MiBiz story on Herman Miller Inc.
Written by Mitch Galloway
Sunday, 21 January 2018 12:28
“From where I sit, I believe there has been an increase in automation,” Haverdink told MiBiz. “I do not see them ever being what I would call ‘a very automated industry,’ but I would say it is on the increase. … As we move more from craftsmanship to high volume items, it lends itself to automated processes.”
The company is investing in its manufacturing operations to help drive operational efficiency. In the first quarter of Herman Miller’s 2018 fiscal year, the company experienced capacity constraints in several product categories, including height-adjustable tables and laminate storage solutions.
As a result, Herman Miller’s first quarter gross margins came on the lower end of expectations as the company incurred higher costs related to overtime and outsourcing, President and CEO Brian Walker said at the time. The gross margin pressure also carried over into the second quarter.
Walker told brokerage analysts that the company plans to invest in manufacturing equipment over the next three years as a means to reduce labor costs in the long term and “drive greater efficiency so that we can … be able to run with fewer people.”
“That will largely be how do we not replace folks that are retiring and at the same time be able to grow volume,” he said in a conference call to discuss quarterly results.
As a supplier of automation equipment to manufacturers, including office furniture OEMs, Industrial Control Service Inc.’s Mark Ermatinger hears repeatedly that the labor shortage is fueling customers’ investments in robotics.
“Traditionally, the furniture people haven’t done much (with automation),” said Ermatinger, the vice president of sales at Industrial Control. “Before they weren’t doing any automation, (but) the people issue has really hurt them. … They have exhausted all other options physically possible.”