Commentary: Surviving the Drive-thru Mentality of Consumption

Lead Author: Dr. Jeff Howe

Publish date: 10.01.2006

 

Simply impatient, or just an average customer?

 

So, a few days ago I went to buy a chair for my living room. Believe it or not, after more than thirty years of marriage and eighteen changes of address, I had yet to experience purchasing a traditional living room chair. Perhaps I have a fear of recliners and their status as a symbol of old age. Perhaps I just never needed a chair. Perhaps my instincts told me this wouldn't be a simple trip to the store. In any case, as a good patriot and supporter of the wood products industry in the U.S., I specifically went looking for a chair that both fit the broad variation in my family and friends' backsides and one that was made in America. Perhaps an unrealistic challenge, but a worthy objective nonetheless.

 

In previous articles we have written about the dramatic changes overtaking the furniture industry in North America. We have discussed both the abrupt and dramatic shifting of production away from its traditional home in the eastern U.S. (e.g. North Carolina) to parts of China and the Far East [1] . And we have discussed some of the things that might be done to keep those jobs at home [2] . It is clear from our research that the key strategies for differentiating furniture manufacturing here in the U.S. and retaining the related jobs are: increased customization, increased variety, shorter lead times, and increased service. Some firms have embraced these concepts and are realizing the benefits. Many others have not, with predictable consequences. Despite growing recognition that implementation of these types of strategies is what is needed, the most common statement heard over and over from furniture associations and manufacturers alike is along the lines of: “those *&#!! Chinese are killing us with their low cost labor.”

 

Now if I might go off on a tangent a bit, there is relevance here, at least indirectly, to the problems of the insurance industry of the 1960's and 1970's. At that time it was not uncommon for an auto claim to take six months or even longer to settle, and the average response time was probably over two months. Consistent customer complaints over this problem led one enterprising insurance company to hire an efficiency expert to analyze what was going on and how the process could be improved. In this famous research, the analyst found that the average claim, while taking months to resolve, was actually only being worked on for about twenty minutes. The rest of the time it sat on someone's desk for a variety of reasons. From this groundbreaking insight we now have come to the point where it is common today for the claims adjuster to come to your house, review your damaged car and hand you a check on the spot – within hours of the claim being made. This is important background information to my story.

 

So, back to my search for a chair: After much deliberation, my wife and I finally found one we really liked on the floor of a local furniture store, and, after being assured it was made in the U.S. we offered to buy it in one of the “stock” fabrics. The excited salesperson said that was great and that we should be able to get it in about eight to nine weeks. I didn't expect this response and I said “I thought this was made in the U.S., so it doesn't have to come on a boat from China does it?” My sarcasm being lost on the upbeat salesperson, she replied “oh no, but this does come from way down in North Carolina!” Since “way down” is such a relative term I ignored this response and fumed in shocked silence. Then we left without buying the chair.

 

Be assured that I understand that “a good chair lasts a lifetime” and is “worth the wait.” My wife's family is of old New England stock with furniture passed down generation to generation since the 1700's. I understand that concept better than most.

 

However, in my personal valuation system, two other issues take precedence over the fact that the chair might be worth the wait. The first is, I am embarrassed to say, I have totally bought into the drive-thru mentality. I love prompt service. I would purchase everything drive-thru if I could. Heck, I read once that eating standing up is good for digestion and have used that as my defense ever since. It's not that I don't value patience. I just value instant gratification more. Research would suggest that, in this trait I am not unlike a large segment of society.

 

The second issue that applies in this case relates to the fact that I have been in the wood products industry all my life. I actually know how long it takes to make a chair – especially if it is a “stock” chair in a “stock” fabric. I know that it may be as short as twenty minutes or as long as a few hours. Even if you started from scratch today and did everything by hand it wouldn't take longer than a week (maybe if you wove the cloth too!). And then shipping by truck is about 2-3 days at most. So what is going on the rest of the time? My guess is my chair order would spend about eight of the nine weeks sitting on someone's desk.

 

My wife was stunned by the strength of my reaction as we left the store. She commented, “I'm not surprised that you didn't want to wait; I know you too well for that. I am surprised that you care so much about a stupid chair to get this worked up about it!” I tried to explain that my frustration was only in part that I would have to wait, but more importantly that I feel powerless to influence an industry I care so much about. And that in today's day and age, and in a market that is so competitive, there are still good companies that haven't figured out that you can't compete with low cost and often high quality foreign goods by offering similar lead times. One of the clearest advantages domestic producers have is proximity. Our locations should translate into an ability to meet specific, particular needs, - - and quickly.

 

In the end we ordered a similar chair from another store. And yes, we still have to wait eight to nine weeks. Now some of you will conclude, “see, you couldn't get it any quicker anywhere else.” My reaction to such a response is: “true, but clearly there is an opportunity here and aren't wood products companies at least as innovative as insurance claim adjusters?”

 

So, here's the lesson. If you or someone you know owns, runs, or advises a wood products company trying to compete with foreign manufacturers, ask them to analyze how long it takes to physically process an order and manufacture that product. Ignore all the time waiting for something whether it is waiting for inventory or simply waiting on a conveyor of some kind for the piece of equipment to be ready. Only count actual time something is physically changing on the product or the paperwork. That is your manufacturing target. Double it and it is your theoretical lead time. There are very few things today that need to take more than a few hours to produce, including automobiles. With this information, you'll know your goal and the rest is in the details.

 

Like it or not, the U.S. is in a drive-thru economy and customers are reflecting that desire across all product lines. The good news is that technology is facilitating the ability for those desires to be met. Old manufacturing models of big inventory and long lead times are things of the past, even if some industries don't yet realize it. The good news is that it is still possible to exceed your customer's desires, and profitably. If one company had offered me a two week lead time (easily realistic) I would have been ecstatic, and so would the many people I met who shared similar stories. The bad news is that my purchasing experience in buying a domestic chair left core needs unmet.

 

However, despite sobering losses and significant challenges, it is still possible for U.S. furniture manufacturers to reverse recent trends. There are models of success that can be replicated. What is needed is a commitment to changing longstanding practices, coupled with development and implementation of bold new strategies. A new focus on reducing lead times and excellence in customer service are a good place to start.

 

Dr. Jeff Howe

October 2006

 

[1] Dovetail Report: November 2004. Trends in the Global Forest Sector and Implications for Forest Certification. http://www.dovetailinc.org/DovetailGlobalTrends.html

[2] Dovetail Report: April 2005. Global Competition: An Opportunity for Our Domestic Wood Products Industry. http://www.dovetailinc.org/DovetailGlobalCompetition.html