Furniture manufacturers facing stiff global competition from China and other foreign suppliers are turning to Mississippi State researchers for help in meeting the challenge.
"We're helping an industry re-invent itself," said Steve Taylor, interim director of the university's Franklin Furniture Institute and a seasoned business professional.
Utilizing a new $1.5 million grant from the U.S. Small Business Administration, the institute--named in honor of Houston [Miss.] furniture executive Hassell Franklin--is soliciting proposals from researchers across campus aimed at improving the profitability, efficiency and sustainability of the Mississippi furniture industry.
With 42 research proposals already in hand, Taylor predicts "10 to 20" of the best projects will be selected for funding under the SBA grant early next year.
"A lot of companies are making money, having record years, but the successful ones are creating entirely new business models," said Taylor. "Our outreach program is going to help them and the others re-invent themselves.
"That might include looking at the chemical composition of the paint they use or examining their supply chain from China to Okolona," he added. "We'll look at everything from their strategic business models to their use of the Internet."
In addition to working with established businesses, Taylor said the institute's outreach program also will provide hands-on assistance to emerging furniture-related companies, including those small-niche enterprises that specialize in handmade pieces.
About 200 companies centered in and around Tupelo employ some 25,000 people in a 10-county area of Northeast Mississippi. That accounts for about one-third of the population of the region, the nation's largest producer of upholstered household furniture.
Statewide, the furniture industry generates nearly 50,000 jobs and has a $4.4 billion economic impact on wholesale and retail trade, petroleum and chemicals, financial and real estate, transportation and communication services, and health service sectors.
Furniture industry employment in Mississippi and elsewhere, however, has dropped during the past few years because of increased imports. North Carolina's case goods furniture industry particularly was hard hit by the competition from abroad.
Overseas manufacturers enjoy a competitive edge in some market segments because of the relatively low wages paid to their employees and the U.S. dollar's strong purchasing power overseas. Fuel costs also hinder the delivery of domestic products.
Consequently, China has emerged as the top U.S. competitor. In 1994, Americans imported $10.6 million in upholstered furniture from China; last year, $797 million.
"The industry is trying to adjust to the fact that we're truly in a one-world economy," said Taylor, who succeeded former institute director Liam Leightley last summer.
"The U.S. companies that are making money say that instead of using tariffs to keep the Chinese out, they're going to partner with them and have a mixture of domestic-made and Chinese-made products," he said.
"So now, we're sending components to China, where they assemble those into furniture," Taylor explained. "Then, they send the furniture back to the U.S. and we do the final assembly work here.
"We're beginning to realize we can make money doing that," he continued. "MSU is trying to help the furniture companies here learn how to do that more efficiently and more cost-effectively. The industry isn't dying, but it's changing."
In early 2004, the university opened the Franklin Center for Furniture Manufacturing and Management. The 35,000-square-foot facility houses a comprehensive furniture research, testing and technical assistance program.
"We must respond in a positive and proactive way, and this center can be a huge part of that process," Hassell Franklin said when he joined Mississippi Gov. Haley Barbour and others for the facility's grand opening. "This land-grant institution will raise the bar on lifting forward the furniture industry in Mississippi."
Founder, president and chief executive officer of the Houston-based Franklin Corp., and a 1959 MSU industrial management graduate, Franklin made a $1 million contribution to start the center's construction.
Other MSU units contributing to the research effort include the College of Forest Resources and its Forest and Wildlife Research Center, the colleges of Architecture, Art and Design, Business and Industry, Bagley College of Engineering, and MSU Extension Service.