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Fournier tries an imported idea.

ST. PAUL, Minn. -- With the implementation earlier this year of a Japanese-inspired manufacturing philosophy, Fournier Furniture, headquartered here, is hoping to give new meaning to the phrase "less is more."

Since Feb. 27, when LADD Furniture sold Fournier to Gefinor Acquisition Partners -- a New York international merchant banker --and Fournier senior management, Fournier has been operating under kaizen -- Japanese

for "continuous-improvement" -- management, a manufacturing philosophy that seeks

to better serve customers, in part, through the use of leaner, more efficient production methods.

Privately held Fournier, which places its current sales at about $45 million, is counting on a combination of kaizen and acquisitions to more than double company sales in 12 to 15 months.

Earlier this month, Fournier put its acquisition strategy in motion when it reported plans to acquire Modar, a Benton Harbor, Mich., furniture components maker owned by Knape & Vogt.

Fournier executives said that while Modar does not currently produce furniture, it has all the equipment necessary to do so. Also, Fournier intends to grow Modar's current OEM component business.

Fournier executives told HFN at press time that the manufacturer is currently evaluating additional companies for acquisition.

"Our partners want us to be very aggressive, both in terms of internal growth and acquisition," said Fritz Meyers, Fournier's president and chief executive. "Our plan is to hit $100 million and then possibly do an IPO," he said, adding, "and with Modar in the quotient, we would most likely hit $50 million next year. Factor in two additional acquisitions, and we could be very close to that $100 million mark in the not too distant future."

Fournier executives -- including Vince Cvijanovic, senior vice president of sales and marketing; Mike Rigsbee, VP of finance, and Gary Rife, VP of manufacturing -- say the company is on track.

Even more telling, however, is that this assessment is shared by a growing number of Fournier's customers, including Susan Ficarra, furniture buyer at Pergament Home Centers, a New York-based chain. "I visited Fournier's manufacturing facility recently, and was very impressed with the manufacturing enhancements that the company has made as a result of the kaizen production tactics," Ficarra noted. "I was particularly impressed with the square footage the company had reclaimed as a result of efficiencies gained through kaizen strategies.

Currently, Ficarra is buying home office and home entertainment products from Fournier, and plans to add a number of kitchen items to her assortment.

"We looked at Fournier for a number of years, but this is the best the company has looked in years," she remarked.

Fournier is a "niche player that has been able to take business from other players in the flat-pack furniture segment," Ficarra said. "The company is flexible. They ship on time, and they give me designs just a little different from the other guys. So, what's not to like?"

Teresa Segal, furniture buyer for Caldor, agreed. "In a very short period of time, Fournier has demonstrated an ability to translate the hot furniture-store looks and bring them to market at popular price points," she reported.

One example, Segal said, is Fournier's RTA curios. Caldor carries a number of Fournier curios, which it puts on sale at $149.99 each. "By comparison, national chains are offering similar items at $249.99 each," Segal added.

Fournier's ability to compete at all price points has also helped the company secure placement with Venture Stores. "In our case, we are using Fournier to supply a small assortment of opening-priced items," said Jim Bufalini, furniture buyer.

Fournier executives attribute much of the company's gains to the kaizen processes.

Cvijanovic said Gefinor is a general partner of the Kaizen Breakthrough Partnership, a fund that aims to acquire and manage middle market U.S. manufacturing companies, including the use of kaizen production.

Myers said, "The buyout from LADD occurred at the end of February and we began implementing kaizen concepts on March 11."

Since that time, the company has undergone 23 kaizen "events," which Cvijanovic described as week-long sessions during which time some fundamental streamlining is made a part of the manufacturing process.

"Each event has a team leader, coach and team. They identify a problem, then set about solving it. At the end of the week, the team gives everyone in the company an update on how they did."

As an example, Cvijanovic said that the first kaizen event centered on reducing set-up time for drilling operations.

"We knew that in order to grow and compete on a larger scale, we had to make a number of wholesale changes to the way things historically had been done at Fournier," Cvijanovic said. "The old philosophy from the previous management was to focus on non-mainstream looks and products," he continued. "Plus, there was also a residual mindset that if someone else was making a certain type of product, Fournier wasn't interested."

"And we also knew that in order to make kaizen manufacturing work, we would need cooperation from everyone -- at every level -- of the company," said Rigsbee.

Not unexpectedly, the initial reaction from some of the plant employees was less than enthusiastic, Fournier's management recalled. "Obviously, some workers were worried that by helping us enhance productivity, they might be helping themselves out of jobs," Rife added.

To put those fears to rest, Fournier guaranteed its full-time employees that no one would lose his or her job due to the implementation of kaizen manufacturing.

Then, the company set about the business of improving efficiencies. Initial kaizen efficiencies allowed the company to reduce the workforce from more than 230 people to about 160. As promised, no full-time employee lost his or her job.

By switching to kaizen production, which centers around production on demand, as opposed to mass production, the company was able to reduce its board inventory by 75 percent, Cvijanovic explained. "We were also able to greatly reduce the set-up time. Now, we only laminate the actual boards that we will cut during the next 24 hours, which has also netted us a significant reduction in related inventory costs."

Using kaizen techniques, Fournier has also sharply reduced the laminating time needed to switch from one paper to another. "That function used to take an hour, now we have it down to 10 minutes," Rife explained.

Other major changes involved the company converting its production from conventional lines to work teams called cells. "In a work cell, all the processes needed to make a given item are there at the cell. You have a small amount of raw materials at the cell and finish the item at that cell. This one-piece flow allows you to go right from the cell to the box," Rife said.

Materials such as molding, for example, used to tour the factory as products were assembled, Cvijanovic said. "In the past, it would be cut at one end of the factory, then shipped to another part of the factory to drill it," he said. "Then it was handled again to be moved somewhere else."

Myers added, "But now, we pulled those functions together, which has eliminated wasted time and movement."

The bottom line of these and other kaizen improvements, is that the company is producing goods with two-thirds less work-in-progress inventory. Cvijanovic added these and other kaizen techniques have allowed the company to reclaim as much as 40 percent of the facility's usable space, space that can now be used for additional manufacturing.

For more control, the company has also installed one line that starts with raw materials and ends with a finished piece of furniture. Designed to handle short runs, the line allows Fournier to better respond to the needs of its customers.

"Before we established this line, we had to make the customer wait until we had enough demand to make an item. Either that, or we would end up making 1,000 of an item, even if we only needed a fraction of that amount," Cvijanovic said. "Now, in addition to being able to respond to the need for short runs, we can also use this line to meet the demands of some of our mail-order retail customers who typically place smaller orders."

In addition to specifically measuring and monitoring production and downtime, the company has also focused on setup time, a function that is equally important to the overall efficiency of the plant.

"To help reduce set-up time, our employees told us that we needed to create a position of tool coordinator. These people have a production schedule for each cell and set up the bits and chucks for the drills that will be used by the cell," Cvijanovic said.

"Our goal is to constantly reduce set-up time, and this measure played a large role in allowing us to cut our set-up time in half," Cvijanovic said.

Fournier executives say they can gauge production requirements, literally hour by hour. "We know that there are 430 minutes per person per shift and that we have to satisfy the customers' demands in that time. So if we divide the available time by the number of units needed, we know exactly how many of an item we need to produce each hour," Rife noted.

"In fact, our motto has become 'win the hour, win the day, win tomorrow,' " Rife said.

Cvijanovic added: "The way we are going is very close to the way retail survivors will be working in 10 years, which is to say, with very little inventory. The consumer will be able to buy a product without having to wait eight weeks for it, and the retailer will be able to replenish it quickly, on a pull, not push, basis."
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Title Annotation:Fournier Furniture and kaizen management
Author:Allegrezza, Ray
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Date:Nov 25, 1996
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