Furniture and cabinets outsourcing

Furniture and cabinets outsourcing

Furniture and cabinets outsourcing

  • Type: Partner Search
  • Country: Vietnam
  • Year: 2019
  • Industry: Furniture Manufacturing

Customer’s Problem

The increasing cost structure in China and 25% import customs duties to the USA are driving outsourced manufacturing to an unsustainable level. US manufacturing is no more an option due to labor costs. To do something is essential as the market has changed rapidly and the company has pression in its profits as the price increase cannot be transferred to the final customer.

Our Solution

 

Seek a new low-cost manufacturing country without losing quality and flexibility.

Vietnam has become one of the major manufacturing HUB’s in Asia, supplying home furniture as well as professional furniture to export markets. Buyers are outsourcing their own models or buying the latest OEM- collections.

Vietnam has several thousand furniture factories in 3 geographical clusters, North Vietnam (Hanoi and surroundings), Center of Vietnam (Danang and surroundings) and the biggest cluster of the country in South Vietnam, Ho Chi Minh City and surroundings.

Based on our proposal, the Customer assigned FinnSEA Nordesk OU to perform a partner search to find qualified furniture factories. Together with the customer, we created a list of requested qualities and competencies of the supplier, the ideal profile of the factory.

That profile was applied against a number of furniture factories to find a shortlist of 10 companies answering to the requirement.

At this point, to save time and for the first supplier, it was decided that the search would concentrate on the South only. Those companies were then visited by our consultant, interviewed and benchmarked in various points like machinery, size, export experience, quality, sustainability, etc. They also were shown the drawings of the products to verify that they can manufacture the products.

After reporting all the details to the Customer, we selected together 6 most interesting factories to visit. FinnSEA Nordesk arranged all the visit program and for 3 days the Customer and FinnSEA Nordesk met again the companies for deeper discussions and analysis. Samples were presented for the companies and prices negotiated.

Successful Result

After all meetings, the Customer selected 2 companies to continue with. Samples were done, accepted and the pilot production started. Customer saved several months of time by using FinnSEA Nordesk to do a swift Partner Search, instead of spending 6-12 months visiting exhibitions or randomly from listings selected companies

Project Pictures