with the company since its earliest days, says the decision to export was obvious given the limited customer base in Canada. "If we were going to grow the company, we had to either stay home or go big."

He says the office furniture industry has sustained an "awful blow" in recent years, some of it caused by offshore imports but mostly by the stalling U.S. economy.

"The American market is so large, it drives everything and it has been relatively slow." Big office furniture makers such as Steelcase, considered the IBM of the industry, has suffered through 6,000 layoffs over the last three years.

Conlin attributes his company's longevity to designing a product geared for an upscale, demographic-specific market. All of their product development, including engineering, software development and design, is done in-house.

"Because we are a relatively small company, customization is a niche, there's no question about that."

One of the challenges of being located in Northern Ontario, is the distance from major markets, especially with fuel prices as volatile as they are. "To put ourselves on an even playing field, we have to land (product) in Baltimore as anyone from Toronto would do," says Conlin.

But through "clever shipping arrangements," they are able to strike deals with trucking companies by providing valuable back-hauls for carriers coming north with goods from southern Ontario.

www.three-h.com

By IAN ROSS 

Northern Ontario Business