Resource Library

 The slogan, “I like Ike”, was made popular before my birth.  Thanks to the History Channel and some articles that I have read I like him too.  One of the character traits that I admire about Ike was his foresight.  The Eisenhower interstate system requires that one-mile in every five must be straight.  These straight sections are usable as airstrips in time of war or other emergencies.  Fortunately, we have not had to use our highways for landing strips, as war has not come to our shores.  But, I can think of a few news stories where a corporate jet or prop plane pilot has needed a straight piece of road for an emergency landing.  To those few, this provision made by President Eisenhower was fortuitous indeed.  The plan was strategic, visionary…smart!

In the office furniture business one must be strategic, visionary and smart.  Bill Greytak, CEO and Founder, of Remanufactured Business Furniture (RBF) possess those traits.  One of the most obvious and recent demonstrations of his business acumen was his venture into “emerging markets & globalization.

Glance over any business magazine or the business section of a major newspaper and those words appear again and again.  What is an emerging market and how could globalization apply to a small business segment like office furniture remanufactures?  That’s where the vision-thing comes in handy.

After W.W.II, Western Europe, Japan and the United States powered the world’s economy.  This dominant group, the Group of Seven (G7) included the United States, Japan, Britain, France, Germany, Canada, and Italy.  The economic dominance of the G7 has weakened as we look toward the 21^st Century.  Emerging and developing economies, on a purchasing parity basis, now total 44 percent of the world’s economy, and in the last decade, emerging nations were responsible for two-thirds of the world’s economic growth.  The consumer base in these economies already measures in the hundreds of millions, it is young and the population is growing three times as rapidly as in the developed world.  The “Big Five” emerging markets - China, India, Brazil, Mexico and Indonesia - are among the 12 largest economies in the world, with a combined purchasing power already half that of the G7 nations.

Many consumer good multinationals have been working these emerging markets for some time now.  Some have faired well by going global.  Coca Cola sales are growing at 30%, per year, in China.  Mexico and Brazil are the second and third largest soft-drink markets in the world, each consuming more that Germany, France, and Italy combined.  These emerging markets contribute a stunning 49% of Coca Cola’s operating profits.  Similarly, the Colgate-Palmolive Company receives 45 percent of its revenue from these same markets and nearly half of its operating income.  It is clear that the extreme volatility and unconventional business methods in emerging markets requires different management skills than those we use in the states.  The raging inflation, currency swings, new taxes, continually changing business regulations and interest-rate instability are all part of the normal business day.  People who are unaccustomed to such an environment can lose…big time!

So, what did Bill do?  Did he start importing remanufactured office furniture into The Pacific Rim?  Bring his Enhanced Solutions Steelcase 9000 top cap, over the pond?  NO!  This is where the strategy-thing comes in handy.  He seized an opportunity!  He and his friend, Jerry Dicks, president, Furniture Man, Inc., traveled to the Orient, found quality manufacturers who were small business men, he took them detailed renderings and specifications of the office furniture that he wanted manufactured and thus began The CUSP Family of Products.  When discussing his walk on the global-side Greytak said,  “Granted this has been a slow process, compared to cutting a deal with someone in the states, but, the quality is great, the price is great and the ISO 9000 standard is met!”  He went on, “It probably took a full year before the prototype was where we wanted it to be.  When we first gave them specs for a Traditional desk they made every drawer a storage drawer.  In The East they don’t use hanging files, so they didn’t know to build them that way.  We were fortunate to have a direct contact.  The way we operate keeps costs much lower and we can pass the savings on to our customers.  Our profits can then come from large volume selling as opposed to a higher margin per piece.”

One of the life-style distinctions that Greytak commented on was how the manufacturers often live above their shops.  Most of the independent manufacturers have less than 100 employees and they have their Buddhist Temple on grounds as well.  This “village” concept in manufacturing proves to be a huge asset.  Many small manufactures join forces to work on projects.  They cooperate as friendly competitors, therefore, no one manufacturers is ever hindered by their size.  This is the type of business people Greytak and Dicks sought out.  They report that their manufacturers have the capacity to satisfy any and all demands.  This imported CUSP product line has a full line of traditional wood office furniture and a contemporary line too.  To satisfy demand for laminate desks the RBF-USA furniture line is manufactured in St. Louis at RBF.  There are a variety of laminates available, however, the mahogany has proven to be the most popular.

“You know, we signed up as an Office Furniture USA dealership, thinking that that was our diversification niche.  What we learned during that time period has been good for us. We certainly learned the value of a well-designed, well-managed showroom that is tagged, priced and has the appropriate literature.  But, as far as needing to be an OFUSA dealership – we didn’t.  We asked to be let out of our contract early and they politely conceded – no hard feelings.  “The RBF-USA product line offers 6 sizes of desk, with returns, 4 sizes of credenzas with hutches, bookcases and lateral files,” noted Greytak.  “The CUSP products that RBF imports are metal lateral files, pedestals and binder bins.” Greytak surmised, “We are a remanufacturer and that will always be a core business for us.  When you are a remanufacturer certain items are scarce, like lateral files, pedestals and binder bins – those are the ones that we are importing.”

When asked if business had been soft over the summer Greytak said, “I think our business is a little off – it could be some gains by our competition, we seem to have fewer orders, but, our net revenues are higher than last year.” I rephrased it like this, “Then what you are telling me is, you worked less and made more money?”  “Yes, we did,” said Greytak, “we instituted some internal changes that cut our cost of doing business and so you are right, we made more money off of less business.  We do, however, have plans to increase the amount of work that we are doing, now that our cost cutting measures have been implemented.  Hiring and training sales people is a major focus now.  And new product and service launches will help us gain sales volume.”

Some of the more popular RBF products are their “quick ship” products.  RBF offers a Steelcase 9000 workstation with an enhanced solution top cap to run the cabling through.  This item can be quick-shipped in 10 working days.  There are 3 powder coat colors to choose from, 10 fabrics and 2 laminates.

When asked about staying competitive given the deep discounts offered by OEMs and the new lines that have a lower price point even without a discount – Greytak said, “There is no doubt that these lower priced systems from OEMs are cutting into the value of pre-owned furniture.  We probably turn away 4 or 5 broker calls a week now, even though the product may be good.  The demand has slowed and there is such a glut of product out there that we can buy it directly and save.  We can then pass that savings on to our customers so that we can still be the better buy – over new!”

My final questions were about all this talk of price.  Is that really all there is?  A bidding war?  Greytak concluded, “Price is king!  But, no you can’t just say ‘we are the cheapest, buy here’.  A company must be committed to excellence from the top, to the bottom.  Pleasing the customer is essential.  We have found that our commitment to the customer has had a tremendous impact on our receivables…if people are happy they pay for the service.  Part of that excellence is empowering our staff to solve problems at their root and then rewarding them for doing so.  That’s been our planning strategy and we’ve implemented it – and it works!”

That’s no surprise, because just like Ike always said, “Plans are nothing.  Planning is everything.”