Geiger gears up for greater growth.
Imagine engineers from the Ford Motor Company having lunch and playing golf together with their engineer friends from General Motors. Although it's unlikely to happen because of the competitive history driving the U.S. auto market, that same dream scenario has become reality in the contract furniture industry. For years, contract furniture manufacturers have been intensely private with their products and manufacturing processes. Yet in an interesting move, Geiger Brickel, (annual sales $40 million) a manufacturer of mid- to high-end contract furniture, has entered into a sales agreement that includes manufacturing wood casegoods for contract furniture industry giant Herman Miller (sales $1.08 billion). The move is designed to help bring the company closer to company founder and owner John Geiger's dream of growing to $100 million in sales, according to OfficeInsight, a weekly publication serving the contract furniture market.
How the company came to its present status is a story of growth, timing and effective marketing. Tying all of these areas together has been the company's strong attention to detail with the help of some high technology and a sharp eye toward quality.
"Today's consumers have very high expectations for everything they buy," said Mike Milligan, group executive for client services with Geiger Brickel. "If you don't make it right, you're not going to make it in this industry."
Turning the clock back to post-war Germany in the 50s, Geiger attained cabinetmaking skills and emigrated to Canada. In 1964, after a brief stint working for an office furniture manufacturer, Geiger opened the doors of his new company, Interiors International Ltd. (IIL) and began manufacturing custom millwork.
"It's very difficult to be successful in the millwork business, and we soon learned that manufacturing contract furniture was the way for us to stay in business," said Milligan.
Although the company still maintains a 25,000-square-foot facility in Toronto to supply finished metal components, its headquarters is now located at a 175,000-square-foot facility in Atlanta, Ga. In addition, the company also maintains a 90,000-square-foot facility in Lake Mills, Wis., which it obtained through the purchase of the Brickel seating company in 1993. The Atlanta facility manufactures wood case goods, desks and tables, while Lake Mills is responsible for seating production.
The mega mergers of the late '80s and early '90s, coupled with the recession of the early '90s, both affected the contract furniture industry with turbulent buyouts. Yet Geiger chose to implement a strategy to keep the company independent. The company decided that during the mergermania trend, it simply would not compete in sectors of the market where it could not be competitive. The company would walk away from the temptation of participating in deeply discounted large system projects, in which manufacturers typically fought to outbid one another by offering even deeper discounts.
However, it is not to say that the company pulled in its horns during mergermania. In fact, the company participated with its acquisition of Brickel seating in 1993. Brickel, a manufacturer of original, high-quality seating and textiles, had become overextended and declared bankruptcy in 1992.
"We chose not to save Brickel from bankruptcy because it would have meant buying the company out and then assuming all of the debts," said Milligan. "We just waited until they filed for bankruptcy and then purchased the assets."
The purchase has seemed to dovetail well with Geiger's overall market plan, because the markets served by Brickel's high-end seating overlapped nicely with the case goods market Geiger served. As an example of this fit, all Geiger wood finishes and leather upholsteries can be ordered on Brickel seating. Brickel's Lake Mills, Wis., manufacturing facility has also risen to the challenge.
"Brickel's Lake Mills location has exhibited exceptional performance since we purchased them because of their very capable work force," said Milligan. "The only thing we injected into the facility was better management and a more defined sense of direction."
In May 1995, Herman Miller Inc. entered into an agreement under which Geiger Brickel would purchase Miller's Sanford and Madiera casegoods systems and agreed to manufacture them for Herman Miller, as well as the new Keyeira collection, which was designed by Geiger exclusively for Miller. (See sidebar, P.80.)
"The bottom line of the manufacturing agreement and subsequent sales alliance is projected sales increases for each manufacturer, their sales representatives and their dealers beginning in 1996, and a competitively unexcelled ability to meet customer needs by providing complete office furniture solutions, concurrent support and field service," said Michael Donahue, vice president of sales and marketing for Geiger Brickel.
The agreement will represent an estimated additional $6 million in sales this year for Geiger, according to Milligan, and will allow the company access into distribution channels it had previously been unable to serve.
"The move is not typical of the contract furniture industry because there is not a lot of openness in our industry," said Milligan. "Because it is such a competitive industry, companies are very concerned about how to execute their ideas in manufacturing and still remain competitive."
Background into the agreement shows that two years ago, Herman Miller decided that it wanted to get out of wood case goods production, but knew that it still had customers it needed to serve.
"I think Herman Miller found that they were obligated to their customers to provide wood products, but found it unprofitable," said Milligan. "They decided to get out of wood production and I can't blame them because wood is a natural material and is difficult to work with. When they made the decision to have someone else manufacture their wood products for them, it was important that they do it right. And they chose us because of our quality, design heritage and our shared value of customer commitment."
Andrew McGregor, general manager of North America for Herman Miller Inc., echoed Geiger's capabilities in a Jan. 8 press release.
"During the past ten years, Geiger Brickel has proved itself particularly adept at surviving and growing under rapidly changing market conditions," McGregor said. "The company has been able to readily provide wood case goods of consistent high quality, and has demonstrated an ability unusual for wood manufacturers to produce high volumes in short cycle times, offering wide-ranging capability and few warranty problems."
Miller's decision to go with Geiger also meant the closing of Herman Miller's new facility in North Carolina. Instead of manufacturing in North Carolina, Geiger Brickel felt it was capable of meeting Herman Miller's needs at its Atlanta facility.
"We picked up some equipment from that facility which will help us maintain production," said Milligan. "We obtained a Weeke point-to-point machine and a conveyor system from Herman Miller's North Carolina plant."
The effect on production from the new line is also reported to be minimal, according to Milligan.
"The products we manufacture for Herman Miller are modified slightly to fit our production methodologies and dimensional standards," said Milligan. "For example, drawer box dimensions had to be changed to match our existing standard."
Tons of machinery (literally)
Walking through the Atlanta facility, one is quick to notice not only the number, but also the different types of high-tech woodworking machinery present in the facility. The machinery is not only necessary to aid in the assembly and processing of veneered panels and solid wood edgings used in casegoods, but also because so many different parts are manufactured for the various product lines. (See sidebar, P. 72.)
"We use technology to improve speed and quality, not for technology's sake," said Milligan. "Where handwork is required to achieve the acceptable quality, we do not compromise. For example, we purchased a Heesemann sander which not only took out the inconsistencies of the old system, but also met our expectations. However, we still perform hand veneering and sanding of certain designs."
The company uses a wide variety of veneers to cover its particleboard cores, but cherry, maple and anegre are the most popular veneers used, according to Milligan.
"We're seeing more specifications for lighter, natural finishes used in our products today," said Milligan. "Lighter finishes make the office brighter and more upbeat than darker finishes. It is important as workers spend more time at the office than at home."
Veneers are hand selected, graded and cut to size on Casati and Savi veneer guillotines. The matched leaves are then joined on a Diehl veneer splicer.
The company uses particleboard in a variety of thicknesses and from a variety of suppliers. A small supply of MDF is also delivered to be used in the Tintacoat line, a line of painted products which require a smooth surface and receive no laminate or veneer.
Delivered by railcar pulled right to the company's loading dock, a forklift unloads the stacks of substrate before they are sent to a Holzma EL-71 CNC panel saw equipped with a Leuco carbide-tipped circular saw blade and cut to size. Programming for the saw can either be performed at the saw or in the front office.
Both substrate and veneer meet at either of the two Ott hot presses or the two custom cold presses, depending on their applications. Wood panels are sent to the cold presses, where cycle times average four hours. The hot presses press all finished pieces on a 5-ft x 10-ft platen heated to 180F. Cycle times are 55 seconds.
After pressing, panels are then trimmed to size on one of the company's two double-end tenoners, a Celaschi (Danckaert) and SCMI. Wood edgebanding is applied on one of two IMA double-sided edgebanders. Laminate is available as a surface and edge option, but only if the customer requests it, according to Milligan. Boring and machining of panels is performed either on a Weeke point-to-point machine or on one of two Busellato boring machines equipped with Leuco insert tooling.
In addition to hand sanding using Dynabrade pneumatic palm sanders with 3M and Norton abrasives, the company also operates three Heesemann widebelt sanders from IMA-European Woodworking Machinery. The PBV2 sander is used for sanding panels, the LSM4 sands faces and tops prior to finishing, and an FGA6 single head sanders is used for sealer sanding.
Panels then are conveyed via roller to the finishing area, where a variety of Akzo Nobel wiping stains are hand applied with rags. After drying, the panels are sprayed with Akzo topcoats shot through DeVilbiss HVLP spray guns.
The company is concerned about the environment because federal and local regulations are strict in the area around Atlanta.
"The New South industrial revolution has caused the economy to be healthy, but federal, state and local governments want to be sure that a healthy economy doesn't come at the expense of the environment like it has in the past," said Milligan.
Examples of environmental conformity include processing of wood waste and a more long-term vision of product life. Wood waste is ground up, sold to the local utility company and mixed with coal to be burned at the local power plant for electricity. Because all Geiger products carry a 10-year warranty, the environmental goal is that through quality construction, products will stay in the office rather than clog up landfills after only a few years of use.
The quality question
In the last five years, one phrase which has gained popularity in the contract furniture industry is "ISO 9000" quality standard compliance. ISO 9000 is built on the philosophy that identifying a quality goal and documenting every operation to function within those parameters is the key to offering consistent quality. Although many of the top contract furniture manufacturers in this country have adopted the ISO 9000 quality standard, Geiger is a company which hasn't.
According to Milligan, the company has its own definition of quality and views compliance with ISO 9000 as unnecessary.
"What is quality control?" said Milligan. "It's conformance to the standard set. In our plants, if a product doesn't conform, it won't go on for further production. Every person on the production line is in charge of checking products from a previous station for defects. It really doesn't make sense to have a quality control inspector at the end of the production line discovering defects when you have half a million dollars in defective product already going through production. The strict quality controls we've adopted into our company's culture are probably more stringent than those set by ISO 9000. We've never had to assure a customer about quality. Our focus is toward our customer's requirements as opposed to those of ISO 9000."
An interesting and innovative example of identifying defective products, correcting the problem and getting that product to "catch up" with the rest of that specific order is through the use of a simple helium-filled balloon. Once a defect is noticed, a helium-filled balloon is attached to the piece with the order number written on the balloon. These balloon-tagged products receive priority in whatever area they need to be reworked, the defect is corrected and then the product is sent on to catch up with its specific order.
"Some companies may use a sticker, but that might be difficult to spot and possibly ignored," said Andy Geiger, manufacturing manager. "A floating balloon is a pretty tough signal to miss."
A future over the horizon
In addition to expanding its production capacity by working with Herman Miller, the company has a history of aggressively pursuing foreign markets. For example, the company was one of the first contract furniture manufacturers to open a showroom in Moscow in 1994.
Milligan estimates that 6 percent of Geiger's total sales are represented through export sales, with the United Kingdom, Western Europe, the Middle East and Canada identified as the primary markets. Milligan added that the NAFTA agreement has not had any effect on the company's business with Canada.
Geiger Brickel would like to further expand its foreign markets, and the sales alliance with Herman Miller has helped the company expand its export market.
"Our agreement with Herman Miller has helped us expand overseas sales by opening channels to do business in South America, a market which we previously had been unable to serve," said Milligan.
Niche is necessary
In addition to expanding the foreign market, Milligan said that for a smaller company, the key to success in the contract furniture market is to correctly identify niche markets and offer products at the correct price points to serve them.
"Larger contract furniture manufacturers have to respond to the market because market share is so important to them," said Milligan. "If they want to abandon a market to find a lower price market, we have the ability to fill the gaps they leave behind. We've always been a niche marketer and our niche is expanding. I think one major reason for our success now and in the future is that we've never been all things to all people and we plan to stay that way. Design tastes may change, but continuity of product is what customers want and we will always give that to them."
RELATED ARTICLE: BREAKING DOWN GEIGER'S PRODUCT UNE
Geiger's product line consists of a broad category of products aimed at different price points. Product lines are listed in accordance to their position from least expensive to most expensive.
1. Keyeira is a new collection designed by Geiger Brickel solely for Herman Miller. More lightly scaled and at a lower price point, the line offers a broad array of choices, and is targeted at the mid-management level.
2. Eco Group is an economical, but extensive line of case goods targeted at mid-management and for downsized budgets.
3. Sanford, introduced in 1992, was previously manufactured by Herman Miller, and provides a family of fine wood casegoods designed for upper management.
4. Petri Case Systems is a fine wood panel and casegoods system designed in 1980. The line became responsible for 80 percent of company sales in 1986.
5. Triuna is an award-winning collection designed by Manfred Petri and provides a high level of detail choices for executive needs.
6. Jugendstil is a very high-end furniture line targeted at office executives.
RELATED ARTICLE: GEIGER BRICKEL FORMS SALES ALLIANCE WITH HERMAN MILLER
Barely seven months after assuming production, shipping and service responsibility for Herman Miller's wood case goods products, Geiger Brickel announced in January that it has formed a strategic sales alliance with HMI. The announcement was made jointly by executives of Herman Miller and Geiger Brickel. Highlights of the alliance include:
* All Herman Miller and Geiger Brickel sales representatives, as well as Geiger Brickel dealerships, will remain in place.
* Full-time Herman Miller sales representatives will be in charge of both Miller and Geiger sales in selected territories formerly staffed by each manufacturer's representatives.
* Herman Miller dealers and sales reps will continue to have the exclusive right to sell the Sanford and Madiera collections, as well as the new Keyeira collection for the next two years.
* Both Herman Miller and Geiger sales representatives will be compensated for sales of the Sanford, Madiera and Keyeira lines.
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|Title Annotation:||includes related articles; Geiger Brickel|
|Publication:||Wood & Wood Products|
|Date:||Feb 1, 1996|
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