The disjointed local furniture sector, which has been hit by cheap imports, will be in dire straits if manufacturers don’t start working collectively.
DURBAN -  The disjointed local furniture sector, which has been hit by cheap imports, will be in dire straits if manufacturers don’t start working collectively and update their processes to avoid further job losses and businesses closing, according to the eThekwini Furniture Cluster (EFC).

The furniture manufacturing sector is the third largest labour-intensive manufacturing industry, with huge inputs in terms of raw materials including wood, natural and synthetic textiles and fabrics, steel and other metals, adhesives and paints.

Paige Jenje, the EFCs project manager, said rather than competing against each other for a “smaller piece of the pie”, they needed to unite and combat the threat of imports.
“The KZN furniture sector is  disjointed with most companies acting in isolation and many operating with outdated processes. We’ve identified that the furniture space is dominated by a handful of large key players, with the rest of the market made up of SMEs and sole proprietor type businesses,” said Jenje.

The cluster says that since the 2000s, many furniture business have closed due to their inability to compete against cheaper imports on both price and quality specifications. This has led to a reduction in employment from more than 50 000 jobs to roughly 25 000 jobs across South Africa. Jenje says this could get worse. 

The furniture sector presents a large opportunity for job creation. Jenje says the sector also boasts multiple opportunities in the supplier development and youth employment spaces. 

The EFC said local businesses were able to improve their BBBEE scorecards through supplier development programmes. If implemented correctly this can assist firms to improve their processes and become better able to supply local customers.

According to Jenje, the sector lacked specialised skills, which meant that most firms were “recycling” skills with employees moving from one manufacturer to another, with no additional skills being created. 

This presented an opportunity to focus on youth employment through skills training learnership programmes, he said. 

The EFC currently noticed a strong move for retailers and other customers to meet specific price points in their various target markets. 

This had meant that manufacturers had needed to be creative in order to save on costs and meet these demands. 

The local suppliers who were able to do this were generating innovative solutions in the form of flat-pack (Ikea-type) furniture and improving on material sourcing methods which require sound processes in the pre-production and planning space. Jenje said this was a weak point for many local
manufacturers.

Jenje said the EFC was also seeing that quick response – predominantly used in the clothing and textile space – was starting to spread into the furniture space. “This means that retailers require quicker lead times from purchase order to shop floor in order to keep up with fashionable trends. This puts local suppliers at an advantage as they are positioned close to market. However, this will also require manufacturers to be able to meet other customer requirements such as price, quality, delivery on time and in full (which is a weak point for many manufacturers).”

Jenje said one of the sector’s biggest headaches was firms having to tackle Sector stresses alone.

“The only way to revive the sector and assist manufacturers to catch up to the 4th industrial revolution is to act collectively. This is best co-ordinated through the clustering mechanism which does this by identifying critical skills and developmental gaps in industry by talking to industry, scoping what is required to address gaps in collaboration with industry, applying cluster efficiencies and cost effectiveness to the solution and continuing the cycle.”

The cluster, which was established last year, said as it grows, it was identifying more initiatives to meet industry needs and their focus areas will include value chain alignment, raw material sourcing, market exposure, business skills development, technical skills development and lead time and flexibility. 

The cluster says that the impacts of 4IR on the local furniture sector is still difficult to quantify. 

“What we do know is that most furniture businesses in KZN are not ready for major disruption, with many operating with legacy issues in the form of processes and machinery. 

For firms to continue to compete against foreign markets there is a large need for investment in new technologies in conjunction with a strong business process foundation. The first step would be for firms to start measuring key performance indicators, that is, moving into a data driven business decisions, ” said Jenje.

BUSINESS REPORT