The representative survey conducted in April 2010 includes more than 104 companies in the furniture-producing industry which have a workforce of at least 250 persons and sales of at least € 10 million. Of the respondents, 80 percent were purchasing managers; 20 percent managing directors or executive personnel. Excerpts of the study will be exclusively published in the May issue of the trade journal Möbelmarkt.
Many furniture manufacturers do not react to current developments in their sales and buying markets. Thus, 40 percent of the respondents stated that their companies' sales had decreased since the economic and financial crisis. Also, one fourth of them considers increasing costs in the areas of raw materials, energy and logistics in the next few years as a challenge for their own purchasing department. And 22 percent are of the opinion that they must keep their sales prices stable and defend their niche.
"The calculation is simple: Keeping sales prices stable with rising costs and decreasing sales will mean that, in the end, there'll be a lot less money in the pot", says Gerd Kerkhoff. "Furniture manufacturers who do not react immediately to such mega trends will lose their competitiveness and drop further behind the champions in their industry."
And true enough: 96 percent of those responsible for purchasing see the need for change in purchasing. Yet, only 14 percent speak out in favor of fundamental changes; 82 percent hold the view that small changes would be sufficient. What's remarkable: Of the purchasing managers at larger companies with sales of over € 50 million, 29 percent want fundamental changes; but only eight percent of those in small companies. Overall, only 42 percent of the respondents have contingency plans to react to cost increases, sales drops and challenges such as individual consumer demands and the formation of oligopolies among suppliers. "Small and medium-sized businesses ignore fundamental market changes – with eyes wide open", says Kerkhoff.
This is also frequently due to the continuing low status of purchasing departments within the companies. Despite a high material quota especially in the furniture industry, it still happens in 41 percent of the companies that the procurement department is not included in all decisions regarding the purchase of goods and services. Even today, other departments still buy independently goods for their company. Accordingly, the purchasing department does not have the chance to adjust conditions or design a purchasing strategy. "I'm surprised about these statements", says Kerkhoff who has been helping, for more than ten years already, small and medium-sized companies – even from the furniture industry –n the professionalization of their purchasing department. "In the year 2010, I had expected a higher degree of professionalization in the furniture industry." Kerkhoff Consulting already consulted such furniture producers as the leading kitchen manufacturers SieMatic and Nobilia.
A total of 58 percent of the purchasing managers complain about time problems when they would like to be able to deal with higher priority issues such as purchasing strategy and supplier management – aside from their day-to-day business. Another 19 percent indicated that they "don't have any time at all" for it. One third considers the budget to be too low which is provided for the expenditures of additional tasks.
"However, that's only one side of the coin", says Professor Wolfgang Stölzle from the University of St. Gallen, head of the Kerkhoff Competence Center. "Actually, on the other side, there are those companies thinking in long-term concepts who have already started to offensively change their purchasing processes.“ A total of 34 percent of the respondents expect increasing budgets for their area; 57 percent not only have contingency plans but are already in the midst of their implementation of measures. Here again, there is a gap between large and small companies. While almost two thirds of the large companies have already taken measures, barely half of the small companies have come that far. Stölzle: "In the next few months, furniture manufacturers will have to also restructure the purchasing department, in addition to their other operative areas; and they must reconsider their purchasing strategy. Many of the respondents are already right in the middle of it – those failing to react, but rather waiting it out will be pushed from the competitive process in the long run."
Those interested in the complete study results, please contact:
Kerkhoff Consulting, Mr. Christian Pfeiffer, Head of Corporate Communications, under telephone number +49 211 621 80 61 -0 or presse(at)kerkhoff-consulting.com.
Media Contact
Christian Pfeiffer
Leiter Unternehmenskommunikation
Tel.: +49 (0)211 / 62 180 61- 0
c.pfeiffer(at)kerkhoff-consulting.com |
