Study On Solid Wood Furniture Supplier Production Improvement

Home furnishing is closely related with people's daily life and necessities. The home furnishing wood industry in China, which developed during the past 30 years in China, is today quite mature offering good quality furniture still at very competitive prices strengthened by cheap labor and low technology on both domestic and multinational markets. When the global economic crisis happened in the second half of 2008, the over-consumption of consumer goods influenced the home furnishing as well as most other markets. In Europe and in the United States this lead to a collapse for many small retailers, but for the bigger companies this became an outstanding opportunity to restructure. One part the restructuring lead to working actively with selected suppliers in strengthening the entire supply chain, through knowledge sharing between the purchasing organization and the Chinese manufacturers to create an optimal win-win situation. In below thesis, I will use"L"company as an example."L"company is a multinational furniture retail giant with its own unique business model and supply chain. The thesis will also address the purchase situation in China and analyze current problems and the main reason behind those. Together with selected suppliers, the purchasing organization assembled a team of production specialists within the local organization to drive a Supplier Production Improvement Project. The approach would be using tools from Lean Production (TPS) and Six Sigma to achieve quick wins and improvements within the entire supply chain in terms of efficiency, lead-time, quality, logistics and raw material procurement. This project differs from usual ways to implementing Lean Six Sigma methodologies, having the buyer stepping in with resources to consult and develop the seller to achieve the improvements in manufacturing instead of bringing in external consulting companies. In this paper, the above mentioned project preparation, execution and implementation with continuous improvement plan will be discussed in details. By joining forces, the purchasing company would drive the project to achieve increased productivity, quality with reduced production costs not only leading to stronger cooperation between buyer and seller, but also leading to a more transparent business relation with open books enabling buyer and seller to share and shape optimal business conditions together. For multinational companies sourcing in China, this is a completely new way to solve problems, which is worth the learning.