Best Practices -- Fast-Track Furniture

Dec. 21, 2004
Leveraging just-in-time and automation, American Leather is revolutionizing its industry through mass customization.

For American Leather, a high-end custom leather furniture manufacturer, offering 30-day delivery on any product -- which literally can be any one of a million custom designs -- is just one of the benefits of implementing automated and just-in-time (JIT) systems. Another benefit: The Dallas-based company's revenues have steadily grown since its start-up in 1990, and in 2001 American Leather had sales of $39.5 million with a 300-person workforce. Impressive dossier, considering that the furniture industry as a whole isn't the most flexible or technologically advanced. Indeed, the company founders recognized an opportunity to use JIT methods to offer quick turn-around (two-week shipment). "We felt we could be successful because the industry was rather archaic and fragmented without a lot of innovation and use of technology," says Sanjay Chandra, vice president and co-founder of American Leather. "The predominant wholesale manufacturers at the time [1989-1990] were either Italian, requiring container shipments with long lead times, or old-line companies doing things the old-fashioned way." To capitalize on this opportunity, Chandra and Bob Duncan, president and co-founder, used their backgrounds as manufacturing consultants. "We worked in other industries where automation and JIT methods were just standard," says Chandra. "So we decided to selectively use automation where it made sense financially, and where the payback on the capital investment was sufficient to offset labor and manufacturing overhead." The result was a mix of technology and software -- some readily available, some developed by American Leather -- that enabled the company to mass produce high-quality custom leather furniture. While Chandra acknowledges that competitors today are using automation technologies more frequently, he says that "in many cases [it's] to automate the old way of doing things. They can cut pre-determined nests (leather shapes) faster and with better quality, for example, but if they do not schedule with small batch sizes and short lead times, the automation does not reduce WIP inventory." For American Leather, automation was a natural fit to keep the company's 95% on-time delivery rate stable and work-in-progress numbers down (less than three days.) "A handcutter cutting hides can only cut so many different orders and different styles before it gets too confusing," says Chandra. "An automated cutting system, if fed with all the right information, can really cut an infinite number of orders, and it doesn't complain about the fact that we've layered six levels of options." One of the systems that American Leather uses is Humantec, made by Charlotte, N.C.-based Humantec Systems Inc., which enables workers to semi-automate the nesting of the leather on the hide and fully automate the cutting with accurate and repeatable results -- within 0.004 of an inch compared with manual hand cutting, repeatable to 0.125 of an inch. "At our growth rate we would have choked," says Chandra. "We were cutting one hide per hour on manual systems. We now cut five to seven hides per hour using the Humantec system." American Leather assembles 225 finished pieces of furniture per day. "You can do it the manual way, but you'd suffer on quality. In our industry you don't want to trade off quality for anything."

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