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The Furniture Industry and the Firm

The industry

The furniture industry produces a wide variety of products ranging from upholstery, bedroom, kitchen, dining, and occasional furniture (wall storage, room dividers, coffee and other small tables, display cabinets, etc.), beds and bedding, and office furniture. There are also a number of other smaller sectors such as educational and garden furniture, public seating, wheelchairs, etc. The kitchen division has increased in relative importance over the last decade or so with the rise in popularity of fitted kitchens.

The material, use and environment necessitate totally different products, with quite different design parameters. Even where ergonomically similar, furniture is manufactured to different severity grades as specified by FIRA (the Furniture Industry Research Association). Very light and delicate reproduction furniture is suitable only for careful functional use, while severe contract grades are suitable for transport terminals, student common rooms and for use by the armed forces.

As noted, fitted kitchens have been growing in importance in the industry. The "fitted" approach is a more general trend for bedrooms and other furniture. A second trend of some relevance is the "furniturisation" of many industrial and consumer products such as speaker and hi-fi cabinets, television cabinets, cassette, CD and video storage, and gas and electric fires. A third trend is the emergence of "traditional" pine kitchen and bedroom furniture. And yet another trend is the growth of a bespoke sector.

In common with many other industrial sectors, the furniture industry of the UK has failed to do as well as those of other countries, especially European.

The firm           

Oakland has focused on the dining and occasional divisions, both of which have been slower growing. It has suffered somewhat as a result, leading the firm into losses after its initial very successful early growth. Nevertheless, since the buy-out two years ago and the minor restructuring which then took place, the basic quality of Oakland's products have enabled it to break-even on annual sales of £10-12m. This represents about 10% of the relevant UK market.

Moreover, there are indications that if lead-times could be improved and stock levels reduced, the firm could move to healthy profits and be well set for growth, especially with the introduction of new ranges.

Oakland employs about 300 people. There are 210 on the shopfloor, of whom 144 are skilled: 65 machine operators and 79 cabinet makers and finishers. The remaining 66 are semi-skilled or unskilled, and work on general handling jobs, packing and unpacking, etc. There are 90 staff: 20 production people including foremen and supervisors; 25 sales field staff; and about 40 clerical staff.