North American component makers fill the bill.

It is clear that outsourcing components is a trend that continues to grow in the wood products industry for a variety of reasons. Wood & Wood Products asked a trio of U.S. manufacturers to discuss why they buy components from North American sources and what they look for in a supplier.

Outsourcing Helps NC Cabinet Firm Broaden Product Line

Ultracraft has been making cabinetry for the kitchen and bath industry since its founding in 1986. The company, located in Liberty, NC, has 225 employees.

Jerry Riley, director of purchasing, says Ultracraft outsources doors, drawer fronts, drawer boxes, mouldings and smaller items such as rosettes, turnings and pilasters.

"We purchase each piece for a different reason," Riley says. "One major reason for purchasing wood drawers and doors is that we are able to offer a broader product line without increasing production costs. When we purchase the items, we know our cost, since it's a given and fixed rather than being affected by internal efficiency and other variables. Outsourcing these items also gives us the ability to focus on other aspects of our business."

Riley says the company began a pilot outsourcing program in 1994 when it purchased a single door style. Through the years, Ultracraft has continually added items to its outsourcing shopping cart. Today he estimates that the company outsources 95 percent of the solid wood components it uses. "I think that tells you how successful it's been for us," he says.

Riley adds that Ultracraft takes time to find and evaluate manufacturers that look at the outsourcing agreement as more of a partnership than a business transaction. "We look for a relationship where we understand each other's goals. We want to both be moving in the same direction. Communication is a very important key to a good relationship between suppliers and companies purchasing components."

Riley says it is important to have frequent meetings with his suppliers to make sure they understand the needs of the company. "The customer isn't concerned if we make a part internally or purchase it, but he wants to know that his order will be high quality and delivered on time.

Company's Outsourcing Program Speeds New Product Development

Bob Misterka founded Demis Products Inc. of Lithonia, GA, in 1975.

President Brian Misterka says the company, which manufactures unfinished pine wood products for the arts and crafts industry, employs 103 people and runs two shifts daily. Misterka says the company's product line is extremely varied from tissue boxes and plaques to rocking horses and wooden stools.

Demis Products recently began purchasing wood turned legs for stools, a new item for the manufacturer, which sells to retailers like Michael's and Hobby Lobby. Misterka says the company was very satisfied with the first order and has ordered another 60,000 woodturnings.

Misterka says purchasing items like the turned legs gives the company flexibility without necessitating spending on new machinery. "We decided to outsource the item because we don't have the specific equipment needed to make it. One of the advantages to buying a component is that you don't take up machine time in your factory making the part and you don't have to purchase a specific machine to make one part. We have 100,000 square feet of manufacturing space, but we can't do everything."

Misterka likes purchasing from North American suppliers because it is easier to do business with companies that are close by. "When you purchase locally you are dealing and talking to someone in your time zone rather than halfway across the world. Delivery will be quicker and if there's a problem, you can resolve it much quicker, rather than waiting for a container to be shipped in a month."

Outsourcing Partnerships Make a 'Signature' Difference Kent Martin, president and CEO of Signature Custom Cabinetry Inc. in Ephrata, PA, describes his company's products as "fully custom."

Signature manufactures residential custom cabinetry distributed through a national dealer base. "Nothing is stocked and nothing is built until we have an order," Martin says. Signature Cabinets employs 107 workers. It offers a wide variety of wood species and more than 100 different door styles.

The company has been buying components since it was founded in 1989. Currently it purchases doors and drawer boxes.

"We choose to outsource those items because we have found vendors who can provide high-quality components on time." he says. "It would be difficult for us to do it for the same price. We find we can offer a variety of wood species and styles this way."

Martin stresses that it is important to establish a good working relationship with a supplier and that two-way communicatation is paramount. "You are partnering with them. It's important to share with them what you need from them to achieve your goals."

Martin says he looks to do business with component suppliers that are interested in building a long-term, mutually beneficial relationship. He says he does not "price shop" but looks at the bigger picture. "We select vendors who can meet our needs for quality and on-time delivery. We need for them to be innovative and keep up with the trends. Ideally, we want a relationship with a supplier who will bring new products to us."

Outsourcing components has helped the company avoid variables in costs. "We can achieve lower work-in-progress and cut the need for raw material, achieving a 'just-in-time' approach to manufacturing," Martin says. "We work with our vendors on a daily and weekly basis to control the flow of material. Good communication has allowed us to keep low inventories and reduce overhead costs."

RELATED ARTICLE: Quality Is Job One for WCMA Members

The ability to manufacture wood components and dimension products with "consistent quality" is seen as the leading reason for why North American wood product companies purchase parts from U.S. and Canadian companies belonging to the Wood Component Manufacturers Assn.

Fifty-eight percent of WCMA members participating in a recent Wood & Wood Products' survey cited "consistent quality" as their top selection when ranking a list of six possible choices. "Good communication" and "just in time delivery" ranked second and third respectively.

"We stand behind the quality of our products," says Van Moore of Klise Manufacturing. "We also have the ability to quickly respond to customers and to help them with problem solving."

Garry Bagby of Vista Wood Products agrees that the ability to deliver consistent quality includes being able to rapidly respond to customer needs. "If there are problems with delivery or quality, we can correct it within a matter of hours or days. The same types of problems could take off-shore suppliers weeks or months to resolve."

"Better communication and service" are keys to a successful component buyer/seller relationship, says Denis Moisan of Dynasty Wood Turnings. "We know our customers and they know us."

Brian Brown of Coastal Lumber Co., adds, "We do out best to maintain good communication with various people at each of our customer' plants including purchasing, plant management, quality control and design."

Speedy Delivery

To more effectively compete with foreign component sources and to help their customers be more competitive as well, many WCMA members say they are focusing on reducing the time between taking an order and delivering it.

"We are now working to hold more inventory ahead for the customer," says Steve Helffrich of Thompson Maple Products. "We are also becoming more agile so that we can better satisfy short lead times and order cycles."

Tim Garnett of Rowe Furniture, adds, "By shortening our lead times, we are able to help our customers lower inventory costs."

In addition to shortening the order-delivery cycle, Chris Watson of Conestoga Wood Specialties says his company is working to more effectively process smaller batch sizes so that customers can order smaller quantities of product