FURNITURE INDUSTRY IN RESTRUCTURING : SYSTEMS & TOOLS

FURNITURE INDUSTRY IN RESTRUCTURING : SYSTEMS & TOOLS

Guidelines
How to align a human resources strategy
with a business strategy

Co-funded by the EUROPEAN UNION

European Social Fund
Article 6 Innovative measures
 Contents
1 Identifying and rectifying weaknesses in the
people organisation 4

2 The HR strategy development process 5

Define the business strategy 5
The business strategy in a human resources context 6
Undertake a SWOT analysis to identify key HR issues 6
Priorities for change 6
Action the change and measure the outcomes 7

3 HR diagnostics 8

4 Example case studies - furniture manufacturers 12

Bed and mattress manufacturer with 340 employees 12
Office furniture manufacturer with 100 employees 12
Manufacturer of furniture (wood and plastic) for the health
care market with 130 employees 12
Upholstery manufacturer of furniture for the health care
market with 51 employees 13
Cabinet manufacturer with 160 employees 13
How to align a human resources strategy

5 Examples guidelines 14
Annual/Seasonal hours working (Appendix 1) 14
Performance appraisal (Appendix 2) 14
Absence control measures and thresholds (Appendix 3) 14

6 APPENDIX 15
APPENDIX 1: Seasonal hours working 15
APPENDIX 2 16
APPENDIX 3 18
 Introduction
The globalization is changing the structure of labor intensive industries
such as the furniture industry. Increased imports at lower prices force the
European manufacturers to look for competitive edges and if necessary to
restructure their operations. Some looked at their business model, other
at the product, the production, productivity or the relation with the final
consumer or a combination of some or all of these different aspects.
The  solutions, some more successful than others they come up with are
multiple.
The FIRST project has the ambition to look into this subject with the aim to
formulate recommendations to serve as inspiration to manufacturers.
The methodology used was to analyze 30 companies that either went to a
restructuring or that had particular characteristics in one or more aspects of
their business that allows them to (better) cope with the problems arising
from the globalization. This analysis should lead to business models from
which guidelines on specific strategies could be distilled.

Case studies mapping

Best practices 4-5 recurrent

Business Models

NPD BM1 BM2

SCM
Guidelines
Collaboration
HR BM3 BM4

During the work it rapidly became clear that there are almost as many
business models as there are companies, and on suggestion of the advisory
board of the project, it was decided to concentrate on guidelines for practical
strategies in specific fields rather than develop entire business models.
The advisory board also suggested to formulate these guidelines in short
separate formats easily usable by interested manufacturers.
This way the work resulted in the formulation of six guidelines around specific
activities: product development and innovation, supply chain management,
industrial co-operation, outsourcing, human resource management and
electronic communications. In parallel the partners developed a sub
contracting database for manufactures interested in co-operation as an ins-
trument of increasing such co-operation between manufacturers in the EU
and especially with manufacturers in the most recent EU Member States.
Information on the project and on the database can be found on the UEA
web site www.ueanet.com.

The analytical work has been done by the partners under the leadership and
guidance of the MIP, the Polytechnic University of Milan and of AIDIMA, the
Spanish technical furniture center. BFM, MEDIFA and the UEA and some of
its other members contributed in the best practices and the redaction of the
guidelines. Ifabrick, the information department of MEDIFA was responsible
for the Web site and database.

The current booklet formulates guidelines on how to align a human re-

sources strategy on business strategy in the furniture industry. It is not
meant to suggest that European furniture manufacturers should follow the
strategies described, but the booklet wants to contribute to the reflection
on this subject by those manufacturers who feel that it might fit into their
business model. We hope it serves them well.

Bart De Turck
UEA secretary general
FIRST project manager

3
 1 Identifying and rectifying weaknesses in the
people organisation
1 Identifying and rectifying weaknesses in the people
organisation
A business strategy is seen as essential to any organisation but however
A business strategy is seen as essential to any organisation but however well
well researched and defined the corporate goals may be, the strategy will
researched and defined the corporate goals may be, the strategy will be worthless
be worthless without good people and people management systems. For
without good people and people management systems. For example, in very simple
example, in very simple terms, in order to develop a new product an idea
terms, in order to develop a new product an idea has to emerge, research has to be
has to emerge, research has to be undertaken into the potential market and
undertaken into the potential market and the ease and constraints on production
the ease and constraints on production capabilities and the supply chain
capabilities and
assessed. the supply
People drive chain assessed.
or deliver Peopleprocesses
all these drive or deliver all these guises
in various processes
and
in various guises and departments, from design, marketing, sales, purchasing,
departments, from design, marketing, sales, purchasing, technical and pro-
technical(management
duction and production (management and shop floor).
and shop floor).
Therefore, aabusiness
Therefore, strategy
business and the
strategy andstrategic management
the strategic of human resources
management of humanare re-
inextricably
sources are linked. They are
inextricably mutuallyThey
linked. informative. The wayinformative.
are mutually people are managed,
The way
motivated
people areand deployed, motivated
managed, and the availability of skills and
and deployed, knowledge
and will all shape
the availability the
of skills
business strategy.
and knowledge will all shape the business strategy.

Thistool
This tool is
is designed
designed to:to:
x identify the key characteristics of of
• identify the key characteristics an an
HRHR
strategy
strategy
x clarify the issues that need to be addressed
• clarify the issues that need to be addressed in an HR strategy
in an HR strategy

Thetool:
The tool:
is aimedatatsmaller
• xis aimed smaller and
andmedium
medium sized companies
sized that do
companies not do
that necessarily enjoy
not necessarily
enjoythetheluxury
luxuryof of
employing
employinga HRa specialist although
HR specialist the toolthe
although maytool
be used
mayby be used
thosepractitioners
by those practitioners too
too
• xintroduces
introducesmethod intoHR
method into HRanalysis
analysisby by providing
providing threethree key performance
key performance
indicators thatthat
indicators willwill
allow companies
allow companies totoreview
reviewexisting
existing practices
practices and work
and work
towards improvement
towards improvement

Key performance indicators (KPI):

Do I have sufficient information at my disposal in order to compare the HR and

business strategies? Action 1 and Action 2

Can I identify the weaknesses in the HR strategy? Action 3

How do I know if I am developing an effective strategy? Action 4 and Action 5

The KPI Action colours indicate a directly linked section of the guide
The KPI Action colours indicate a directly linked section of the guide

The intention behind the review of the people organisation does not have to be driven
The  intention
by an behind
imperative the review
for change. Reviewsof the
may be people organisation
incremental does not
addressing specific areashave
toofbe driven
concern by you
which an are
imperative for change.
already believe Reviewsfor
may be problematic, may be incremental
example, absence
addressing
levels. Thisspecific
tool can areas
help youoffocus
concern which
your mind onyou are already
individual believe may be
issues too.
problematic, for example, absence levels. This tool can help you focus your
mind on individual issues too.

4
2 The HR strategy development process
2 The HR strategy development process

Decide who
Decide who is
is to
to be
be involved,
involved,
how and at what stages
how and at what stages

Define the business strategy

Set it in a HR context

SWOT analysis

Identify priority changes

Action plan - implement and

measure outcomes

Example case studies in Example guidelines

furniture industry Addressing HR weaknesses

The intention behind the review of the people organisation does not have
to be driven by an imperative for change. Reviews may be incremental
addressing specific areas of concern which you are already believe may be
problematic, for example, absence levels. This tool can help you focus your
mind on individual issues too.

Define the
Define the business
business strategy
strategy
Most organisations
Most organisations possess
possess a business
a business plan with
plan with strategic goalsstrategic goals and
and it is important that it is
important thatis the
the HR strategy HR to
aligned strategy
business is aligned
need. to business
Typically need. Typically
these plans can look 5 years these
plans
ahead. can look
If you do 5notyears
have aahead. If you
clear written do not
business have
strategy a aclear
with written
plan going business
forward,
strategy with a plan going forward, what information can be obtained about
business intentions? You need to determine as well who should be involved
what information can be obtained about business intentions? You need to determine
in formulating the HR strategy and 5at what stages?
as well who should be involved in formulating the HR strategy and at what stages?

Action 1:

Do I understand the business strategy as it could affect people

resourcing needs?

If not, what further information/explanation do I require?

The business strategy in a human resources context

You must not only be aware of the business strategy but be able to assess its
implications for HR management. This will mean that you will need to appreciate the
strengths and weaknesses of the organisation and in this respect you will need to draw
upon information on labour needs and core competency requirements as it affects
business need, current and future.

Action 2:

Identify the information sources/tools available to assess your labour

5
requirements and the competencies of your employees
 Do I understand the business strategy as it could affect people
resourcing needs?

If not, what further information/explanation do I require?

The
The business strategy
business strategy in a human
in a human resourcesresources
context context

You
Youmust notonly
must not onlybebe aware
aware ofbusiness
of the the business
strategystrategy but
but be able be able
to assess its to assess
its implications
implications formanagement.
for HR HR management. This
This will meanwill
that mean
you willthat
needyou will need
to appreciate theto
appreciate
strengths andthe strengths
weaknesses and
of the weaknesses
organisation ofthis
and in therespect
organisation andtoindraw
you will need this
respect you will on
upon information need to needs
labour draw and
upon
coreinformation on labour needs
competency requirements and core
as it affects
competency
business need,requirements as it affects business need, current and future.
current and future.

Action 2:

Identify the information sources/tools available to assess your labour

requirements and the competencies of your employees

If you do not have sufficient information what do you need?

Undertake a SWOT analysis to identify key HR issues

The key issues are those that directly affect the achievement of the business goals.
They may be arranged under headings such as training resources, personal
Undertake a SWOT
development needs or workinganalysis
systems suchto identify
as hours’ key HR
arrangements. issues
Some will be
general to the whole of the workforce or to particular employee groupings, while
others
The keymay be specific
issues to a particular
are those skill or
that directly role. the achievement of the business
affect
goals. They may be arranged under headings such as training resources,
SWOT stands
personal for strengths,needs
development weaknesses, opportunities
or working and threats.
systems A SWOT
such as hours’analysis
arran-
should enable
gements. you towill
Some establish for example,
be general thewhole
to the strengths
of but
theperhaps more critically,
workforce or to par-
weaknesses
ticular in the HR
employee strategy that
groupings, need
while to be addressed.
others For example,
may be specific you may find
to a particular skill
that
or you need to develop specific competencies to cope with the launch of new
role.
products for new markets.
SWOT stands for strengths, weaknesses, opportunities and threats. A
SWOT analysis should enable you to establish for example, the strengths
but perhaps more critically, weaknesses in the HR strategy that need to be
addressed. For example, you may find that you need to develop specific
competencies to cope with the launch of new products for new markets.

Action 3:

Compare the business strategy/need against the human resources

strategy - identifying gaps – SWOT Analysis

Priorities for change

6
Once you have undertaken the SWOT analysis, you must set priorities for resourcing
and/or change. By identifying potential defects in the current people organisation you
Priorities
are well downfor change
the road to developing a more effective HR strategy.

Too much
Once you innovation at any onethe
have undertaken timeSWOT
however may be difficult
analysis, you mustto achieve and that isfor
set priorities
why priorities
resourcing are important
and/or change. together with a plan and
By identifying timescale
potential for action.
defects in the current
people organisation you are well down the road to developing a more ef-
It is advisable
fective certainly at this stage – if not earlier – to do this with a group of senior
HR strategy.
managers because they will have important contributions to the debate and
development
Too of the strategic
much innovation HR one
at any goals.time
Senior management
however may will also have to
be difficult to achieve
authorize
and major
that is whychanges.
priorities are important together with a plan and timescale
for action.
Also, while identifying the need for change in a particular area may be easy, it may
Itnot
is advisable
be possible certainly at it
to implement this stage
in its ideal–form
if not
andearlier – to
therefore do this
barriers with a have
to change group
oftosenior managers
be discussed because
to establish they
potential will have
alternative important
courses of actioncontributions
including if to the
debate and
necessary development of the strategic HR goals. Senior management will
outsourcing.
also have to authorize major changes.

Also, while
Action 4: identifying the need for change in a particular area may be easy,
it may not be possible to implement it in its ideal form and therefore barriers
toIdentify
changenewhavestrategies
to be discussed to establish
and practices neededpotential alternative
to bridge the gaps courses
and of
action including
rectify existing ifHR
necessary outsourcing.
and organisational weaknesses

Any potential barriers to change including any additional HR resources

need to be identified

Action the change and measure the outcomes

 It is advisable
Also, certainly the
while identifying at this
needstage
for –change
if not in
earlier – to do area
a particular this with
may abegroup
easy,of senior
it may
managers because they will have important contributions to the debate and
not be possible to implement it in its ideal form and therefore barriers to change have
development
to be discussedof to
theestablish
strategicpotential
HR goals. Senior management
alternative will including
courses of action also have if
to
authorize
necessarymajor changes.
outsourcing.
Also, while identifying the need for change in a particular area may be easy, it may
not be possible to implement it in its ideal form and therefore barriers to change have
Action 4:
to be discussed to establish potential alternative courses of action including if
necessary outsourcing.
Identify new strategies and practices needed to bridge the gaps and
rectify existing HR and organisational weaknesses

Any potential
Action 4: barriers to change including any additional HR resources
need to be identified
Identify new strategies and practices needed to bridge the gaps and
rectify existing HR and organisational weaknesses
Action the change and measure the outcomes
Any potential barriers to change including any additional HR resources
need to be identified
This section will obviously depend on the previous sections. Careful planning is
Action thean change
required and and measure
achievable timescale for securing the outcomes
the change needs to be set. You
need to decide too how you are going to monitor or measure any actions you put in
Action the change and measure the outcomes
place
This and someone
section should be depend
will obviously given responsibility for this.sections. Careful planning
on the previous
is required and an achievable timescale for securing the change needs to
This section will obviously depend on the previous sections. Careful planning is
Action
be set. 5:You need to decide too how you are going to monitor or measure
required and an achievable timescale for securing the change needs to be set. You
any actions you put in place and someone should be given responsibility for
need to decide
Action plan -too how you are
implement andgoing to monitor
measure or measure any actions you put in
outcomes
this.
place and someone should be given responsibility for this.

Action 5:

Action plan - implement and measure outcomes

7
 3 HR diagnostics

Knowledge tree (current and in relation to future plans):

1 = inadequate
2 = fair (may need more)
3 3=HR diagnostics
Sufficient

Knowledge tree (current and in relation to future plans):

1 = inadequate
2 = fair (may need more)
3 = Sufficient

ACTION 1: Business strategy: 123 123

Current Future

Do I understand the business strategy as it affects people resourcing

– short and long term aims, goals and objectives? For example:

Headcount and projected count – Key job profiles and department

breakdowns
Organisation structure
Investment plans – machinery and systems
Financial plans
Expansion plans
Contraction plans
Changes in products
Changes in processes
Production and workflow (including productions bottlenecks etc)
Payroll expenditure on labour – direct and indirect etc
The supply chain
Plans to acquire national accreditations (e.g. ISO 9001(quality) or 14001
(environment)
Summarize the main aims as they effect resourcing needs:

Identify areas of the business plan where you require further

information and how you are to acquire it:

ACTION 2: HR analysis information and tools: 123 123

Current Future

Am I able to assess labour needs and competencies via information

and tools at my disposal? For example:

Organisation charts
Training underway or planned and completion dates
Job roles/profiles by department
Appraisal data – identification of employee abilities, potential and aspirations
Age profiles – by job, department (e.g. are employees in key roles near
retirement)
Vacancies
Absence data – reasons and amount
Labour turnover figures
Employee reasons for leaving company 8
Working time and systems
Details of outsourced labour if used
Contracts of employment
Health, safety and environment compliance information
Pay data
Performance data – group/individual
Trends in the local labour market – supply and demand
Identify main areas where you need to improve information and data
resources:
Priority remedial action for obtaining that information:

8
ACTION 3: SWOT analysis: 123 123
Current Future

You will need to look at the strengths, weaknesses, opportunities and

threats of your HR strategy against the business plans to identify key
priorities. The key issues are those that directly affect the
achievement of the business goals, for example:

Organisational structure
Specific skills and competencies
Training and training resources
Succession plans
Induction of new employees (introduction to company and rules/procedures)
Personal development
Promotion opportunities
Recruitment and selection
Employee retention
Flexibility/deployment
Pay and incentive systems
Working systems/productivity/quality
Team working
Motivation
Communication strategies and policies
Health, safety and environment practices and procedures
Employee consultation/involvement
Empowerment
Working hours
Work life balance (e.g. part time/flexible to family needs)
Age profile of workforce/departments/key skills
Absence management
Clear written HR documentation
Aide-memoire comments:

ACTION 4: Priorities for Change:

ACTION 4: Priorities for Change:
Assign your own Estimated Managers Possible
HR Area Reason Assign
priorityyour own
rating of Estimated
Timescale Managers
likely to Possible
barriers to
HR Area Reason priority rating
importance of of Timescale
To achieve likely
be to barriers to
implementing
importance
action of To achieve
Actions be
involved implementing
change
action
1 2 3 Actions involved change
1High 2 Low 3
High Low

10

ACTION 5: Action plan:

ACTION 5: Action plan:
Start Identify How will Employee Set
Start Identify How will Employee Set
HR Area date and managers with any Communication outcomes
HR Area date and managers with any Communication outcomes
And end date individual barriers to s and how
And end date individual barriers to s and how
priority of action responsibilities change be will
priority of action responsibilities change be will
rating for delivery of overcome change be
rating for delivery of overcome change be
actions monitored
actions monitored

9
 Example 1: Action – to improve decision making and improve product
quality –period for change – 6 months

Example
Delivery –1:Production
Action – to improve
manager decision
supported bymaking and improve product
line managers
quality –period for change – 6 months
Benchmark
Example 1: reasons
Action –why? Speed-up
to improve day-to-day
decision makingdecision
and making and
improve place more
product
responsibility
quality –period
Delivery for quality
– Production with factory
for change
manager employees
– supported
6 months by line managers

How? – rationalize
Benchmark reasons thewhy?
management
Speed-up structure, and empower
day-to-day employees through
Delivery – Production manager supported by line decision
managers making and place more
education in the
responsibility for importance
quality withoffactory
qualityemployees
and introduce systems that can track back
individual faults to individual workers
Benchmark reasons why? Speed-up day-to-day decision making and place more
How? – rationalize
responsibility the management
for quality with factory structure,
employeesand empower employees through
Inform employees
education of reasons
in the importance of for change
quality andand consultsystems
introduce on major changes
that can track back
individual faults to individual
How? – rationalize workers structure, and empower employees through
the management
Measurement – regular assessments against each of the benchmark reasons
education in the importance of quality and introduce systems that can track back
(above) using
Inform (defined)
employees qualitative
of reasons and quantitative
for change and consultdata
on major changes
individual faults to individual workers
Measurement
Example
Inform employees – regular
2 Action –
ofto assessments
introduce
reasons anagainst
for change and each
individual of the benchmark
performance
consult on major reasons
appraisal
changes and
(above) using (defined)
development system inqualitative
6 months and quantitative data
time
Measurement – regular assessments against each of the benchmark reasons
Delivery
Example –
2 Production
(above) usingAction
(defined)Director
– to and Finance
introduce
qualitative Director
an individual
and performance
quantitative data appraisal and
development system in 6 months time
Benchmark reasons why? Accurately monitor abilities and aspirations, provide
Example 2 Action – to introduce an individual performance appraisal and
training and
Delivery development
– Production to motivate employees, reduce labour turnover
development systemDirector and Finance
in 6 months time Director
How? – Develop
Benchmark appraisal
reasons why? forms and development
Accurately plans and
monitor abilities and aspirations,
train managers in
provide
Delivery techniques
appraisal – Production Director and Finance Director
training and development to motivate employees, reduce labour turnover
Benchmark
Inform reasons
How? – employees
why? Accurately
of intentions
Develop appraisal formsand
monitor
andpositive
abilities
aspects
development
and aspirations, provide
of scheme
plans and train managers in
training and
appraisal development to motivate employees, reduce labour turnover
techniques
Measurement – regular assessments against each of the benchmark reasons
How? –employees
(above)
Inform Develop
using appraisal
(defined) formsand
qualitative
of intentions and
and development
quantitative
positive plans
aspectsdata and train managers in
of scheme
appraisal techniques
Barriers to change
Measurement – internal
– regular resources
assessments – willeach
against needofoutside assistancereasons
the benchmark (e.g.
Inform using
employees
independent
(above) of intentions
consultant)
(defined) qualitativeand
andpositive aspects
quantitative dataof scheme

Measurement
Barriers to – regular assessments against each
need of the benchmark reasons
Example 3: change
Action –– to
internal resources
improve levels–of
will
absence outside assistance
– introduce in 3(e.g.
months
(above) using
independent (defined) qualitative and quantitative data
consultant)
time
Barriers to change – internal resources – will need outside assistance (e.g.
Example 3: Action
independent – to improve levels of absence – introduce in 3 months
consultant)
Delivery – Payroll Manager (data) and Works Director (control system)
time

Example 3: reasons
Benchmark Action –why?
to improve levels of level
An unacceptable absence – introduce
of sickness inhindering
absence 3 months
time
production
Delivery – and giving
Payroll rise to(data)
Manager extra cost through
and Works overtime
Director working
(control system)

How? – introduce
Benchmark an absent
reasons why? Ancontrol policy andlevel
unacceptable absence thresholds
of sickness oncehindering
absence passed
will lead to–and
Delivery
production counselling
Payroll
giving and/or
Manager
rise formal
to (data)
extra cautions
and
cost Worksto
through employees
Director
overtime(control
workingsystem)

Inform
How? – employees
Benchmark reasons
introduce of absent
an reasons forunacceptable
why? control
An change
policy and level of sickness
absence absence
thresholds hindering
once passed
production
will and giving rise
lead to counselling to extra
and/or formalcost through
cautions to overtime
employeesworking
Measurement – regular assessments against each of the benchmark reasons
(above)
How? – using
Inform (defined)
introduce
employees an qualitative
absent
of reasons and
control quantitative
policy
for change data thresholds once passed
and absence
will lead to counselling and/or formal cautions to employees
Measurement – regular assessments against each of the benchmark reasons
(above)
Inform using (defined)
employees qualitative
of reasons and quantitative data
for change

Measurement – regular assessments against each of the benchmark reasons

(above) using (defined) qualitative and quantitative data

12

12

12

10
Questions to consider when setting HR priorities

Questions to consider when setting HR priorities

What are the key components of the business strategy?

How can HR strategies support the achievement of the business goals?
What
What are
are the
the strengths
key componentsand weaknesses of the strategy?
of the business organisation and
opportunities and threats it faces?
How can HR strategies support the achievement of the business goals?
What are the implications of the political, economic, social, technological,
What are the strengths and weaknesses of the organisation and
legal and environmental contexts in which the organisation operates?
opportunities and threats it faces?
To what extent is the organisation in a stable or dynamic (turbulent)
What are the implications of the political, economic, social, technological,
environment and how will this affect our strategies?
legal and environmental contexts in which the organisation operates?
What is the nature of the corporate culture? Does it help or hinder the
To what extent is the organisation in a stable or dynamic (turbulent)
achievement of the organisation’s goals
environment and how will this affect our strategies?
What needs to be done to define or re-define our values in such areas as
What is the nature of the corporate culture? Does it help or hinder the
quality, customer service, innovation, team working and the responsibility
achievement of the organisation’s goals
of the organisation towards its employees?
What needs to be done to define or re-define our values in such areas as
What do we need to do to increase commitment?
quality, customer service, innovation, team working and the responsibility
How
of thedoorganisation
we communicate towards ourits
intentions
employees?and achievements to employees
and how do we obtain feedback?
What do we need to do to increase commitment?
How do we involve employees?
How do we communicate our intentions and achievements to employees
How can we
and how do increase
we obtainresource
feedback? capability?
To
Howwhat extent
do we doesemployees?
involve our HR practices meet future business needs and to
what needs to be done to rectify our inadequacies?
How can we increase resource capability?
In light of the SWOT analysis what are the specific aspects of the HR
To what extent does our HR practices meet future business needs and to
processes and practices that we need to focus upon when formulating the
what needs to be done to rectify our inadequacies?
strategy?
In light of the SWOT analysis what are the specific aspects of the HR
How can we bundle the various HR practices together into a coherent
processes and practices that we need to focus upon when formulating the
whole?
strategy?
How can we achieve the flexibility required to cope with change?
How can we bundle the various HR practices together into a coherent
What
whole? kind of skills and behaviour do we need now and in the future?
Are performance
How can we achieve levelsthehigh enough
flexibility to meettodemands
required cope with forchange?
increased
productivity, better quality and improved customer service?
What kind of skills and behaviour do we need now and in the future?
Does any aspect of the supply chain hinder effective performance?
Are performance levels high enough to meet demands for increased
Will any new products
productivity, planned
better quality andrequire different
improved skills?
customer service?
Is the organisation and management structure supportive
Does any aspect of the supply chain hinder effective performance? of the business
goals?
Will any new products planned require different skills?
Are we making the best use of our skills and capabilities?
Is the organisation and management structure supportive of the business
Are we investing in developing those skills and capabilities?
goals?
Are
Are there potential
we making the barriers
best usetoofchange?
our skills and capabilities?
Are
Are our employment
we investing costs too high?
in developing those skills and capabilities?
Is
Are there potential barriers to change? of management or downsizing of
there a likely need for any de-layering
the workforce?
Are our employment costs too high?
How can we ensure the strategic plans are implemented?
Is there a likely need for any de-layering of management or downsizing of
the workforce?
How can we ensure the strategic plans are implemented?
13

13

11
 4 Example case studies - furniture manufacturers

Bed and mattress manufacturer with 340 employees

Problems identified:
1. To many suppliers performing at different levels
2. The need to continually re-engineer its production processes and
materials/parts input to enable the maximum number of product lines to
be met by the minimum number of components, whilst maintaining high
quality and innovative sought-after designs
3. Age profile of workforce high
4. Shortage of skilled labour

Actions:
1. Recruited a Supply Chain Manager to overhaul their systems and
introduced Key Performance Indicators like supplier/vendor ratings
2. With the initial assistance of consultants introducing ‘lean’ management
techniques to reduce number of components in production
3. Empowered individuals with the responsibility for the quality of their own
work
4. Training & development programmes and skills needs analysis
5.
Re-engineering certain jobs so as to de-skill them by deploying different
designs or innovative techniques
6. Recruited skilled labour from Eastern Europe

Office furniture manufacturer with 100 employees

Problems identified:
1. The lack of codified practices, rules and procedures making it difficult to
manage a workforce who were not sure of the workplace boundaries
2. A de-motivated staff

Actions:
1. Engagement of a consultancy firm to audit its practices
2. The issue to all employees employment documentation covering their
own employment terms and conditions and rules, policies and procedures
as they affected all the workforce
3. A regular audit of the employment documentation via their affiliation to
a national trade association for the furniture industry
4. All employees are now aware of what is expected of them, morale has
improved and management can apply consistent standards when dealing
with employees

Manufacturer of furniture (wood and plastic) for the health

care market with 130 employees

Problems identified:
1. To be seen to have high quality standards by its customer base and for
each employee to continually work to high quality standards
2. Skill shortages
3. A reward system that did not reflect individual contribution to the
Company

Actions:
1. Introduced the nationally accredited quality standard ISO 9001 and likely
to introduce the environmental standard 14001
2. Individuals are empowered with making sure that any product they are
working on meets the quality standard, with personal identification labels
attached to each element of a product an employee works upon so quality

12
 issues can be tracked back to individuals
3. A weekly quality control meeting looks at non-conformity issues which
covers literally anything to do with process or service, allows the managers
to discuss it and put in place procedures to prevent/limit re-occurrence
4. Extensive training and personnel development programmes starting with
performance appraisals with all employees given opportunity to learn new
skills so that they can cover positions or move into them when a vacancy
arises - an apprenticeship programme for new employees
5. Training needs analysis
6. The employment of skilled labour from Eastern Europe and the use of a
local prison’s workshop where prison inmates undertake outsourced work
7.  The  introduction of a 5-band payment system to reward individual
development, skills and experience

Upholstery manufacturer of furniture for the health care

market with 51 employees

Problems identified:
1. Unacceptable levels of absenteeism through ill health and poor timekeeping
- lost production time (measured in hours lost) was on average 7.5% in any
year and could peak around 12%

Actions:
1. As an incentive to good attendance, it introduced an attendance
bonus scheme that would incentivize good attendance and penalize bad
attendance
2. Developed a clear policy on reporting all absences
3. Established benchmarks and thresholds which would result in formal
cautions of employees and potentially dismissal if they continually recorded
poor attendance levels
4. The incidence of lateness has reduced by around 50% and the amount of
total production time lost fell by one third

Cabinet manufacturer with 160 employees

Problems identified:
1. To improve business efficiency given competition from low cost imported
furniture
2. The need to significantly reduce the number of component parts in the
production process

Actions:
1. To lower the cost of production by introducing a range of systems and
performance measures including the techniques of KANBAN (a system for
manufacturing and calling off piece-parts), SMED (improved machine setting
times) and the 5 S’ (individual methods of working and storing tools to
improve efficiency)
2. The number of component parts used has reduced by 20%, 15% saving
in general efficiencies with a target of 25%
3. All main skilled employees trained to nationally accredited standards in
lean manufacturing methods
4. Introduced a flexible method of working time that uses in basic terms the
concept of annualized hours, sometime called seasonal working where hours
are adjusted to meet peaks and troughs in production

13
 5 Examples guidelines

Annual/Seasonal hours working (Appendix 1)

Annual/Seasonal hours’ arrangements can take a variety of forms and can be

quite complex and some of these may not be suitable for companies within
the industry.
However, some arrangements will suit and they rely, in some form, on
converting working time from a week to a year (or even to identifiable blocks
within the year such as quarters), to vary working weeks to match peaks
and troughs in production. There is also usually flexibility to change the
scheduled hours in some weeks if workflow is not what it was expected to be.
There are 52 working weeks in a year. Hours of work therefore, when based
(in this example) on a 39 hour week, can be converted approximately to this
(note: leap years and other factors can change the number of days slightly):
52 X 39 = 2028.0
Less 22 days of annual holiday at 7.8 hours = 171.60
Less 8 public holidays = 62.40
Available working hours in the year = 1794 or 230 days of 7.8 hours each.
Appendix 1 shows how the working year may be laid out.

Performance appraisal (Appendix 2)

The main objectives of an appraisal system are to review an employee’s per-

formance and potential. These systems may be linked to a reward system. A
personal development plan is usually drawn up as a result of the appraisal.
Appraisals are of benefit to employees and employers as the intention is
to improve job performance by making it easier to identify strengths and
weaknesses and determine the suitability for training and development.
They are an opportunity to take an overall view of work content, quality and
volume by looking at what has been achieved during the reporting period and
then agreeing objectives for the next period. Appraisals also introduce a
measure of objectivity, and without them, much will depend on the attitude of
individual managers. Communications too should be improved, as should the
understanding of the company’s objectives.
Appendix 2 example shows the type of performance factors that can be
used.

Absence control measures and thresholds (Appendix 3)

Absences (generally sickness) cost companies but can be controlled and

usually the most disruptive and costly absences are the regular but inter-
mittent ones that last for short periods.
Firstly however you need to know the level of absence in your company and
this can be done for it as a whole and then by department (see example
measures). If an employee is taking more than the normal acceptable level
of absence then by introducing absence thresholds you can require an im-
provement in attendance by using formal warnings or cautions, that ultimately
if unheeded could lead to termination of employment.
Management counselling may also be appropriate, particularly if there is an
apparent underlying cause. Long-term absences usually require a different
approach and invariably involve seeking medical opinion before making any
employment decisions. Legislation too can affect the way matters are handled
and this can occur for example if an employee has developed a disability.
See Appendix 3 for absence threshold triggers and these can be set to suit
you.

14
6 APPENDIX

APPENDIX 1: Seasonal hours working

Example of yearly pre-planned schedule of adjusted hours–

based on variation to normal 39 hour week/8 public and 22
annual holidays
APPENDIX 1: Seasonal hours working: Example of yearly
pre-planned schedule of adjusted hours– based on variation
to normal 39 hour week/8 public and 22 annual holidays
Week Week Variable Cumulative Cumulative Holiday
Number Begins worked Hrs Var./Stan.(39) Variation Public/Annual
1 2 Jan H 0 0 0 1PU/4AH
2 9 Jan 39 39 39 0
3 16 Jan 39 78 78 0 Apart
4 23 Jan 39 117 117 0 from
5 30 Jan 39 156 156 0 holidays
6 6 Feb 39 195 195 0 any new
7 13 Feb 39 234 234 0 starter
8 20 Feb 39 273 273 0 up to
9 27 Feb 39 312 312 0 week 39
10 6 Mar 39 351 351 0 works
11 13 Mar 39 390 390 0 39 hours
12 20 Mar 39 429 429 0 as
13 27 Mar 39 468 468 0 standard
14 3 Apr 39 507 507 0
15 10 Apr 31.2 538.2 538.2 0 1PU
16 17 Apr 31.2 569.4 569.4 0 1PU
17 24 Apr 39 608.4 608.4 0
18 1 May 31.2 639.6 639.6 0 1PU
19 8 May 39 678.6 678.6 0
20 15 May 34 712.6 717.6 -5
21 22 May H 712.6 717.6 -5 5AH
22 29 May 31.2 743.8 748.8 -5 1PU
23 5 June 34 777.8 787.8 -10
24 12 June 39 816.8 826.8 -10
25 19 June 39 855.8 865.8 -10
26 26 June 34 889.8 904.8 -15
27 3 July 34 923.8 943.8 -20
28 10 July 34 957.8 982.8 -25
29 17 July 34 991.8 1021.8 -30
30 24 July H 991.8 1021.8 -30 5AH
31 31 July H 991.8 1021.8 -30 5AH
32 7 Aug 34 1025 1060.8 -35
33 14 Aug 34 1059 1099.8 -40
34 21 Aug 34 1093 1138.8 -45
35 28 Aug 31.2 1125 1170 -45 1PU
36 4 Sep 34 1159 1209 -50
37 11 Sep 34 1193 1248 -55
38 18 Sep 39 1232 1287 -55
39 25 Sep 44 1276 1326 -50 New
40 2 Oct 44 1320 1365 -45 starters
41 9 Oct 44 1364 1404 -40 from week
42 16 Oct 44 1408 1443 -35 39 work
43 23 Oct 44 1452 1482 -30 the
44 30 Oct 44 1496 1521 -25 scheduled
45 6 Nov 44 1540 1560 -20 hours
46 13 Nov 44 1584 1599 -15 without
47 20 Nov 44 1628 1638 -10 premium
48 27 Nov 44 1672 1677 -5
49 4 Dec 44 1716 1716 0
50 11 Dec 39 1755 1755 0
51 18 Dec 39 1794 1794 0
52 25 Dec H 794 1794 0 2PU/3H

19

15
 APPENDIX 2

Examples of performance factors to use when assessing in-

dividual employees

These are typical examples, although not all of which will suit each company.
Points do not have to be awarded against the categories. The appraisal
APPENDIX 2: Examples of performance factors to use when
could simply describe the outcome for each category of measurement in a
assessing individual employees
narrative form.
These are typical examples, although not all of which will suit each company. Points do not have to be
Ifawarded
pointsagainst
are allocated,
the categories.1-4
Theor 1-6 iscould
appraisal typical
simplyand a comment
describe the outcomesection to allow
for each category of
the points awarded
measurement in a narrativeto be quantified. Weightings too can be given to more
form.
important factors so for example X2 so that the ratings are doubled with 2
If points are allocated,
becoming 1-4 or 1-6 is typical
4 etc. Measures, withand a comment
points section to allow
or otherwise, the points
such as theawarded to be
following
quantified.
can be used:Weightings too can be given to more important factors so for example X2 so that the
ratings are doubled with 2 becoming 4 etc. Measures, with points or otherwise, such as the following
can be used:

Example performance rate for individual elements of work

Unacceptable Slightly below standard Above Standard Well above standard

1 2 3 4

Overall performance rating - taking into account all aspects of the job

Performance Occasional Consistently Outstanding

Consistently under-performance good performance performance
Unacceptable

Performance against set objectives - the extent to which previously set objectives
have been met

Not acceptable - Achievements consistently fell below objectives or requirements.

Below expectations - Achievements frequently did not meet several of the objectives or
requirements

Achieved objectives - Achievements consistently met the majority of the objectives or

requirements

Exceeded expectations - Achievements consistently exceeded objectives or requirements

20

16
Example individual work categories measuring/assessing the individual

Job knowledge/abilities/skills - does the employee have the necessary

knowledge/skills to perform in all aspects of the main job role

Limitations in Lack of knowledge Above average Highly

essential skills hinders progress skills skilled

Adaptability/flexibility - ability to cope with changes, multi-skilling in other secondary

roles

Limited to Basic skills - more Above average skills Highly skilled -

present task than 1 task - more than 1 task more than 1 task

Volume of work - how does the amount of work output compare with the job
requirement

Insufficient Occasionally Usually above Consistently

improvement needed unsatisfactory average high output

Quality of work - attention to detail/consistent quality

Quality is Occasional quality Quality good Consistent

significant problem failures seldom a problem high quality

Dependability - how well he/she works according to instructions/job requirements

Requires constant Requires more checks Little supervision Always reliable

supervision and/or and/or job instruction job instruction and gets in with job
job instruction than normal needed without assistance

Attitude to work/teamwork - commitment, motivation, enthusiasm

Uncooperative A few issues with Team worker Very good team worker
lacks motivation teamwork/motivation motivated highly motivated

Communications skills - assumes no medical issues when allowance needs to be made

Does not communicate Some problems Usually good Very good

effectively communicating communicator communicator

Work planning - how well work is planned/time managed

Does not plan Some aspects need Organizes work Displays excellent
effectively improvement well planning ability

Attendance - the number of individual spells of absences - sickness and unauthorized -

(requires care to distinguish between one-off long-term absences and those too that may
related to an employee's disability)

Individual spells of absence

5 plus 3-4 1-2 None

Each unauthorized absences is weighted and multiplied by x3

Timekeeping - measurement of punctuality - individual occasions in last 12-months - an

example

Individual occasions of lateness

5 plus 3-4 1-2 None

21
Safety awareness/housekeeping - awareness and compliance with health, safety and
environmental standards, policies and procedures

Poor housekeeping Sometimes needs A good attitude to High

and/or adherence to reminding of safety safety and workplace motivation
safety standards standards and/or generally clean and tidy towards safety
housekeeping workplace
always clean
and orderly

Supervisory ability (where appropriate) - leadership, organisation, ability to train and

develop staff

Poor leadership Good in some Adequate in all aspects Extremely

direction and aspects and needs good in
organisation improvement in others all aspects

17
 APPENDIX 3: Example absence control measures and caution
APPENDIX
thresholds 3

Average number of days lost per employee

This is a broad measure that reveals the number of days lost on average per employee

Number of employees
-----------------------------------------------------
Number of days of absence

The lost time rate

This is a broad measure and takes no account of whether the absences consist of a small
number of employees who are absent for long periods or whether the absences consist of a
large number of short spells

Number of days of absence

------------------------------------------------------ X 100
Total number of workdays available in year

Frequency rate

This shows the average number of spells of absence per employee as a percentage,
irrespective of the length of each spell

Number of spells of absence

--------------------------------------------------- X 100
Number of employees

Individual frequency rate

This is used to measure the number of employees taking more than one spell of absence

Number of employees taking more than one spell

------------------------------------------------------------------ X100
Number of employees

Example of Company triggers for cautions:

Company one Company two

7 working days 2 spells of absence
in any 12-month in rolling 6 week period or
period on a rolling basis, or

3 periods of absence 14 consecutive days

in any 3 month period in a rolling 6 week period or
on a rolling basis, or

Regular patterns of Regular patterns of

absence (e.g. on absence (e.g. on specific days or events driven)
specific days or events driven)

23

18
 Partners
Institute of Technology for Furniture
and Related Industry
C\ Benjamín Franklin, 13. Parque Tecnológico.
Apdo. nº 50 - 46980 Paterna. (Valencia)
Spain
Tel : 00 34 96 136 60 70
Fax : 00 34 96 136 61 85
vsales@aidima.es
www.aidima.es

BFM
British Furniture Manufacturers Federation
Wycombe House
9 Amersham Hill
High Wycombe
Bucks HP13 6NR
Great Britain
Tel : 00 44 1494 523021,
Fax : 00 44 1494 474270
info@bfm.org.uk
www.bfm.org.uk

EFBWW
European Federation of Building & Wood Workers
Rue Royale 45/3
1000 Brussels
Belgium
Tel : 00 32 2 2271040
Fax : 00 32 2 2198228
info@efbh.be
www.efbww.org

EIAS
European Industry Associations Services
Rue de la Loi 26
1040 Brussels
Belgium
Tel : 00 32 2 2181889
Fax : 00 32 2 2192701
www.eiasnet.com

IFA
French Furniture Manufacturers Federation
28 bis avenue Daumesnil
75012 Paris
France
Tel : 00 33 1 44 68 18 00
Fax : 00 33 1 44 74 37 55
unifa@mobilier.com
www.mobilier.com

MIP
Piazza Leonardo Da Vinci 32
20133 Milan
Italy
Tel : 00 39 0223992804
Fax : 00 39 0223992720
alessio.marchesi@polimi.it
www.polimi.it

UEA
European Furniture Manufacturers Federation
Rue de la Loi 26
1040 Brussels
Belgium
Tel : 00 32 2 2181889
Fax : 00 32 2 2192701
secretariat@uea.be
www.ueanet.com
FURNITURE INDUSTRY IN RESTRUCTURING : SYSTEMS & TOOLS

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Wetstraat 26 rue de la Loi

B-1040 Brussels
Tel. 003222181889
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Article 6 Innovative measures