A Profile of the Furniture

Manufacturing Industry
A Profile of the Furniture
Manufacturing Industry

Second Edition

Susan M. Walcott, PhD

A Profile of the Furniture Manufacturing Industry, Second Edition
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 Abstract
The furniture industry (NAICS 337) plays an important role in the U.S.
economy as a bellwether for manufacturing through its utilization of a
global production network. Types of furniture range from household
to institutional, with particular growth in firms supplying medical and
government-related commodities. The industry is highly responsive to
fashion trends but is partitioned into high-, medium-, and low-cost seg-
ments that reveal different locational and market responses to changes.
Recent developments indicate that the post-1980s migration of furniture
manufacturing to offshore, low labor cost countries has continued but
shows some faint signs of stabilizing in the United States for high end
customized and technologically intensive products utilizing the remain-
ing embedded skilled labor and locally clustered industry components.
Businesses that survived the recessionary “creative destruction” largely
adopted lean manufacturing processes and took advantage of available
lower-cost equipment and buildings to upgrade their production prac-
tices, absorbing market from former competitors. New partnerships
occurred with branch and headquarter relocations in Asia, along with
cooperative supplier relationships with former U.S. and new foreign com-
panies. Industry survivors adopted practices that could be highly instruc-
tive for other manufacturers challenged by globalization to grow stronger
by increasing their adaptive capacity. An overview of the industry and its
global production network considers new trends such as “green” products
and processes, shifts due to demographic changes responding to life stage
and real estate differentiation, and shifts in global production sites. Case
studies of major U.S. manufacturers utilize site visits and interviews with
representatives from these firms. Assessment of global competitors illus-
trates opportunities and challenges in these locations; lean manufacturing
practices utilized by U.S. survivors show diversity and key components.
Regulations impacting the industry include environmental protection re-
strictions and trade infringement. The conclusion considers the future of
the industry in regional clusters.
vi ABSTRACT

Keywords
furniture; global trade; competitive strategies; lean manufacturing; spatial
fix; global production network; value and supply chain; upholstered fur-
niture; wood furniture; case goods; textiles; creative destruction; adaptive
capacity; reshoring; hemispherization
 Contents
Chapter 1 Introduction......................................................................1
Chapter 2 Structure of the Furniture Industry..................................17
Chapter 3 How the Industry Operates..............................................31
Chapter 4 Industry Organization and Competition..........................45
Chapter 5 Market Forces Inside and Outside the Industry................67
Chapter 6 Regulation of the Furniture Industry, Domestic
and Global.......................................................................75
Chapter 7 Challenges and Opportunities for the
Furniture Industry...........................................................81

Notes....................................................................................................85
References..............................................................................................87
About the Author...................................................................................91
Index....................................................................................................93
 CHAPTER 1

Introduction

The furniture industry in the United States draws on abundant North

American forest resources and skilled workers for its basic supplies, flour-
ishing since the landing of the Mayflower as commemorated by a com-
pany in Maine that traces its name from the first pilgrim to purportedly
touch the New World land. This book discusses the evolution of furniture
from a local to a regional and now globally sourced, supplied, and mar-
keted industry, with an extensive network that continues to shift among
clustered locations.1 Changes include how as well as where furniture is
made, shipped, and sold. Subsequent chapters include a history of this
important industry supplying basic as well as luxury commodities and its
shifting geography involved in creating and catering to the rise of both a
manufacturing and a craft-based middle class.
The second chapter considers the supply chain that pulls components
of manufacture and retail together. Chapter 3 examines how the industry
operates covers the role of furniture shows and other demand drivers, the
impact of new technology reshaping where and how the industry func-
tions, and a typical factory tour. The fourth chapter presents illustrative
case studies of major firms operating in the United States, ranging from
higher-cost and more hand-crafted “Made Here” firms to highly manu-
factured foreign direct invested companies, including wood, upholstery,
and textile corporations. Countries and strategies of major competitors
also catering to the U.S. market are analyzed, along with policies to man-
age their market impact. The next two chapters consider issues involved
in the global extension of this industry, concluding with a summary of
the challenges—and opportunities—presented in a time of transition.
The remainder of this introductory chapter presents themes such as lean
manufacturing, re-shoring, and in-sourcing, which permeate and illus-
trate points throughout the entire book.
2 A PROFILE OF THE FURNITURE MANUFACTURING INDUSTRY

A particular focus of this book falls on the furniture industry’s latest

relocations—back to the United States in some cases, and to a broad-
ening range of overseas countries in others—as an overall reflection of
the changing geography of manufacturing. An expanding vocabulary
regarding international business includes references to moves from “out-
sourcing” abroad to “re-shoring” (moving business back to the United
States) and “in-sourcing” (utilizing U.S. firms for supplies). “Glocaliza-
tion” refers to a globally located company seeking to appear as if it were
a local/domestic firm, for example, by emphasizing its services at the re-
tail location. Originally a Japanese business concept for taking initially
local products to a wider market, the business model is modified to fit
local preferences and practices. A related popular jingo exhorts individu-
als to “think local, act global.” Corporations selling products in varied
countries and to various ethnicities need to “glocalize” by adapting their
portrayal to segmented markets. “Hemispherization”, or “near-shoring”,
refers to the practice of moving a business from more distant overseas
locations, particularly within Asia, to somewhere in the western hemi-
sphere. This is usually done to reduce time and other uncertainties in
shipments. These shifts are detailed later in this chapter. Interest lies with
the industry’s mirroring of the U.S. economy and the improvement in its
domestic manufacturing picture since bottoming in 2009. An improving
domestic market particularly since the year 2011 is shown by positive
revenue reports, the number of businesses, employment, exports as well
as imports, wages, domestic demand, and a jump in 2012 housing starts,
as shown in Figures 1.1 to 1.3.2
A steady decline in the number of firms since the late 1980s, de-
tailed in Chapter 3, dropped off more steeply along with the economy
by 2009. The number of private furniture-manufacturing firms dropped
from 25,142 in the first quarter of 2002, for example, to a recession re-
covery figure of 18,251 by the third quarter of 2012, still a noticeable
decrease. The number for 2013 remained steady, but by mid-2019 only
9,881 furniture businesses were reported. Looking at only the number of
businesses is somewhat deceptive as a measure of economic well-being,
however, since mergers and acquisitions, detailed in Chapter 4 on in-
dividual firms, reveal the consolidation of the industry into larger
­corporations—­sometimes under very different owners.
 Introduction 3

30000

25000

20000

15000

10000

5000

0
01 02 03 04 05 06 07 08 09 10 11
Year

Figure 1.1  Number of U.S. furniture-manufacturing businesses in

2001–2011

In the 5 years from 2014 to 2019 employment in the furniture in-

dustry grew 0.6 percent, along with increased revenue. In the same time
period, the market size of $27 billion in 2019 reflected a 1.4 percent
growth, demonstrating a 1.2 percent faster rise than typical in the overall
manufacturing industry. The furniture industry ranked 19th in manufac-
turing employment by mid-2019.3 Initial recovery credit goes in part to
improvements in production processes such as lean manufacturing as well
as an overall national economic recovery affecting home purchases that
fueled furniture sales as well.

Lean Manufacturing
The change agent winds of Schumpeter’s “gales of creative destruction”
blew particularly hard in regions reliant on traditional industries, whether
in the automotive firms of the Midwest or in the U.S. furniture industry.
These production clusters share a significant position involving older man-
ufacturing regions and historically strong industries. The phenomenon of
a slow rate of adoption and diffusion of new forms of work and produc-
tion organization is similar in such areas, but it can also be influenced
by the introduction of ideas from, rather than the physical competitive
4 A PROFILE OF THE FURNITURE MANUFACTURING INDUSTRY

presence of, foreign manufacturers. The reinvigoration of auto manufac-

turing in the Midwest occurred in firms that integrated and sustained
these new adaptations, illustrated by the collapse of manufacturers who
did not do so. The devastation of furniture manufacturing over the past
two decades is a well-documented occurrence, with the relocation to Asia
of many activities linked to this process commonly attributed to labor
cost savings, despite the lack of unionization throughout the generally
low-wage South, where furniture manufacturing is concentrated. Far less
well known is the Schumpeterian creative response to such economic de-
struction, discussed below.
The major process model distinguishing surviving from unsuccessful
furniture companies is clearly lean manufacturing. Major components
discussed below include, in no particular order:

• cooperative, consultative relationship between employees and man-

agers, customers and manufacturer, and company and suppliers;
• customization through small batch sets and customer-supplied
material;
• quality over quantity;
• fast delivery of furniture to customer, and just-in-time delivery of
components to factory;
• cell production model, with workers operating within a painted
surface and supplies flowing by delivery of supplies via “water spi-
der” employees pushing carts;
• strict inventory management, with open storage designed so that
inventory remains clearly visible and thus easily adjusted;
• white boards used to openly chart performance of teams, display
problems, and group suggestions for improvements;
• wage rather than piece-based pay, necessitating cross training;
• pull rather than push tasks, so work flows smoother with less pile
up; and
• implementation of suggestions decided by mixed teams of workers
and managers.

The search for process innovations came from a sales-connected profit

decline motivating imitation of a demonstrably successful technique,
 Introduction 5

in the case of furniture leading to “lean manufacturing,” exemplified ini-

tially by the Toyota Production System (TPS) in the automobile industry.
Adopters are heterogeneous (manufacturers, suppliers, transporters), and
subsequent adaptation (hybridization) is a matter of selection by indi-
vidual firms, reflecting the local firm’s cultural environment. Implementa-
tion’s ability relies on the agility of the company (its absorptive capacity)
and the commitment of its manager(s). The process improvement system
of lean manufacturing (LM) seeks to focus the expenditure of resources
on the creation of value for the end customer. Any other time/effort in-
vestment is to be eliminated, hence the term “lean.” The historical roots
of TPS come from the “Training within Industry” program developed by
the U.S. military and Britain’s Spitfire production during World War II,
before it traveled to Japan and bounced halfway back to the United States.
TPS was first applied in the United States at the United Motors Manufac-
turing plant, a joint venture between Toyota and General Motors.
The Toyota system’s uniqueness is its primary focus on developing
human resources as the foundation of its technical system—a key factor
occasionally overlooked by adopters since changing the corporate culture
is harder than instituting new procedures. Thorough implementation
usually takes several years at best. Toyota’s technical system is often pic-
tured as a house with stability and standardization as the foundation, with
specific strategies such as just-in-time (JIT, meaning delivery of assembly
components as they are needed) serving as pillars to support the roof and
ultimate target of customer satisfaction. Each of these major pieces of the
technical system uses the problem-solving skills of the employees to iden-
tify and eliminate nonvalue activity, or wastes. The classic “Seven Wastes”
are motion, waiting, conveyance, correction, overprocessing, overproduc-
tion, and inventory. An eighth waste is often identified as not utilizing
human talent.
The stated underlying purpose of the Toyota system is to improve
humanity through a product. The main values needed by companies and
managers to achieve this are respect for people and continuous improve-
ment. These values are used in the TPS system to yield a higher-quality
product with optimum reduction of time, cost, and effort. In the TPS
model, management practices are to support the role of labor on the shop
floor. Workers are incentivized by recognition and implementation of
6 A PROFILE OF THE FURNITURE MANUFACTURING INDUSTRY

their suggestions for input into the design, development, and improve-
ment of product and process technology. Kaizen is the Japanese word
frequently used to describe the constant search for improvement. Other
TPS practices include value stream mapping from suppliers through the
production system to promote a continuous flow, reduce the need for
inventory, and place a premium on the maintenance of standardized work
to achieve quality-level targets. Common components of lean systems in-
clude job rotation to foster interest and ability while ensuring that work is
accomplished with minimal/nonexistent delays, multiskilling (also called
crosstraining) of workers to increase their flexible implementation, small
group problem solving to draw on various skills for insights, decentral-
ized decision making, and increased overall employee participation. Most
research on TPS implementation concerns auto and electronics sector
firms, with a sliding scale of successful adoption between segments of
these two industries.
A TPS/LMS priority focuses on optimizing the interrelated flow of
production, ideas, and communication. One form of this is kanban, a vi-
sual communication method used to trigger replenishment of parts inter-
nally and from suppliers. A system of colored cards or labels is often used
to indicate the schedule of the logistical chain flow that is being managed.
“Pull,” or building to order (custom), rather than target-matching “push,”
techniques are also part of the TPS concept. Creating and maintaining a
long-term relationship with suppliers, who are also integrated into this
process either internally or to implement JIT, is a related aspect of LM, a
goal-oriented system that lends itself to a variety of tools adapted as means
to an end. Toyota’s Lean Mentor (sensei, or teacher) system serves as a way
of supplying experts to provide advice, where and when requested, on
implementing TPS and related processes. Direct American roots of TPS
can be found in the production system-related admonitions of Benjamin
Franklin, Frank Gilbreth, Frederick Taylor, and Henry Ford.
“Lean” as a form of economic organization takes place within vary-
ing social contexts, within which individual managers need to operate as
supporters of the floor workers. Various strands of literature emphasize
different aspects of “lean,” from cost control to speed enhancement and
the creation of a participatory production culture focused on teamwork
to enhance quality; leanness therefore ranges from a set of techniques
 Introduction 7

to socio-technical arrangements. Three stages of adoption include transi-

tional slimming of the organization, achievement of leanness as a conclu-
sion including suppliers as well as producers, and leanness as an ongoing
management process to sustain the organization. Promoting and achiev-
ing leanness involves a complex process of persuading workers, managers,
and occasionally owners to adopt this thorough-going system. The key
factor in the success of TPS models lies with giving workers respect and
responsibilities (genba, or people as the core) not through top–down au-
thority imposition. This pluralistic relationship can be fatally damaged by
the usual American response of cost minimization to combat competitive
pressure. The lean method is seen as globally transferable since it can be
modified to fit particular contexts at the firm level. Locally sensitive man-
agers need to pay explicit attention to hybridization as a learning process.
As stated by Porto and Smith (2003),

[o]rganizations most successful at transformation ... designed tools

that fit their specific needs …. Lean tools may be the visible por-
tion of a lean transformation but they are dependent on the more
invisible foundation of a culture that supports new ways of thinking
… a foundation of a people-based culture: respect, responsibility for
problem solving, and total involvement with improvement.4

To summarize, LM/TPS key goals are to:

• Shorten production time;

• Increase employee problem solving;
• Increase employee self-directed teamwork;
• Improve product/service quality;
• Improve work process standardization;
• Reduce work-in-process errors and rework;
• Improve workflow;
• Push-pull cards identify production problems; and
• Incorporate user feedback in innovation process.

Steps toward application of LM in the furniture industry usually

begin with a consultant who works with a chosen production unit or
8 A PROFILE OF THE FURNITURE MANUFACTURING INDUSTRY

targeted process to study, transform, and exemplify the system improve-

ment. Steps (literally in the case of a worker) are placed on a chart using
colored lines to indicate flows involved. The distance and number are
used to pinpoint places where time and effort waste occurs and can be
eliminated. A workspace, for example, can then be compressed so all the
supplies that a worker needs are readily at hand and a yellow line drawn
around to delimit the work area. A group of workers (sometimes referred
to as “water spiders” since they hop from station to station) is deployed
with carts carrying items needed by production employees so work does
not stop or experience delays due to a supply shortage. Pegboards holding
tools and supplies are often used as an organized, close by visual storage
space. Another characteristic sign of LM implementation is a large white
board, used at the daily morning and afternoon meetings to list teams and
their accomplishments/needs. Employees are encouraged to assist with
offering suggestions for improvements. As a highly visible display surface,
white boards are also used to post inventory data (e.g., how much expen-
sive leather of different colors is utilized in production over a certain time
period). Workers are encouraged to write improvement suggestions at any
time, and authors of adopted practices are photographed along with their
innovation and the picture posted in a visible spot. Companies are en-
couraged to supply lockers for workers to store their belongings (so only
work material is at their station) and an eating area so food consumption
occurs in a designated place, as organized as all other specialized activities.
Yellow floor lines are tightly drawn around storage bins. They function as
fast visual references if excessive inventory spills over the carefully mea-
sured storage compartment.
Figure 1.2 demonstrates the accompanying gradual increase in em-
ployment over the recession recovery/lean, adoption time period, with
long-term national and global competitive consequences detailed in
Chapter 3. Although it is not clear in the chart, there was a slight but not
insignificant uptick in employment from 2012 to 2013 of 350,000 to
351,000 according to projections by the Bureau of Labor Statistics. The
more significant and unfolding story associated with re-shoring moves
is the underlying economics that make such a move attractive. Calcula-
tions reflect not only the diminished wage differential between China
and the United States but also the investment in upscale technology and
 Introduction 9

800

700

600

500

400

300

200

100

0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Year
Figure 1.2  Employment in the furniture industry, 1990–2013

machinery reflected in increased productivity with fewer workers needed

to produce more goods at lower cost overall.

Re-shoring and In-sourcing

The hemorrhaging of businesses hopping overseas has slowed, with some
shifting in overseas sourcing countries and some increasing activity do-
mestically. Causes and consequences for the U.S. industry are explored in
the following chapters. A sign of the improvement in housing starts and
disposable income is reflected in the rise of both exports of furniture from
and imports of furniture to the United States (Figure 1.3). Note the dif-
ference in values in the Y-axis, however, as imports remain a factor higher
than the value of exports. Less visible in the numbers but importantly
underlying them is the difference in quality represented by the higher
price exports, the more mass manufactured so less expensive imports,
and the custom niche production for the domestic U.S. market that also
improved at an accelerated pace since 2011. The export trend indicates
effects of a weaker U.S. currency and diminished global demand from
major developed world customers, discussed in Chapter 3.
10 A PROFILE OF THE FURNITURE MANUFACTURING INDUSTRY

35000

30000

25000

20000

15000

10000

5000

0
2002 2007 2009 2015 2016 2017
Year
Figure 1.3  Furniture import value to the United States in million
$US from 2002 to 2017

Figure 1.4 illustrates a slight twist in the tale of companies shift-

ing locations around the globe in search of ever lower cost (usually
wage-related) advantage in a less-skilled industry: the increasing value of
furniture-related business done in the United States. Several recent stud-
ies indicate the increase in manufacturing and service-related business

7,00,00,00,000

6,00,00,00,000

5,00,00,00,000

4,00,00,00,000

3,00,00,00,000

2,00,00,00,000

1,00,00,00,000

0
2000 2013 2014 2015 2016 2017 2018
Year
Figure 1.4  Furniture export value from the United States, 2000 to 2018
 Introduction 11

such as furniture design and sales re-shoring and rehiring in the same
areas where it was strong a decade ago in Mississippi and North Carolina,
according to the Boston Consulting Group. The value and amount of fur-
niture imports to the United States also increased, and even more sharply,
over time as well. Chapter 2 breaks these trends down by furniture seg-
ments, while Chapter 4 provides details by countries.
Main points to remember regarding re-shoring movement include the
following triggers for firms considering switching business out of China:

• Increases in the cost of oil push increases in the cost of shipping

across the Pacific.
• Since the downturn in 2008, shipping firms have been taking
boats out of business (putting them in “mothballs”) to avoid ex-
pensive trips with less than full loads, particularly relatively empty
backhauls from the United States to Asia since far fewer goods flow
in that direction but ships must complete the round trip to pick up
Asian manufactures. Shipping firms subsequently raise rates, shift
schedules, and remain tough to forecast as they opt for flexibility
on their part—and uncertainty on the part of customers.
• The gradual and continuing rise in the value of the Chinese yuan
currency in relation to the U.S. dollar makes exports more expen-
sive from China relative to other locations.
• The previous surge in population from rural inland areas migrating
to major Chinese east coast factory locations largely in the Pearl
River delta region has led to:
? tapering off of migration since those who could leave already

left, and disadvantages of migration now more apparent;

? more companies in clustered locations competing for same

worker pool, which tends to drive up cost of workers and make

them more willing to switch jobs;
? workers becoming more affluent, demanding higher pay, fewer

hours, and more benefits.

• Intellectual property infringements such as copying U.S. furni-
ture designs hurt competitiveness in an industry where design is
very important. Some Chinese factories prohibit visitors to pro-
tect themselves from this risk, while others appear to utilize design
12 A PROFILE OF THE FURNITURE MANUFACTURING INDUSTRY

elements as original equipment manufacturer (OEM) suppliers

from their contracted customers.
• Regulations in foreign countries remain opaque, while enforce-
ment remains disadvantageous for foreigners, according to anec-
dotal evidence.

Main considerations attracting business activity back to the United

States include:

• Still an adequate number of appropriately skilled workers in loca-

tions where furniture was manufactured previously, especially in
upholstery.
• U.S. recession increased number of unemployed workers willing to
work for relatively modest wages.
• United States and some states offering incentives for employers.
• Market for furniture larger than in China and growing stronger as
recession is ending.
• Equipment available at good price.
• Manufacturing process improved with move to lean procedures
and highly efficient machinery, lowering costs with fewer workers
needed.
• Closer to market means:
? quicker delivery competitive advantages, and

? ability to maintain control over quality during construction.

Main considerations for business looking at relocating to non-China

and non-U.S. locations:

• environmental regulations in the United States still strong and im-

pact furniture processes.
• wages still higher than in many other countries (South America,
Southeast Asia, particularly in Vietnam).
• U.S.-China trade conflict tariff increases.

Examples of re-shoring efforts include both successful (so far) and

less successful efforts. North Carolina’s Lincolnton Furniture Company,
in the town of the same name, eventually abandoned its attempted
 Introduction 13

re-starting. The owner who opened the business in 2012 had sold it in
1997 to another U.S. manufacturer, who gradually shifted an increasing
amount of work overseas until closing the plant. In the interim, furniture
industry wage rates in China rose throughout the decade from a little over
50 cents/hour to approach $3/hour, and U.S. consumers were reconsid-
ering the trade-off in time to delivery and quality. Productivity efficien-
cies achieved by utilizing highly efficient machinery also made “Made
in the U.S.” more potentially profitable than in the labor-intensive past.
When Lincolnton eventually closed, it signaled the finality by selling off
its equipment.
Stanley’s youth furniture division in Robbinsville continues its ­efforts
to increase manufacture of relatively high-end children’s furniture in the
United States. Given previous issues with foreign laxity in safety and
chemical compounds, Stanley hopes to link the “Made in the USA” label
to parental willingness to pay more for peace of mind. Stanley shuttered
but maintained its plant intact during its hiatus, thus it was easier to re-
suscitate—or sell if that is the ultimate decision. Vaughn Bassett success-
fully pursued the same strategy. Though still rare to see a new company
opening in the United States—or a former company unshuttering—more
common sights are existing companies hiring more workers to meet the
demand uptick, or a merged company seeing more activity as the new
management increases its U.S. business. This is particularly the case on
the upholstery side, which continues to thrive in the United States by
utilizing skilled craftsmen for custom work. An example of reverse shor-
ing is Chinese company Samson’s purchase of U.S. company Craftmaster,
whose upholstery business it subsequently returned to the United States.
From early 2010 to early 2012, a Boston Consulting Group study
showed that wage rates in China climbed by 15 percent, while shipping
costs rose precipitously commensurate with the price of fuel and the re-
duced shipping capacity due to mothballing from demand fall-off during
the recession. These factors put furniture, along with six other sectors,
including electronics and transportation goods, most likely manufactur-
ers to return to the United States. Almost half (48 percent) of the larg-
est U.S. manufacturers (sales in excess of $1 billion) indicated that they
planned to re-shore. Indications are that this is happening very gradually
in the case of furniture, and more in some components (upholstery) than
14 A PROFILE OF THE FURNITURE MANUFACTURING INDUSTRY

in others (case goods). The tipping point for business owners is a 10 to

15 percent differential that makes it worthwhile to begin shifting at least
some of their business—whether manufacturing, which requires more
sunk costs, or more mobile design, logistics, or marketing functions—
back to the higher-skill, higher-pay control headquarters in the United
States according to a 2012 Harvard Business School study. Hemispheriza-
tion to a closer low-cost country such as Mexico is attractive by a wage
rate comparison, but violence, corruption, and low-quality infrastructure
impact considerations of manufacturing relocation for fragile furniture,
other than low-skill, low-pay, and less-perishable upholstery processes.
Due in part to its position on the low-cost end, Mississippi joined North
Carolina in losing large numbers of furniture-manufacturing jobs in the past
7 years alone. Mississippi State University hosted a Re-shoring Initiative to
promote the overall competitive price of manufacturing in the United States,
considering the costs outlined above and the changing wage rates. A study
purportedly showed that 25 percent of manufacturers who left the state are
considering returning (2012). Another study done by the Hackett Group
found that up to 20 percent of offshore manufacturing is liable to re-shore
by 2014–2015 for the same shifting cost calculations. A noted columnist for
the leading furniture industry publication indicated his knowledge of at least
five companies looking for a U.S. expansion site in early 2013.
A report by Inc. magazine indicated that since 2016 a reshoring ini-
tiative (encouraged by a nonprofit of the same name) began to abate the
flood of U.S. jobs and businesses going overseas, including furniture busi-
ness. Factors go beyond decreasing cost differences between domestic and
foreign manufacturing (largely linked to wage costs) to include a broader
accounting of expenses involved with tariffs, travel, shipping, time, re-
duced quality due to use of unapproved subcontractors, and intellectual
property violations.5 Also in 2016, a Reuters’ news analysis of the state of
furniture manufacturing in heartland Hickory, North Carolina, charted
the flow of jobs returning from the previous decade’s tsunami to China.
Since 2010, the metro area added 28,000 manufacturing jobs, with
furniture manufacturers contributing 30,000 jobs in that time period.
Workforce challenges included retiring older workers, younger workers
migrating to larger cities, and classes opened to train workers in higher
skill custom manufacturing to entice remaining workers.6
 Introduction 15

In 2017 the U.S. furniture manufacturing giant La-Z-Boy indicated

it was heavily investing in facilities and adding manufacturing jobs re-
shoring business to Dayton, Tennessee. Major considerations included
government incentives and proximity to customers. However, in 2018
global supply chain activity subsided in the face of uncertainties owing to
U.S.–China trade relations flux. Reshoring subsequently slowed as manu-
facturers wait to make location decisions such as whether to pick a new
place outside China—the current target of trade disputes—or shorten the
supply chain back to the United States. Most likely activities to remain
overseas are low-skilled positions, rather than tariff-sensitive goods man-
ufacture. Cost considerations of relocating or expanding in the United
States are also seen as contributing to “offshoring inertia” reinforcing re-
luctance to act.7
A question remains whether the practice of foreign—particularly
­Chinese—firms purchasing U.S. furniture makers and suppliers will lead
to the opening, re-opening, or maintaining a plant—or just brand name
acquisition as has happened previously. The giant Hong Kong trading
company of Li and Fong, for example, are reputedly interested in adding
a furniture brand to their portfolio of diverse companies, but not in order
to manage one in the United States as much as take advantage of current
low interest rates and low selling price for such firms. While the Chinese
government encourages its companies to go abroad in the form of out-
ward foreign investment, it is a policy combining the opportunity to learn
foreign operating techniques with ways to balance the currency flow and
spread risk. This strategy is an acknowledgment of the major shifts under-
way in this dynamic reconfiguring manufacturers, currently adjusting to
new ways of production and marketing on a global scale.
 Index
Architectural woodwork and
cabinetry, 19
Ashley, 46–47
Boston Consulting Group, 11, 13
Brazil, 62
CAD/CAM. See Computer aided
design and computer aided
manufacturing
Case studies, 46
China, 59–60
China International Furniture, 37
Clean Air Act, 77
CNC. See Computer Numerical
Control
Comfort design, 51
Competitive strategies
branding, 63–64
niche products and
customization, 63
online, 64
offshore manufacturing, 64
Composite Wood Products
Act, 77
Computer aided design and computer
aided manufacturing (CAD/
CAM), 41
Computer Numerical Control
(CNC), 41
Demand drivers, 38–39
Department of Commerce
(DOC), 75
Designers, 23
Distribution, 24–28
DOC. See Department of Commerce
Dyeing and finishing, 20
EDGE. See Employees Dedicated to
Growth and Excellence
Employees Dedicated to Growth and
Excellence (EDGE), 48
Employment in the furniture
industry, 1990–2013, 9
Environmental Protection Agency
(EPA), 76
Environmental regulations, 76–78
EPA. See Environmental Protection
Agency
FBN. See Furniture Brands
International
Furniture and home furnishings store
employment, 29
Furniture Brands International
(FBN), 47–50
Furniture City, 32
Furniture export growth from the
U.S. to top recipients,
2016–2017, 58
Furniture imports by country, source
of, 2002–2017, 58
Furniture industry components
annual survey of manufacturers,
2010–2011, 18
household furniture segments,
export value, 18
household furniture segments,
import value, 19
NAICS 337110 architectural
woodwork and cabinetry, 19
NAICS code 337, 17
NAICS 337125 household
furniture except wood and
metal manufacturing, 20–21
NAICS 337127 institutional
furniture manufacturing, 21
NAICS 337124 metal household
furniture manufacturing, 20
NAICS 337122 nonupholstered
wood household furniture
manufacturing, 20
NAICS 337121 upholstered
household furniture
manufacturing, 20
94 INDEX
Furniture manufacturing industry
challenges, 81–82
employment, 9
export value, 10
history, 31–35
import value, 10
lean manufacturing (LM), 3–9
operations, 31–44
opportunities, 82–83
regulation, domestic and global,
75–79
re-shoring and in-sourcing, 9–15
structure of, 17–30
Furniture retail outlets, 28–30
Furniture Wars, Dugan, 43
Gales of creative destruction, 3
Glass, 20
Glocalization, 2
Greenhouse Gas Reporting
Program, 77
HC. See Hickory Chair
HFIA. See Home Furnishings
Independents Association
Hickory Chair (HC), 47–50
High Point Market, 36–37
History, of U.S. Furniture Industry,
31–35
HNI, 50
Home Furnishings Independents
Association (HFIA), 65
Household furniture except wood and
metal manufacturing, 20–21
Indonesia, 61–62
Industry organization and
competition
Ashley, 46–47
Brazil, 62
case studies of, 46
China, 59–60
competitive strategies, 63–64
Furniture Brands International
(FBN), 47–50
HNI, 50
Indonesia, 61–62
Klaussner Home Furnishings,
50–52
major competitors, 55–59
Markor and Ethan Allen, 52
policy strategies, 64–65
Samson Group, 52–53
Steelcase, 53
Stickley, 53–54
Valdese Mills, 54–55
Vietnam, 56
Wayfair, 55
In-sourcing, 1–2, 9–15
Institutional furniture
manufacturing, 21
Intellectual property (IP)
component, 23
International Association of
Bedding and Furniture Law
Officials, 77
Klaussner Home Furnishings,
50–52
Labor issues, 78–79
Las Vegas market, 37
Lean manufacturing (LM), 3–9
Leather, 22
LM. See Lean manufacturing
Logistics, 24–28
Major competitors, 55–59
Major markets, role of, 35–38
Manufacture and retail, 24–30
Market forces inside and outside, the
industry
demographic, 73–74
economy, 71–72
fuel and shipping costs, 68
housing Shifts, 73–74
intellectual property (IP) issues,
68–69
lifestyle, 73–74
quality control considerations, 69
speed, 70–71
supply factors, 67
warehouse time and storage cost,
69–70
Markor and Ethan Allen, 52
Metal, 22
Metal household furniture
manufacturing, 20
 INDEX
95
NAFTA. See North American Free
Trade Agreement
NAHFA. See North American Home
Furnishings Association
NAICS. See North American Industry
Classification System
National Home Furnishings
Association (NHFA), 64–65
National Institute of Standards and
Technology (NIST), 76
NHFA. See National Home
Furnishings Association
NIST. See National Institute of
Standards and Technology
Nonupholstered wood household
furniture manufacturing, 20
North American Free Trade
Agreement (NAFTA), 75
North American Home Furnishings
Association (NAHFA), 65
North American Industry
Classification System
(NAICS), 17
Number of U.S. furniture-
manufacturing businesses,
2001–2011, 3
OEM. See Original equipment
manufacturer
Original equipment manufacturer
(OEM), 57
Plastic, 24
Policy strategies, 64–65
Regional markets, 37–38
Regulation, of furniture industry,
75–79
Re-shoring, 1–2, 9–15
Retail, 24–30
Samson Group, 52–53
Shenzhen International Furniture
Exhibition, 37
Significant New Alternatives Policy
(SNAP) Program, 77
SNAP Program. See Significant New
Alternatives Policy Program
Steelcase, 53
Stickley, 53–54
Structure, of furniture industry
furniture industry components,
17–21
manufacture and retail, 24–30
supply chain, 21–24
Supply chain
designers, 23
dyeing and finishing, 23
glass, 23
leather, 22
metal, 22
plastic, 21
textile fabrics, 22–23
wood, 21–22
wood working machinery
manufacturers, 23–24
Taiwan, 55, 57, 59
Technology
material, 40–41
staining and finishing, 41
upholstery, 40
wood cutting, 41
Textile fabrics, 22–23
Toyota Production System (TPS), 5,
49
TPS. See Toyota Production System
(TPS)
Trade agreements, 75–76
“Training within Industry” program, 5
Typical factory activities, 41–44
United States, furniture import value,
2002–2017, 10
Upholstered household furniture
manufacturing, 20
U.S. customs, 79
U.S. furniture firms, percentage of, 34
U.S. furniture import-export
destinations, 2008–2012, 56
U.S. furniture industry
future outlook for, 83–84
history of, 31–35
U.S. furniture manufacturers, regional
distribution of, 33
Valdese Mills, 54–55
Vietnam, 61
96 INDEX
Warehouse, 69–70
Wayfair, 55
Western Home Furnishings
Association (WHFA), 65
WHFA. See Western Home
Furnishings Association
Wood
Wood working machinery
manufacturers, 23–24
World Trade Organization
(WTO), 75
WTO. See World Trade Organization
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