Cabinet Shop Growing Pains

      A cabinet shop owner gets advice on expanding his production volume while integrating some complex new software into his workflow. July 12, 2008

Question
I run a rapidly growing bespoke (custom) kitchen business in the UK, and I'd love to hear your views on where to add the next people in the company structure.

In the workshop we have three furniture makers (one of whom is a charge hand, has limited management responsibility, and buys for the workshop), one apprentice, and a part-time machinist. We use regular trusted subcontractors for carcass cutting, spraying, deliveries, installation and on-site painting.

In the office we have a part-time administrator who deals with appliance buying, job scheduling and general administration tasks, my wife who works around 6 hours per week on marketing and branding, and me. I do sales, design, quoting, customer liaison, workshop management, quality control, problem solving, buying, company strategy, onsite detail finishing (about 2 days per project, makes sure it's all up to scratch and makes the customer happy to see me there at the end of the job) and everything and anything else.

It's a common problem that the boss has too much to do and I'm no exception. Virtually everything I do is rushed and it's only through luck that we don't get more spectacular cock-ups.

Our turnover has doubled in the last 9 months to an annualised £410k (around $820k) and we're set to continue on the same growth if I can only keep the whole thing together. Cashflow is generally good and we have no borrowing.

We currently operate in a tiny 1500sqft building on a farm with a small office, but we're close to moving into a new 4300 sqft building, with a brand new extraction system and £25k-worth of additional machinery. I am expecting a 15% increase in workshop productivity from the extra space and new machinery. We don't have a CNC machine yet, but I plan to buy one in around a year.

A year ago I bought Microvellum, one of the first companies in the UK to do so, but I haven't had the time to implement it. We can't use the standard libraries out of the box and need to invest around 20 days work to modify them. I have an IT background and only I can do this highly technical work within the company. MV is crucial to our efficiency and growth but I just can't get the time to do it.

Overall I want to have a fully bespoke hand made product that is tightly controlled by IT processes, like the DELL model of mass-customisation. I know that with my passion for accuracy, efficiency and quality, it can be done. I am very interested in lean manufacturing, but I couldn't go to the last seminar I was booked on as I was too busy.

Our target is £800k for the year to April 2009, which is achievable, and the market is there, but I need to add people. Where should I do it? I am the bottleneck in the process, but I feel that it will be impossible to get someone to do my job. I know I'm not supposed to feel that way, and I'm sure I'm not that great in reality. Perhaps it's a matter of finding the right person that can give me the confidence that they'll do what I want well and not screw up.

The plan for the workshop is easy - add another apprentice, another trainee furniture maker and perhaps a full-time machinist. They can learn from the brilliant team I already have.

In the office what do I need? My current best idea is a high quality graduate; they wouldn't have the business experience, but could learn. I need someone clever. I am worried that if I recruit someone experienced, I will end up with a company that operates in the same old inefficient way as all the others. We operate in a rural area with relatively low average education levels (mostly high school, not college or university), but there is a relatively high density of furniture makers. What have you done, if you've been in this situation?

Forum Responses
(Business and Management Forum)
From contributor P:
If you hire a college graduate to handle the MV stuff, he won't have the judgment necessary for doing the drawings. It is easier to train a shop guy to use CAD than to teach a CAD guy cabinetmaking, but that is a long runway and you will probably end up at the mercy of this person.

In my opinion, two basic functions have to be performed. One is to drive work into the shop, and the other is to drive work out of the shop. If the same person is doing both functions, it is too much of a whipsaw. Your real problem is you don’t have a shop foreman who does workshop management, quality control, problem solving, buying. You need to write this up concisely so that your foreman will have exact policy to follow and not be forced to make up his own policy. I would make up an organization chart so that everyone’s duties are clearly delineated and there is no confusion on policy and duties. You would still have to do onsite detail finishing, i.e. quality control.

This should free you up to implement MV. Once you have this set up, I would take a shop guy and teach him MV. Then you can concentrate on sales.



From contributor G:
I'm unclear who will handle the drawings in MV after you've implemented it. MV is a very technical program. I have led the implementation of it in my company. I would suggest that you hire a professional to come in and set up MV for you, or you'll never have enough time to do it right. (I guarantee it will take more than twenty days, unless you have extensive experience in MV already.)

As to who you have work on the drawings and put the stuff to the floor from MV, I would ensure they are comfortable with both AutoCAD and Excel before I ever thought of hiring them. Shop experience will be just as necessary. The truth is it takes a skillful, diverse person to produce custom work efficiently in MV. These people are rare and demand a fair dollar. It is possible to train someone for this, but you need to know upfront that it'll cost you a lot in time and errors. You must have a system in place for their work to be checked (not a bad idea for anyone, though). My fear is that you will not have the time to do this, as you already wear a lot of hats.

Also, if you're not using CNC equipment yet, MV will not be as useful to you. My point is that an MV implementation must be planned extraordinarily well in order to go smooth. Many companies don't have the resources, in time or key personnel, to support the implementation (ours barely made it, with 20 employees) and you need to be wary of this. It's great software, and I wouldn't trade it now that we're making money with it, but I know half the staff in Medford, Oregon by their first name as a result.



From contributor L:
I have to pretty much agree with contributor G. We do all commercial work and struggled with the MV implementation. We are a 20+- man shop with CNC router experience, beam saw, Koch dowel and insert, molder and an experienced crew. Even though MV is sold by promoting its ability to do custom work, it works best as a base of products that can be modified but not totally redesigned for every job. To do that, you or someone with a lot of ability has to create the library of your products using a lot of skill in writing formulas for all the variables. Once this is done, MV will indeed create the g-code for nested routing or the Excel information to let the optimizer program create the information for the beam saw and CNC controlled dowel/boring machine. We had to write our own interface for the Koch machine after waiting a long time and finally having the MV staff fail to get it done. (Our Koch has an additional horizontal boring unit and a vertical boring unit and the z-axis is numerically controlled, the x-axis has 4 reference stops.) They also struggled a long time at getting the tool files done for the Komo router. We use bar codes now on the labels to set up the Koch dowel and bore machine. The graphic images are used on the labels for the bander, but the two lines that MV provides for the banding instructions are too cryptic to be of much use. Best advice, if you don't have a lot of skilled staff time available, hire someone with a lot of experience in MV implementation. MV is now running pretty well for us after two years of getting to this point. We had been AutoCAD users for years before tackling MV; it would have been nearly hopeless had we not had the AutoCAD background and years of CNC router experience!


From contributor W:
I went through a gut-wrenching process of growing our organization a few years ago, so I have some strong ideas. Look at every single employee and think of ways that they can each take on more responsibility. I did not say take on more workload. As each person takes on more responsibility, they pass some of their workload to another trainee, if appropriate. Your goal is to eventually pass all of your operational functions to other people, so you can stand back and think about the big picture, and troubleshoot problems.

You did not mention bookkeeping or human resources. This may be because of your size. I have found it absolutely necessary to have a good bookkeeper. We have gotten big enough that I like to have a degreed accountant, but she also does all our human resource work too, and she says she likes the variety of doing both. The advantage of a bookkeeper is they can take care of all the Quickbooks stuff, and they can chase money for you. I only talk with about 1 customer a year about money collection. She takes care of it all: credit checks, setting credit limits, sending statements, hounding bad accounts, etc. As you get bigger, this would be an excellent position to create.

If you can possibly promote someone for a responsible position, as opposed to hiring outside, do it. Your crew will view your company as a place of opportunity instead of a dead end establishment. The person you took a chance on already was loyal to you, and now is even more so.

You need an employee manual. You need performance reviews at 30-60-90 days, 6 months, and annually thereafter, with additional 6 month reviews optional. You need a performance-based incentive system based primarily on production output, because that is how you make your money, not nickel and diming your expenses.

This one is tough, and you may have to wait until someone leaves the company or changes positions to complete... Organize your company on paper by functions, in a logical way, then organize your company like you have it on paper:
President: strategic planning, supervising all managers/supervisors that report to you, securing financing, etc.
Marketing: pricing, defining customer base, determining customer needs and wants, etc.
Production Manager/Supervisor/Foreman: hiring, firing, training, performance reviews, etc.

Continue with bookkeeping, sales, human resource, maintenance, customer service, purchasing, safety coordinator, etc. Now at your size, you will wear several hats, as will others. Define those hats, and be clear to your employees what hat they are wearing, what the responsibilities of that hat are, and what performance is expected of them while they wear that hat.



From contributor U:
Congrats on the growth and no borrowing. I would most definitely get the MV in place at least to do some basic cutlisting and material summaries, especially if you are going to move and add some new machinery. That stuff has got to be fed. The sooner you get it implemented, the better.

I recently paid someone to come in and get all of my files in order and make sure every receipt filed was placed in the accounting software. We ordered checks, and haven't looked back - handwritten checks are a thing of the past. Sort of like our shop drawings and cutlists.

All the time spent on hand drawings and then approval, then time on cut lists. Software draw, change and press a key and voila - print your lists!

As the owner, I would most definitely visit each job, but to finish for two days is too much. Could you send a subcontractor or an in-house finisher?

Contributor P makes a good point that you are driving the business into the shop and someone has to drive it through the shop. This is exactly where we are at and we only got here one step at a time. As a former IT guy, you need to use your assets and knowledge to your benefit. Stand back and look at what the software aspect can take off your shoulders - it is huge.



From contributor P:
Contributors G and L, the questioner already has MV. I find it hard to believe that his situation is comparable to yours. He has to learn MV for output to a 3 man shop with no CNC and maybe AutoCAD? It can't be that bad? He can deal with CNC later. (Hopefully with a working post.)


From contributor G:
While his situation may be different in volume, I believe that the advice that contributor L and I gave is still valid. The reason is that we've both been through an MV implementation. At some point I'm sure he wants to go the CNC route, or he would have bought much simpler software. Admittedly, it's easier to get MV to spit out the right sizes of parts than it is correct machining, but it's still a chore. You still need someone sitting in that seat that's knowledgeable enough to check the cutlists to make sure they're right, to ensure that the hardware is placed on the cabinets right so that the reports are correct, etc. If he's doing high-end custom residential, he's also going to have to go through the learning curve of 3D AutoCAD coupled with MV for drawings probably. Also, he may have to get into rendering, etc. Not exactly easy for a 4 man shop. He seems smart enough to know that if all he wanted out of MV was cutlisting, he could have done it with Excel and a freeware optimizer. I think MV is part of his long term goals. As such, he needs to know what he's up against.


From the original questioner:
Contributor P, you're right, driving work into and out of the shop is difficult. Since the workshop part is mostly under control, I think a good quality production manager could be part of the solution and free me up to implement MV.

Contributor G, at the moment I do all of the design work on AutoCAD and write the spreadsheets that go through to the workshop. When MV is up and running that will stay the same, but I anticipate getting someone in to help me. We will produce around 30 kitchens this year, so most of my design time is in getting the layout and style right with the customer and MV will help speed up putting that into production. I understand your warning about implementation - that's why I want to do it now and grow the company with MV rather than trying to shoehorn it in when we're bigger.

Contributor L, most of our kitchens have similar structures. The main changes are in proportions and mouldings used, so provided the flexibility is built into the library, we should be okay? We'll worry about the CNC later, but I'll make sure I buy one that has an easy link to MV. Fortunately I have about 8 years of AutoCAD experience.

Contributor W, we've been so short of space I haven't been able to bring in the trainees we need to allow the workshop guys to take on more responsibility. When we've moved, in about 6 weeks I hope, we will be able to do as you suggest. We have a bookkeeper and accountant, HR is handled by Hannah and I and we specialise in unusual interviewing techniques (getting taken out in the interviewee's interesting car, bringing in one of the kids to ask some questions, etc!) which seem to find good people! Manual - brilliant idea, I've started already. If I include how we do everything, or how I want it done, then it will be a starting point for the MV implementation. Because it's all in my head it just comes pouring out. We do have reviews and a performance related bonus that amounts to about 2.5% turnover. Your further points about defining the roles, structure, etc. I will try to do in the manual. Thanks - inspiring stuff.

Contributor U, my subs are dependent on the workshop getting everything on site on time to finish properly, that's really why I need to go on site at the end. I need to make sure nothing gets missed, and checklists in the manual will help.

Any more ideas are welcome, but you guys have helped my thinking already. Brilliant stuff.



From contributor R:
Now you've got me curious. How are you putting out 30 kitchens a year with three guys and no CNC?!? Do you outsource everything but the carcasses?


From the original questioner:
We will do 30 this year. Last year we did around 20, with 3 makers, apprentice and part-time machinist. Hard work, some of my weekends, efficiency. We outsource carcass cutting and spraying. Everything else is in-house.

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