How American Leather Reinvented the Upholstery Business

Virginia Postrel Article (NY Times article Feb 2005)

Here is a great example of a company using lean to compete in the furniture industry, where most everything else is moving to China (or is already there). For anyone who has ever ordered furniture (custom or otherwise), you know how frustrating it is to wait eight weeks or four months for the item to arrive, when you know it must have taken all of a few hours to build.

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American Leather, in Dallas TX, has grown to a $59 million a year business by providing fast response (two weeks) through lean techniques and staying physically close to their customers.

From the article:

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No domestic manufacturer can beat the Chinese on price, but no Chinese furniture maker can deliver a sofa in four weeks. “The fact that you’re across the ocean is adding a month to your lead time almost by definition,” says Mr. Duncan. Nor do low-cost competitors offer as much choice. Like traditional U.S. operations, Chinese plants run large batches with sizable backlogs. That maximizes economies of scale but adds additional weeks to delivery time. Plus, Chinese manufacturers tend to limit each container load to no more than a couple of models in a couple of different colors, gaining efficiencies by giving up variety.

Seems like a great success story!

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an book titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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3 Comments

  1. Mark Graban
    Twitter:
    says

    I saw an ad for American Leather in a magazine recently… glad to see they are still going.

    The ad says “Custom luxury to your home in about 30 days. Expertly crafted in Dallas, Texas.”

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