Steelcase Haworth Work Together

June 23, 2003
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KENTWOOD — This is a bit like a National Geographic film where lions and cape buffalo eye each other cautiously as they drink from the same African watering hole.

In this case, the natural adversaries are Steelcase Corp. and Haworth Inc.

From one of their firm’s satellite offices at Steelcase, Les Brand and Jim Ward praise officials of both firms for undertaking a joint project they believe can help the entire industry become more competitive.

Brand and Ward are the founding partners and owners of a Grand Rapids-based company named Supply Chain Solutions (SCS) that celebrates its second birthday in August.

Steelcase retained SCS when it was founded to help fit the arrival of raw materials to the firm’s lean manufacturing program here and at its plants throughout North America.

Out of that work has grown a six-week pilot project in which Steelcase and Haworth — which require many of the same materials from many of the same suppliers — are working together locally for mutual benefit.

Brand, a native of Chicago, and Ward — who retains much of his Tennessee accent — say the notion required more of Haworth and Steelcase managers than it did of SCS.

“I would really like to convince you that we’re rocket scientists here,” Ward said.

“But we got the idea when we were visiting a raw material supplier and saw a Haworth truck taking on a load beside a Steelcase truck as a Herman Miller truck pulled up.

“The real credit,” Ward added, “is that there were forward-thinking people at Steelcase that — as we joke about it — were crazy enough to go to senior management and say, ‘This makes sense.’

“And there were senior management level people that were forward-thinking enough to say, ‘Let’s put competition behind us. We’re still going to compete, but this also makes sense.’”

“Haworth did the same thing,” Brand added. “When we approached them, there were also some forward-thinking people at Haworth willing to step out of the norm.”

“So we are doing a pilot,” Ward said.

“And, as in all pilots, there’s going to be some bumps in the road. But we’re working through every issue. It has been teamwork so far between us and Steelcase and Haworth to make sure this is going efficient and smoothly.”

Both men say the challenge of maximizing efficiencies and wringing costs out of raw materials management is fairly novel in the office furniture industry.

Ward explained that the industry necessarily had focused its attention first on outbound deliveries. “That’s because they wanted to focus on customers themselves and to really take good care of them.”

On the other hand, he said, he and Brand, in their previous occupations with other logistics companies and now working together, “focus on how to drive efficiencies in the inbound flow of raw materials — one of the things that’s been overlooked in many organizations.”

What occasioned the local pilot project, Ward explained, is that the as-needed raw materials component of lean manufacturing brings with it an inherent problem with which logistics management must cope.

“So you’re trying to have less raw materials inventory — one or two days’ supply at a time, not a week’s or a month’s worth.

“But then one of the major challenges is that when you go to as-needed delivery, you drive up the frequency of shipments and lower the deliveries’ sizes, so that the cost of transportation goes up.

“So there are a number of ways you deal with this,” he added. “One is that you work with combining suppliers.”

And it was when talking with a supplier that Ward and Brand saw the trucks from several competing office furniture companies.

“A little light went on,” Ward said, laughing.

Having two furniture giants work together in West Michigan, the two men said, is only part of what’s involved in managing the inbound flow of raw materials.

Ward explained that consignment shipping is involved, meaning SCS interposes itself into the process and undertakes direct inventory management.

“The suppliers bring the materials to us to manage for them, so what we’ve got is inventory in motion,” Ward said.

“Our goal is to get the inventory out of the supplier’s house and keep inventory out of the manufacturer’s house. So we keep a pile in our house from which we can give the manufacturer daily buckets of raw material — the minimum amount that they need.”

In other instances, he explained, SCS brings in packaged material, and then unpackages it — or in some cases may mix it — so that when it’s delivered to the manufacturer, it’s put on ready racks so that the manufacturer’s people can use it with a minimum of handling.

As far as Steelcase is concerned, Brand and Ward think the firm has achieved enough in its raw materials logistics to not have to go as deep in layoffs as would otherwise have been the case during the recession.

“We think the work they’ve been doing with raw materials is going to leave them well-positioned for the upturn,” Brand said.

Ward, previously employed by Ryder, had done some work with Steelcase prior to teaming up with Brand, a former competitor.

“We took a look at vertical office furniture because we thought it was an area we could provide some help in.”

Though SCS is headquartered here, it has worked with firms with international logistics problems from Central America to Ireland.

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