Furniture Executive The WHAT’S BEHIND WORKFORCE SHORTAGE? | pg 2 PUBLISHED AS A MEMBER SERVICE BY THE AMERICAN HOME FURNISHINGS ALLIANCE Future Focus: What’s Ahead for Furniture Manufacturing? DECIPHERING THE FUTURE OF U.S. MANUFACTURING is no easy task. After examining trends in world economies, demographics, education and American attitudes toward skilled-labor careers, some prognosticators are calling for a manufacturing renaissance. Others examine the same trends and forecast severe labor shortages that will further erode the U.S. manufacturing base. AHFA executives attending the spring Manufacturing Summit at Mississippi State University will hear from one of the country’s top authorities on the subject: Dr. Harold Sirkin, a senior partner and management director at the Boston Consulting Group in Chicago, as well as a professor at Northwestern University’s Kellogg School of Management. In 2013, Sirkin co-authored a study, “The U.S. Skills Gap: Could It Threaten a Manufacturing Renaissance?” in which he concluded that companies would have to be intentional in their efforts to develop and train the machinists, welders, industrial machinery mechanics and industrial engineers they will need by 2020. Sirkin's Summit presentation will be part of a day-long examination of the future of manufacturing slated for Wednesday, March 18, at the Franklin Furniture Institute on the campus of Mississippi State University. AHFA is once again collaborating with the Franklin Furniture Institute for an exceptional program exploring the principal issues in manufacturing today. Also participating in the 2015 Summit are the University of Southern Mississippi’s Continued on page 3 FEBRUARY 2015, VOLUME 32. NO. 2 CLEARING CONFUSION OVER ‘COM’ LABELING AHFA has received clarifying guidance from the State of California on the proper labeling for custom furniture produced using the customer’s fabric – commonly known as a “COM” order. As long as the fabric specified by the customer is new, the resulting piece of special order upholstery should carry a white law label in the State of California. Some companies have been using a green law label for COM upholstery. This is because the California Code of Regulations states that a green label shall be used for “Owner’s Material.” However, California’s definition of “owner’s material” is not the same as the industry’s definition of “Customer’s Own Material,” or “COM.” AHFA staff members discovered this discrepancy in the use of terms for custom upholstery as they were seeking guidance from California officials on labeling requirements within the TB 117-2013 flammability standard. In October, AHFA asked the California Bureau of Electronic and Appliance Repair, Home Furnishings and Thermal Insulation (BEAR-HFTI) to review Continued on page 3 FRONT BURNER Priority issues and events in February OSHA WORKSHOPS AHFA will sponsor two OSHA compliance workshops this spring. Whether you have an employee who is new to OSHA compliance duties or have someone who just needs a refresher course, these workshops will offer a comprehensive overview in one day-long session. The first workshop is slated Wednesday, March 4, at the Crowne Plaza Hotel in Hickory, N.C. A second workshop will be Wednesday, May 13, at the Franklin Furniture Institute on the campus of Mississippi State University in Starkville, Miss. Programs at both locations will be the same and will be presented by an authorized OSHA trainer. Topics will include record keeping, lock out-tag out, machine guarding, HAZCOM revisions to address “global harmonization,” how to handle an OSHA inspection and more. Register for these events on the Events page at www.ahfa.us. February 2015 | page 1 www.ahfa .us CHAIRMAN’S MESSAGE Kevin Sauder, President/CEO, Sauder Woodworking Co. What’s Behind Our Industry’s Workforce Shortage? February 2015 | page 2 www.ahfa .us According to recent reports, those of us with U.S.-based factory jobs aren’t the only ones feeling the squeeze. The lack of interest in and negative perception of the manufacturing sector among younger prospective workers, in particular, impacts those of you who need designers, marketing experts and operations/ logistics personnel for your import operations, as well. One idea that seems to be catching on is an industry-sponsored Manufacturing Day, during which companies host tours for high school and/or community college students. In December, Sauder hosted student groups from several local high schools. When we spoke with guidance counselors, we discovered that there are many high school students who aren’t a natural fit for a four year college, yet they would like to get started in a good career with growth and learning opportunities. At Sauder, these young people could learn a skill, supplement that skill with technical education through our local community college and, in a short amount of time, be well on their way to a fulfilling career. Our Manufacturing Day tours emphasized career opportunities in machine operations, quality, IT, customer service, sales administration and other interesting areas. Students and counselors were surprised at the cleanliness of our facilities, the high-tech machinery and quality measuring devices, the computer-based job opportunities, the scale of our operations and the friendliness of our people. In the weeks to come, some of you will be contacted by researchers working on AHFA’s behalf to find out what types of job openings you have now, how you train your workers, what percentage of your work force will be retiring in the next 3 to 5 years and more. We hope you’ll welcome the contact and help supply the insights we need to address our industry’s workforce needs. We can all benefit from a workforce development program that draws talented young people to our industry. Photo courtesy of C.R. Laine SAUDER HAS GREAT EMPLOYEES, AND WE NEED A LOT MORE RIGHT now. Our business is up double digits in the last four months. We’re working heavy overtime, but we still can’t keep up with the demand. We hired 70 new employees at the end of 2014, and we began the year with nearly 50 open positions to be filled. Our employee shortages have forced us to modify our production schedule and tell our retail customers that they may be out of stock on some items for weeks at a time. Unemployment in our fourcounty area of Ohio averages around 4 to 5 percent. It’s just 5 percent statewide, so it is difficult for us to find good employees. Likewise, in North Carolina the unemployment rate was 5.3 percent at the end of the year. Elsewhere in furniture-producing regions, however, unemployment is higher. In November it was 7.2 percent in California; 6.8 percent in Tennessee; and 7.3 percent in Mississippi. All of these are strong upholstery-producing states. Looking forward, Sauder needs to hire another 100-plus employees in 2015 for our new IKEA lines. Sauder has career opportunities right now and into the future. So how can we, as an industry, find and retain good people? At Sauder, our human resources team has been working with the operations team to develop new ways to do recruiting, interviews and orientations. We’re working with our outside employment agencies and doing more advertising to get the word out. We also raised the starting pay for full-time and temporary employees to help attract and retain workers. Our business is unique – we’re a U.S.-based, large-scale manufacturer of ready-to-assemble furniture – but there are other segments of our industry experiencing similar labor shortages. In fact, the need is so acute in the upholstered manufacturing sector that AHFA’s supplier division, now known as Solution Partners, is about to embark on an initiative to research ways to address the need for skilled workers. MEMBER NEWS Where to Find It… THIS IS THE FOURTH INSTALLMENT IN OUR continuing series on the navigation tools within AHFA’s new website, www.ahfa.us. This month we highlight the Events page. Details on programs, registration fees and hotel accommodations for AHFA education events are always posted on the AHFA website as soon as they become available. There are two ways to find an event of interest: 1) The most current upcoming events are always listed on the website home page. You’ll find them under the words UPCOMING EVENTS in the righthand column, directly underneath the blue “Join AHFA Today!” box. Click on your event of interest to go directly to the information page for that event. 2) If your event of interest is several months away, or if you don’t know the date and don’t see it listed on the home page, click either on the words UPCOMING EVENTS at the top of the column, or the words See Full Calendar of Events at the bottom of the column. Once you are on the Events page, scroll down through the calendar until you find your event of interest. Clicking on a trade show or non-AHFA sponsored event (in blue) will take you to the registration page for that event on the organizer’s website. Clicking on an AHFA event (in gold) will take you to a page dedicated to that event with details such as the agenda, speaker bios, registration form, hotel link (if applicable) and any other pertinent details. After an event, if you are looking for slide presentations or handouts, these will be posted under the Education link. If you have any questions or comments about AHFA’s new website, contact AHFA’s Vice President of Communications, Pat Bowling, at [email protected] Manufacturing Summit COM Label Continued from page 1 Continued from page 1 Center for Logistics, Trade and Transportation; MSU’s Extension Service and the MSU Forest and Wildlife Research Center. Also slated to speak on the future of manufacturing in Mississippi and the surrounding region is former MSU president and the current chancellor emeritus of the University of Alabama System, Dr. Malcom Portera. The program also includes a panel discussion on the future of logistics and transportation in manufacturing that will be moderated by Dr. Chad Miller, director of the University of Southern Mississippi’s Center for Logistics, Trade and Transportation. Panelists include experts in the areas of highway transportation, rail transportation, container traffic and logistics. Finally, AHFA Vice President of Regulatory Affairs Bill Perdue will address the future of the legislative and regulatory landscape for manufacturing. Registration will open at 8 a.m. The program will run from 8:30 a.m. to 3:15 p.m. Registration is $99 and includes lunch, breaks and conference materials. Find a link to the registration page at www.ahfa.us on the EVENTS page. A block of rooms has been reserved at the Hilton Garden Inn located in Starkville, Miss. The group rate of $119 per night can be obtained by calling the hotel directly at 662/615-9664 and requesting the Manufacturing Summit rate. For more information, email [email protected] sample TB 117-2013 compliance labels, including a green one for “upholstered furniture using Owner’s Own Material.” Bureau officials advised AHFA that the green law label could not be combined with the TB 117-2013 compliance label, because “custom upholsterers are only adding material to a product, and old materials still remain in the product.” Therefore, BEAR-HFTI concluded, “placing a TB 117-2013 flammability label on a product that contains, in part, old materials, would not be appropriate.” This explanation alerted AHFA staff that the Bureau’s definition of custom upholstery did not match the industry’s. “At that point, we reviewed the language in the California Code of Regulations and discovered that ‘owner’s own material’ probably was not intended to refer to a custom fabric on a new piece of furniture,” explains Bill Perdue, AHFA’s vice president of regulatory affairs. “Rather, it refers to an article of furniture ‘received from the owner.’ The green label requires the manufacturer or reupholsterer to certify that the end product is the same one that was received from the owner, for the exception of any new materials added in the process of repair or re-upholstery.” After an exchange of emails with Bureau officials, AHFA received this guidance: “If a product is manufactured using all new materials, outside cover fabric included…the manufacturer must follow the white law label requirements.” February 2015 | page 3 www.ahfa .us P.O. Box HP-7 High Point, North Carolina 27261 Telephone 336/884-5000 Fax 336/884-5303 www.ahfa.us 2015 CALENDAR FEBRUARY 18 MARCH 18 MARCH 24-25 APRIL 18-23 JUNE 24-26 AUGUST 2-6 ICFA BOARD OF DIRECTORS MEETING Rosen Shingle Creek Hotel Orlando, FL RETURN SERVICE REQUESTED MANUFACTURING SUMMIT Franklin Center • Mississippi State University Starkville, MS AHFA BOARD OF DIRECTORS MEETING The Ritz-Carlton Pentagon City Arlington, VA HIGH POINT MARKET ANNUAL MARKETING MEETING The Ritz-Carlton Pentagon City Arlington, VA SUMMER LAS VEGAS MARKET SEPTEMBER 16-19 INTERNATIONAL CASUAL FURNITURE & ACCESSORIES MARKET OCTOBER 17-22 HIGH POINT MARKET For details on AHFA events, go to www.ahfa.us. MEMBERS CONTINUE SAVING WITH FUEL DISCOUNT PROGRAM In 2014, AHFA’s fuel discount program produced the largest savings per gallon for member companies in the history of the program. The rapid reduction in the cost of crude oil in the fourth quarter of 2014 and the slowness of the truck stops to drop the posted price per gallon produced an average margin for the truck stops of almost $0.90 per gallon. As of January 13, 2015, AHFA members were saving an average of $0.73 cents per gallon. Companies fueling consistently within the AHFA network were achieving savings of over $0.80 cents per gallon. The advantages to participating in the AHFA fuel discount program have never been greater. For additional information, please contact Jeff Beaumont at 540-989-3836 or email him at [email protected] STAFF Andy S. Counts C H I E F E X E C UTI V E O F F I C E R email: [email protected] 336/884-5000 Patricia N. Bowling V I C E P R E S I D E NT O F C O M M U N I CATI O N S email: [email protected], 336/881-1006 Jaclyn C. Hirschhaut V I C E P R E S I D E NT O F P U B L I C R E L ATI O N S A N D M A R K E TI N G email: [email protected], 336/881-1016 Mary O’Keeffe D I R E CTO R O F S A L E S email: [email protected], 336/881-1010 Bill Perdue VICE PR E S I DE NT OF R EG U LATORY AFFAI R S email: [email protected], 336/881-1017 David Purvis VICE PRESIDENT OF MANUFACTURING AND OPERATIONS email: [email protected], 336/881-1036 International Casual Furnishings Association Executive Director: Jackie Hirschhaut, [email protected] Solution Partners Executive Director: Andy Counts, [email protected] Specialized Furniture Carriers Executive Director: David Purvis, [email protected] The Furniture Executive is published monthly by the American Home Furnishings Alliance.
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