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Mass Customization of Wood Furniture as a Competitive Strategy

Article  in  International Journal of Mass Customisation · January 2008

DOI: 10.1504/IJMASSC.2008.017140

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200 Int. J. Mass Customisation, Vol. 2, Nos. 3/4, 2008

Mass customisation of wood furniture as a

competitive strategy

Torsten Lihra*
Forintek Canada Corp.
Québec, G1P 4R4, Canada
Fax: (418) 659 2922
E-mail: torsten.lihra@qc.forintek.ca
*Corresponding author

Urs Buehlmann
Buehlmann Consulting
San Diego, CA 92154, USA
Fax: (310) 924 4902
E-mail: buehlmann@gmail.com

Robert Beauregard
Université Laval
Québec, G1K 7P4, Canada
Fax: (418) 656 5262
E-mail: robert.beauregard@sbf.ulaval.ca

Abstract: The existence of some segments of the US furniture industry is

threatened by imports from offshore countries. Mass Customisation (MC) is
discussed as a competitive strategy for US furniture manufacturers to
offset their intrinsic production cost disadvantage. Examples from four
domestic furniture industry subsectors are used to propose a possible
correlation between the level of product customisation (MC) offered and their
success in the market. The US kitchen cabinet industry was found to offer the
highest level of MC of all subsectors analysed. Interestingly, at the present
time, the kitchen cabinet industry is not heavily affected by offshore
imports. The wood household furniture industry, on the other hand, was
ranked last in regard to MC and was also the one most heavily affected by
offshore imported furniture. The study indicates that MC can be used as a
successful business strategy for domestic producers competing with low-cost
offshore manufacturers.

Keywords: Mass Customisation; MC; furniture; business models; furniture

manufacturer survey; market globalisation; industrial engineering; lean
manufacturing; United States; US.

Reference to this paper should be made as follows: Lihra, T., Buehlmann, U.

and Beauregard, R. (2008) ‘Mass customisation of wood furniture as a
competitive strategy’, Int. J. Mass Customisation, Vol. 2, Nos. 3/4,
pp.200–215.

Copyright © 2008 Inderscience Enterprises Ltd.

 Mass customisation of wood furniture as a competitive strategy 201

Biographical notes: Torsten Lihra is Leader of the Furniture Group at Forintek

Canada Corp., Canada’s wood products research institute. He played a key role
in creating the Partenariat de recherche sur l’industrie du meuble (PARIM)
(Research Partnership for the Furniture Industry), a major initiative for
conducting R&D dedicated to the Canadian furniture industry. His research
work is focused on marketing and management issues related to the furniture
industry. Holding a Master’s Degree in Wood Science, Mr. Lihra is presently
working on a PhD project on mass customisation concepts for North American
furniture manufacturers.

Urs Buehlmann is President of Buehlmann Consulting, an engineering and

management consulting enterprise serving the forest products and related
industries. He also serves as an Adjunct Faculty at Université Laval, Québec.
He was a Faculty at North Carolina State University, where his area of
expertise focused on business strategies to successfully compete in a global
economy. He holds a PhD, an MBA and an Engineering Degree.

Robert Beauregard is Senior Chair Holder of the Industrial Research Chair on

Engineered Wood Products for Structural and Appearance Applications
(CIBISA). His area of expertise is the modelling of manufacturing systems for
the forest industries. He develops comprehensive approaches to the design of
business models, taking into account the interactions between the wood
resource, process development and innovative products for better business
performance. In 1995–1997, he was Research Scientist with the New Zealand
Forest Research Institute. From 1997 to 2000, he was at the Eastern Laboratory
of Forintek Canada Corp., where he was instrumental in the creation of the
Department for Value Added Wood Products.

1 Introduction

Successful competition from low-labour-cost countries has led to serious downsizing in

the US furniture industry (Buehlmann et al., 2004; Hilsenrath and Wonacott, 2002)
despite a favourable market environment for furniture over the past few years. While the
North American furniture market is predicted to continue its growth at a moderate pace
based on demographics and income predictions of the US population (Schuler and
Buehlmann, 2003), uncertainty about the success of the domestic industry exist. Low-cost
offshore countries enjoy a significant price advantage in the US market, but price is not
always the main sales argument to satisfy end-user needs and aspirations. Customisation
of the product, pre- and post-sales service, and delivery time influence consumers’
buying decisions as well. Schuler and Buehlmann (2003) forecast an increasing market
share of customised products in the decades to come (Figure 1).
Mass Customisation (MC), for a variety of reasons, is considered a promising strategy
for domestic manufacturers to successfully compete in the future (Buehlmann, 2004).
While standardised, mass-produced furniture is made more cheaply at similar or better
quality in low-cost offshore countries, customised furniture gives producers who are
close to the customers a sustainable competitive advantage. Therefore, the domestic
furniture industry should be aggressive in exploring and implementing opportunities to
manufacture mass-customised furniture. The objective of this study was to review the
202 T. Lihra, U. Buehlmann and R. Beauregard

concepts of MC related to furniture and to assess the furniture manufacturers’ opinions

towards these concepts of its potential as a profitable business strategy. In fact, the paper
hypothesises that the level of MC offered by furniture industry subsectors is correlated
with the loss of market share of domestic manufacturers to lower-cost offshore producers.

Figure 1 Market share of standardised, mass produced versus customised products

100%

80%

60%

40%

20%

0%
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Standardised Customised

2 Mass customisation concept

Stanley M. Davis in 1987 introduced the term ‘mass customisation’ in his book Future
Perfect (Davis, 1987). He described MC as a trend towards the production and
distribution of individually customised goods and services for mass markets. Pine (1993)
considers MC as the historical successor of mass production while Kotha (1995) sees it as
a system that may co-exist with mass production. For practical reasons, MC is closely
linked to Just-in-Time (JIT) production, as customised products can be sold only to
the particular customer who ordered it. Taxonomies for MC and manufacturing
without finished goods inventories are proposed by numerous authors (Amaro et al.,
1999; Gilmore and Pine, 1997; Lampel and Mintzberg, 1996). Montreuil and
Poulin (2005) proposed a personalisation framework containing eight levels, whose
framework was adapted for the furniture manufacturing industry (Figure 2). It proposes
the following categories:
!" Popularising – the mass producer’s solution to customisation, offers a limited
number of furniture collections or furniture items that can be stocked by the retailer.
Focus on evolving the popular product mix in line with evolving customer needs.
These items are sold off-the-shelf and are often positioned at the low end of the
furniture price structure.
 Mass customisation of wood furniture as a competitive strategy 203

!" Varietising – has the objective to offer a broader range of furniture models covering
a wide range of customer needs. Retailers pick those they want to offer off-the-shelf
and rely on quick delivery from the distribution network for fast replenishment. Most
often, variety is achieved with relatively simple changes to the standard product line,
such as adding additional colour options or furniture items to a furniture collection.
!" Accessorising – refers to the production of standard core modules that may be
personalised by adding accessories from a specified set of options. Particular types of
finishing are also considered as an accessory. Final assembly of accessorised
products is performed either by the customer, the retailer or the manufacturer.
!" Configuring – offers end-users the opportunity to design furniture from a set of
standard components or modules. Configuring may be performed directly by the end
user through the use of software tools and samples or it may be realised with
assistance of trained sales representatives.
!" Tailoring – product designed/engineered to customer needs. The customer is closely
involved in the product specification and realisation process. It removes the strict
adherence to a pre-defined set of components. However, limits are defined as
boundaries of what can be manufactured efficiently. Tailoring may be offered to end
users or to retailers. Furniture manufacturers often offer tailored, exclusive
collections to major retail accounts.
!" Servicing – refers to assisting the customer in developing a complete home (room)
furnishing concept. Within this concept, furniture may be personalised by any of the
seven other options of the model. In addition to the desired furniture, the end user
gets the service of a professional designer to add other furniture, accessories,
mouldings, colours, or wall paper to match his particular taste or interests. The
furniture manufacturer is part of a network of home furnishing producers that offer a
complete range of products.
!" Adjusting – product adjusted to customer needs after usage. The product has to be
adaptable to offer options to allow for adjustments. An example for adjusting would
be a baby crib where side rails may be used as head and food panels for a twin size
bed when the baby has grown up. Adjusting may be integrated to create an
evolutional furniture item (e.g., adjustable office chairs).
!" Monitoring – refers to the ongoing gathering of data regarding the evolution of the
needs of a customer. The objective is to know when to suggest new products or
services to a customer. For the furniture industry, this could mean to find the
moment in a customer’s life when new furniture that fit the customer’s evolving
lifestyle better, might be sought for.

The concept of product platforms (Van Vuuren and Halman, 2001) is strongly related to
accessorising and configuring. The authors point out that the underlying logic of a
product platform consists of three aspects: (1) modularity, (2) standard interfaces for
assembling and (3) design standards that the modules conform to. Product platforms may
be considered as enablers for accessorising and configuring.
204 T. Lihra, U. Buehlmann and R. Beauregard

Figure 2 Point of customer involvement and decoupling point for furniture manufacturing

Popularising Varietising Accessorising Configuring Tailoring Servicing Adjusting Monitoring

Retailing Distribution Packaging Finishing Assembling Component Supply Engineering Design

manuf.

Sale-20

Ship-20

Pack-20
Finish-20

Assembly-20
Make-20

Supply-20
Engineer-20

Design-20
Key :
Point of customer
Decoupling point Supply chain process 2O = “to order”
involvement
Production flow Inventory Personalisation option

Figure 2 presents the relation between the eight personalisation levels, customer
involvement and the manufacturing processes. This model is based on research conducted
by Poulin et al. (2004) and has been adapted to the furniture industry. The production
flow direction goes from right to left reflecting that the end customer is
the starting point pulling the production process towards him. Depending on the
personalisation level, customers are involved at a different point of the production flow.
Their involvement creates the decoupling point. The decoupling point marks the
beginning of the process that leads to a personalised product. From the decoupling point
on, production is strictly to order. Prior to this point, production may be in either push or
pull mode.

3 Furniture trade data analysis

If customers pay premiums for customised computers, cars or clothes, furniture products
should present similar opportunities. While no conclusive evidence can be offered due to
the complexity of such industry-wide analysis, secondary trade data was analysed and
results are presented below to support this proposition.
 Mass customisation of wood furniture as a competitive strategy 205

3.1 Wooden casegoods household furniture (NAICS 337 122)

Figure 3 presents total wood household furniture imports from 1997–2005 and imports
from the two leading exporting countries to the USA, namely P.R. China and Canada.
Total imports are presented in billion $ (left axis) and imports from the leading countries
are presented as a percentage of total imports (right axis). US domestic shipments
(defined as domestic production-exports) from 1997 to 2002 are presented in billion $
and relate to the left axis. Official domestic shipment data was available to 2002. Import
and export data was available to the year 2005. According to Figure 3, domestic
shipments of wood household furniture increased slightly from 1997 to 1999 and
remained stable until 2002 at roughly $12 billion. China replaced Canada as the number
one wood household furniture exporting country to the USA in 2000. These numbers
show that the US domestic producers have not been able to take advantage of a growing
domestic retail market which grew from $4.2 billion in 1997 to $19.6 billion in 2002.
Thus, imports are gaining market share, reaching 63% of the domestic shipments of
wooden, residential household casegoods in 2002. Imports continued their increase
from 2002 to 2005. By that year, China represented nearly half of all imported wood
household furniture.

Figure 3 US wood household furniture domestic shipments and total imports in billion $ and
imports from the leading countries as a percentage of total imports

100
14
90

12 80

70
10
Billion US$

60 Percent
8
50

6 40

30
4
20
2
10

0 0
1997 1998 1999 2000 2001 2002 2003 2004 2005

Canada China US domestic shipments Total imports

Sources: USITC (2006) and US Census Bureau (2006)

3.2 Upholstered furniture (NAICS 337 121)

Figure 4 presents upholstered furniture imports to the USA. The statistics shows US
domestic shipments in billion $ between 1997 and 2002 as well as imports between 1997
and 2005. Total imports are presented in billion $ (left axis) and imports from the four
leading countries are presented as a percentage of total imports (right axis). The value of
upholstered furniture produced and sold in the USA increased from $8 billion in 1997 to
206 T. Lihra, U. Buehlmann and R. Beauregard

$10.5 billion in 2002. Overall imports are low, reaching only 15% of domestic shipments
in 2002 compared to wooden casegoods household furniture. China took over the leading
position as an exporting country from Italy in 2004. From 2000 to 2005, Italy’s share of
US upholstered furniture imports shrunk from 44% to 14% while China’s share of
imports increased from 10% to 50%. Canada lost import shares from 13% in 2000 to 7%
in 2005 and Mexico kept its share stable at around 15%.

Figure 4 US upholstered furniture domestic shipments and total imports in billion $ and imports
from the leading countries as a percentage of total imports

100
14
90

12 80

70
10
Billion US$

60

Percent
8
50

6 40

30
4
20
2
10

0 0
1997 1998 1999 2000 2001 2002 2003 2004 2005

Canada China Mexico Italy US domestic shipments Total imports

Sources: USITC (2006) and US Census Bureau (2006)

3.3 Wood office furniture (NAICS 337 211)

Figure 5 presents total wood office furniture domestic shipments between 1997 and 2002
in billion $. Imports are presented from 1997 and 2005. Total imports are presented in
billion $ and imports from the leading countries are presented as a percentage of total
imports. US production sold domestically increased from $2.9 billion in 1997 to $4.1
billion in 2000. By 2002 it had decreased to $2.7 billion. This may be attributed to the
events of September 2001 and the burst of the .com bubble. Canada is the leading wood
office furniture exporter to the US market although we can see the trend of Chinese
imports growing while Canadian are decreasing in proportion.

3.4 Wood kitchen cabinets (NAICS 337 110)

Figure 6 presents wood kitchen cabinet domestic shipments from 1997 to 2002 in billion
$. Total imports between 1997 and 2005 are presented in billion $. Imports from Canada
and China, the leading KC exporters to the USA, are given as a percentage of total
imports. The value of domestic shipments of wood kitchen cabinets increased
continuously from $9 billion in 1997 to $14 billion in 2002. Overall import share is low
 Mass customisation of wood furniture as a competitive strategy 207

at 4% of domestic shipments in 2002. However, imports increased continuously to 2005.

Canada, the leading exporter to the USA represented about 90% of the total imports in
2000. Its import share decreased to 69% in 2005 while China, the second most important
exporter of kitchen cabinets to the USA in recent years saw its import share increase to
18%. Given the low prominence of imported KC, the US kitchen cabinet manufacturers
do not appear to be under particular pressure from international competitors. It appears
that the US based companies were able to take full advantage of an expanding US market
and grew domestic sales by 56% from 1997 to 2002.

Figure 5 US wood office furniture domestic shipments and total imports in billion $ and imports
from the leading countries as a percentage of total imports
100
14
90

12 80

70
10
Billion US$

60

Percent
8
50

6 40

30
4
20
2
10

0 0
1997 1998 1999 2000 2001 2002 2003 2004 2005

Canada China US domestic shipments Total imports

Sources: USITC (2006) and US Census Bureau (2006)

Figure 6 US kitchen cabinet domestic shipments and total imports in billion $ and imports from
the leading countries as a percentage of total imports
100
14
90

12 80

70
10
Billion US$

60
Percent

8
50

6 40

30
4
20
2
10

0 0
1997 1998 1999 2000 2001 2002 2003 2004 2005

Canada China US domestic shipments Total imports

Sources: USITC (2006) and US Census Bureau (2006)

3.5 Discussion of furniture trade data

It has to be pointed out that the presented furniture import data includes finished products
only. Furniture component and raw material imports are not captured by these numbers.
In regard to MC it is worthwhile to contrast two subsectors, the wooden household sector
208 T. Lihra, U. Buehlmann and R. Beauregard

versus the kitchen cabinet sector. The former is loosing market share on a large scale (by
now, more furniture are manufactured outside the USA than inside), while the latter
seems to maintain imports successfully at a low level. Indications exist that MC
adaptation of those two industries are one reason for the difference of the market share
held by the domestic producers. Indeed, household furniture is sold from inventory with
little to no customisation while kitchen cabinet manufacturers make a completely
different value proposition to their customers. Different cabinet modules may be
configured according to individual customers’ needs. Then, the kitchen is made-to-order
and sent to the customer’s home for installation at a predetermined date. Wood household
furniture consists of individual furniture pieces. These items are generally not fitted into a
given space and manufacturers had less pressure to develop component standardisation
and product modularity. This lack of standardisation and modularity is today a major
barrier to the development of customisation solutions.

4 Furniture manufacturer’s perception of mass customisation

To shed light on MC as perceived by furniture manufacturers, 23 in depth interviews in

the USA, Canada and Germany have been conducted in fall 2005. Emphasis was made on
North America. Germany was added as an important furniture producing and
technologically advanced country. The interviews conducted in Germany add a European
point of view on MC.

4.1 Furniture manufacturer survey data collection

For data collection, an experience survey was conducted. An experience survey seeks to
obtain insight into the relationship between variables rather than to get a simple
consensus on best practices. It is a qualitative exploratory research being characterised by
an unstructured methodology based on small samples providing a deeper understanding
of the problem setting. To perform the survey, individual In-depth Interviews (IDI) with
furniture industry specialists were performed in Canada, the USA and Europe.
Judgmental sampling was performed by the author to select the specialists to include in
the survey. A total of 23 specialists from 22 different companies were interviewed.
Sample characteristics are summarised at Tables 1 to 4. Table 1 presents the company
distribution by country. The majority (13) of the 22 companies included in the study were
located in Eastern Canada. Four companies were located in North Carolina, USA and five
in northern Germany. The present study focuses on high labour cost countries,
particularly North America. Germany is an important and technologically advanced
furniture producing country and was added to bring an European point of view on MC
into the study. The present survey does not aim to be representative of the furniture
industry of those three countries. Emphasis was put on the household furniture sector (see
Table 2). As previously mentioned, that industry sector is suspected to be able to gain
market shares by implementing MC. Five interviews were conducted with people from
furniture industry related companies (component manufacturers, software developers, and
a furniture manufacturer association). These respondents were included in the survey to
get a more accurate picture of MC impact on the supply chain. Table 3 presents the
company size expressed by annual sales volume. The furniture industry consists mainly
of Small and Medium size Enterprises (SME). There is no standard definition of a SME
 Mass customisation of wood furniture as a competitive strategy 209

and classification varies across different countries. For the purpose of the present study,
SME is defined as companies having an annual sales volume of less than US$50 Million.
14 out of the 22 companies included in the survey fit that definition. The position of the
respondent within his companies is presented in Table 4. In one company the owner and
the plant manager were interviewed. For that reason the sample size of respondents
exceeds by one the company sample size. All respondents were part of the middle or
upper management, 40% being company owners.

Table 1 Company sample distribution by country

Country No. of companies Percent

Canada 13 60
USA 4 18
Germany 5 22
Total 22 100

Table 2 Company sample distribution by industry sector

Industry sector No. of companies Percent

Household furniture 10 45
Office furniture 2 9
Upholstered furniture 2 9
Kitchen cabinets 3 14
Furniture components 2 9
Software 2 9
Furniture manufacturer association 1 5
Total 22 100

Table 3 Company sample distribution by annual sales volume

Annual sales ($US) No. of companies Percent

up to 10 Million 2 9
>10–25 Million 8 36
>25–50 Million 4 18
>50–100 Million 1 5
>100–250 Million 5 23
More than 250 Million 2 9
Total 22 100

A set of 26 open ended questions were used as a survey framework. Interviews were
conducted at company locations with the exception of one interview realised at a wood
machine show in Germany. Interview durations varied from 30 to 70 min. With the
permission of the respondents, all interviews were recorded by a digital voice recorder
and transferred to a computer. Additional notes on interview circumstances and any other
particularities were written in a survey log book. Answers were transcribed to a text file
210 T. Lihra, U. Buehlmann and R. Beauregard

and coded. The coded answers enabled to build a database using SPSS 11.5 software. The
qualitative nature of the survey did not permit statistical data analysis but the database
facilitated interpretation of gathered information.

Table 4 Respondents job title

Job title Frequency Percent

Company owner 9 40
General manager 5 22
Plant manager 4 17
R&D manager 2 9
Quality control manager 1 4
Sales manager 1 4
Marketing manager 1 4
Total 23 100

4.2 Results of the furniture manufacturer survey

Each company’s value offer was defined by the respondent. The eight level MC model
introduced previously was presented to and discussed with the respondents for validation.
All respondents shared the opinion that the model represented well the concept of MC
applied to the furniture industry.
A set of questions addressed the level and type of customisation offered by the
furniture industry. End users did not ask for customisation. All respondents mentioned
that the initial step towards customisation always came from the manufacturers. Furniture
manufacturers first offered product customisation and assessed customers’ perception
through sales statistics. After this initial step customers might have asked for further
customisation. This ‘try and error’ approach may be explained by a lack of direct
communication between manufacturers and end users. Seven out of the 19 furniture or
component manufacturing companies had no contact with end users. Seven companies
got end user feedback through their retailers or sales representatives and five companies
conducted market studies. Conducting market studies was not related to company size.
The five marketing study conducting companies were distributed over the range of
company sizes. Manufacturers most of the time appear to rely on retailers’ willingness to
share information about end user needs. Respondents mentioned that the most valuable
feedback came from specialised independent furniture stores. These stores seem to
develop a closer relationship with end users and manufacturers.
Asked about the type of customisation end users appreciate most, all respondents
mentioned colour and finishing options first followed by options on furniture dimension.
Furniture configuration and choices of hardware were also perceived as valuable options.
All manufacturers agreed that offering more customisation to end users should have a
positive impact on their businesses.
The interviewed furniture industry leaders were asked to quote the four previously
mentioned industry sectors in regard to MC on a 7-point Likert scale (1 = very low
customisation level, 7 = very high customisation level). The results presented at Table 5
confirm the hypothesis that the kitchen cabinet industry offers the highest level of
 Mass customisation of wood furniture as a competitive strategy 211

customisation (6.35) to end users. The small standard deviation highlights that the
respondents had no doubt about the leading position of this industry sector in regard to
MC. With 3.09, the household furniture sector obtained the lowest score supporting the
theory that this industry sector may further develop MC. However, the important standard
deviation points out that not all respondents shared the same opinion on the low MC level
of the household furniture industry. As a matter of fact, some companies in that industry
sector offer a very high level of customisation to their end users. The respondents ranked
the office furniture industry second with a score of 4.86. No correlation was found
between the variation of the scores, company size and country of location. Distribution
channels of professional office furniture manufacturers were described as different
from the other sectors. Professional offices are planned by designers, decorators or
architects. End users – people who will work in these offices – are generally not
consulted during the planning period. The upholstered furniture industry were rated third,
the score of 3.33 being near to the household furniture industry. The end users buying
process for upholstered furniture, was described as similar to the one for household
furniture. Table 6 summarises MC levels and production modes typically found in the
four furniture industry sectors in descending order of importance as described by the
industry leaders. The MC levels of Tailoring, Servicing, Adjusting, and Monitoring were
generally not offered.

Table 5 Furniture industry sector ranking in regard to customisation offering

n Industry sector Score Std. dev.

23 Kitchen cabinets 6.35 0.65
22 Office furniture 4.86 1.32
21 Upholstered furniture 3.33 1.32
22 Household furniture 3.09 1.45

Table 6 Furniture industry sector main MC levels and production modes

Industry sector MC level Production mode

Kitchen cabinets Configuring Assemble to order
Accessorising Make to order
Varietising
Office furniture Accessorising Assemble to order
Configuring Ship to order
Upholstered furniture Accessorising Assemble to order
Household furniture Varietising Ship to order
Popularising

Respondents perceived retailers as a barrier in their effort to offer more customisation to

end users. The experience of manufacturers revealed that retailers were not convinced
that MC would have a positive impact on profits. In-store end user assistance to
customised products increases the time per sale ratio and more product knowledge is
needed to explain product options to customers. Respondents mentioned that retailers
often choose one particular product configuration they offer in their stores without giving
end users the opportunity to customise the product. However, one household furniture
manufacturer offering product configuration pointed out that a test conducted in a
212 T. Lihra, U. Buehlmann and R. Beauregard

furniture store showed that only 40% of the products were sold as presented in the store,
while 60% of their products sold in that store were configured differently by the end
users. This example raises questions about traditional distribution channels. To overcome
the problem it may be suggested that MC furniture should not be presented mixed with
standard furniture. Specially trained sales staff could sell MC furniture in a separated part
of a store and offer assistance to end users efficiently.
Customisation offered by manufacturers to retailers was generally limited to product
exclusivity and customised packaging. Exclusive products, (exclusive furniture
collections or exclusive items in non exclusive collections) were offered to major
accounts. Some manufacturers customised packaging by printing the retailer’s logo on
the boxes or by adding special padding to protect furniture from transport damage.
Twenty-one out of the 23 respondents were convinced that customised products
could be sold at higher prices when compared to standard products. The price premium
was expected to depend on the level of customisation. Most respondents shared the
opinion that the maximum price premium could not exceed 20%. In regard to lead time,
all respondents mentioned that order fulfilment time had to be decreased significantly
– for standard or customised products. Up to the Configuring level, respondents did not
expect end users to accept longer lead time for customised products when compared to
standard products.
The majority of the respondents shared the opinion that end users’ design ability was
the true limit to customisation performed by end users. A pre established set of options
offered by the manufacturer to end users was perceived as the most promising way to
offer customisation. All respondents assigned a key role to retailers in regard to MC.
General opinion of the respondents was that qualified sales staff should assist end users
through the customisation process.
A set of questions addressed MC implementation challenges as perceived by the
respondents. These challenges were weighted differently by respondents working for
companies that started the MC implementation process and respondents working for
companies that offered MC for some years. Companies that started the move from
mass production to MC perceived industrial engineering as the biggest challenge. Most
of the difficulties were related to batch size reduction (e.g., machine set-up time, labour
flexibility and work cell integration). MC practicing companies perceived company
culture as the biggest challenge. Respondents mentioned the difficulties to keep alive MC
thinking – especially on the shop floor and at the middle management level. The long
history of mass production had a persistent impact on people’s perception of productivity
and performance. Indicators were related to volume and economy of scale. The change
to MC and indicators like unit production flow, economy of scope and flexibility required
continuous training of shop floor workers and staff. Twenty-one out of the 23
respondents agreed that implementation of lean manufacturing concepts were necessary
to support MC. Labour skills were described to be different in an MC environment. A
higher degree of technical competences and flexibility were required. Unionised
companies had a particular challenge to implement workforce flexibility. The high
number of job classes made a rotation of shop floor workers difficult or impossible. To
support MC implementation, unions had to be integrated very early in the change
process. At the foremen level, more administration and planning skills were necessary to
adapt to fast changing production requirements. All respondents mentioned that MC had
an important impact on the supply chain. This impact was characterised by smaller order
quantities and shorter lead times. To support MC, suppliers had to be carefully selected in
 Mass customisation of wood furniture as a competitive strategy 213

regard to their flexibility and capacity to adapt to a changing demand. Respondents from
supplying companies mentioned their need to get more accurate information on sales
forecasts from the furniture manufacturers in order to plan production. That pointed to a
need for powerful, flexible, and user friendly Information Technology (IT). IT was
mentioned to be one of the most important enablers for MC by all of the respondents.
Twenty-two of the 23 respondents shared the opinion that an investment in IT is
necessary to implement MC compared to 15 respondents mentioning that investment in
production technology is required.
No business model was perceived as particularly adequate for MC. All respondents
agreed that customer orientation, supply chain management and marketing gain
importance. Both, vertical integration and network structure were identified as possible
approaches to MC. It was pointed out that the managerial competences were an important
asset to successfully implement MC.
Respondents expressed their opinion on how they thought the furniture industry may
stay competitive in their respective countries. It is interesting to point out that none of the
German companies mentioned cost reduction as an important factor. The German
companies clearly focussed on increasing end user perceived value. MC, branding,
cluster development, service improvement and targeting of niche markets were embraced
by those companies. Respondents from North American companies mentioned
production cost reduction, MC and faster shipment first followed by service
improvement, targeting niche markets and global sourcing. The low weight assigned to
cost reduction by the German respondents may be explained by their definition of
business strategy which was related to the development of a companies’ ability to be
different. Low production cost was not expected to become a competitive advantage
for the German companies and was therefore not part of their business strategy. It does
not mean that cost reduction was not part of their daily challenges. It seemed to be
generally accepted by the respondents that retailers keep control on end user relationship.
Under that condition, it was surprising that only two respondents mentioned an improved
and tighter manufacturer – retailer relationship as an important asset for future
competitiveness. One respondent pointed out that the furniture buying experience of end
users has to be improved:
“Buying furniture today is generally a boring undertaking. When people will
say ‘Let’s have fun today – let’s see some furniture!’ we will have made a big
step forward. Offering babysitter services and play sectors for kids, addition of
coffee bars to sit down and read the journal, distractions of all kind, attractive
presentation of furniture, customer service, customisation of furniture, fast
shipment … all these concepts may create a pleasant and comfortable
environment that impacts positively end user buying behaviour”.

5 Conclusion

Exposed to global competition and increasing imports from low labour cost countries,
North American furniture manufacturers have to revise their business model. Analysis of
secondary data showed that not all furniture industry sectors have been affected by
imports at the same level. Domestic wood household furniture production in the USA
seemed to be weak in regard to their global competitiveness. The US kitchen cabinet
industry facing a slight increase of imports took advantage from a growing demand and
214 T. Lihra, U. Buehlmann and R. Beauregard

controlled the domestic market. The upholstered furniture and wood office furniture
sectors are both less affected by imports when compared to wood household furniture,
but they control the domestic market less than the kitchen cabinet industry. It was pointed
out that MC might be a potential strategy to increase the value offer of North American
manufacturers, thus strengthen their market position. A MC taxonomy adapted to the
furniture industry was proposed by the authors. That taxonomy describes eight levels of
MC. Five being pre sales customisation levels and three being after sales levels. A survey
of 19 furniture manufacturers and three furniture industry related companies was
conducted to assess the state and potential of MC as perceived by manufacturers.
Respondents ranked the kitchen cabinet industry first and the household furniture
industry last in regard to MC. This supports the hypothesis that MC had a positive impact
on domestic market strength of those industry sectors.
Implementation of MC was perceived as an important challenge. Changes in the
production system to become more lean and flexible, changes of a company culture that
was used to mass production, and supply chain management were pointed out by the
respondents to be the most important challenges in MC implementation. In order to
implement MC, the wood household industry has to introduce component standardisation
and product modularity. Furniture manufacturers seemed to be disconnected from end
users. They got little or no direct feed back about end users needs. Retailers control the
relationship with end users and manufacturers rely on retailer information to get end user
needs. Manufacturers perceived retailers as a barrier to MC. Retailers seemed not to see
evident benefits from offering customisation to end users. This is a critical factor to the
success of MC. Traditional distribution channels may be questioned in regard to MC. The
development of alternative distribution channels may be necessary to bring MC furniture
to the market. The internet offers the opportunity to create a direct contact between
manufacturers and end users and represents a tool to customise products. Direct sales of
MC furniture through the internet are expected to increase in the future. New retail store
concepts adapted to MC furniture may be another alternative to sell customised products.
This situation leads to research topics that should be addressed in the future such as:
What levels of customisation are valued by end users? How should the end user
customise furniture? What are the necessary conditions for retailers to support MC?
Further research on those (and other) MC related topics may help the North American
furniture industry to develop and retain a competitive advantage and to gain market
shares in the context of globalisation.

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