Business remodel for Wichita firm Custom Cupboards
02/12/2012 7:31 AM
02/12/2012 7:31 AM
The burst of the nation’s housing bubble in 2008 affected not only area homebuilders, but one of Wichita’s few midsize manufacturers that isn’t in the airplane business.
It was the grinding halt of the construction of new homes some four years ago that struck Custom Cupboards, a southwest Wichita firm that builds custom cabinets for kitchens, baths and dens.
Before the burst, the industry norm was trying to keep up with the frenetic pace of home construction. At the time, company officials estimated that part of the market represented more than half of Custom Cupboards’ business.
But the sharp decrease in building cabinets for new homes forced Custom Cupboards to reassess its business and how it would move forward in a slowly recovering economy where the pace of new home construction was tepid.
“The housing bubble is really what changed our industry as a whole,” said Mael Hernandez, Custom Cupboards president, who was originally hired two years ago as a marketing officer tasked with revamping the 31-year-old company’s marketing program.
“Analysts think the market will not return to pre-2008 levels. So now you have to go out and compete every day.”
Custom Cupboards got its start in 1981 when brothers Ron — the company’s CEO — and Dan Henry started the business in a 3,000-square-foot building on Lulu Street in downtown Wichita, making cabinets for local builders and remodelers.
In 1994, after it had outgrown its space, the company moved to 3738 S. Norman, near Tyler and K-42, which provided it ample ground for a larger building and future expansion. Since moving there, Custom Cupboards has expanded three times and now occupies a more than 200,000-square-foot building. It employs 180 workers, which is down from the 330 it employed before the housing crisis and recession.
Most of the company’s work is building cabinets for kitchens and baths. But it also does cabinets and desks for home offices as well as other large furniture such as tables, credenzas and hutches.
Custom Cupboards doesn’t build its products to be sold off the shelf. Homeowners get their cabinets through a network of more than 200 dealers in 37 states – dealers who mostly are kitchen and bath designers.
The dealers place an order specific to a kitchen or bathroom redesign project. Custom Cupboards manufactures those cabinets using nine different hardwoods such as hickory, oak and cherry and knotty “species,” too. The company also offers thousands of different finishes for the cabinets.
Those homeowners, Hernandez said, are not limited to the affluent.
“We have a range of customers, from small homes to mansions and everywhere in between,” he said.
Manufacturing and marketing
Hernandez and Joe Freud, vice president of manufacturing, said competing in today’s environment meant the company had to turn its focus mostly to the home remodeling market — which Hernandez said now accounts for about 90 percent of Custom Cupboards’ business — and make internal changes.
One was to implement lean manufacturing, in other words, producing a high-quality product in the most efficient way. Ron Henry said the concept of lean — which aviation manufacturers and suppliers have embraced for more than a decade — was a byproduct of a continuous improvement program launched at Custom Cupboards.
Lean is an ongoing process of company officials monitoring and evaluating the way their products get built and finished every day.
“It’s a better, cheaper, faster approach to everything,” Freud said.
The continuous improvement and lean programs at Custom Cupboards led to a redesign of the manufacturing floor that increased efficiency and improved workflow. The programs also led to a reduction in the amount of wood the company wasted in manufacturing, and reduced errors in the manufacturing process.
That has helped the company keep adjusting to an accelerating manufacturing cycle. Freud said Custom Cupboards used to have 10 to 14 weeks to manufacture and ship an order. Now, it’s four to six weeks.
“They want everything now,” he said. “Making kitchens in a week, whoever gets to that first, wins.”
Hernandez said that shortly after he joined the company he began traveling to visit its dealers, asking them for honest feedback about the company and its products.
“To be able to meet customers’ needs, you ask and listen,” he said.
The company also did a review of its entire product line, adding new products and eliminating those that were “no longer relevant,” Hernandez said. It also trimmed its number of available finishes from nearly 4,000 to 2,000.
More recently the company has become aggressive in pursing new dealers, Hernandez said. Since May it has added 19 dealers. By the end of the year he expects to add another 40 to 50. The company also created an online marketing and direct mail program for dealers to easily customize and order marketing materials that Custom Cupboards provides to them.
In a 2008 Eagle article, the company’s annual sales were listed at $35 million; Hernandez said the company no longer discloses annual revenue or sales. But he added that while sales have not returned to pre-recession levels, the changes he and other executives have implemented are beginning to show results.
“We are beginning to see the impact of all our work and seeing some growth,” he said.