Sherbourne Consulting

Case Study Sourcing Furniture in China

Sherbourne Consulting specialises in generating business development and procurement strategies for companies in the furniture and bedding sector. We have in-depth knowledge of these markets in China and Southeast Asia.

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Case Study Summary

Our client was a major manufacturer of sofas with production in the United Kingdom. The company was feeling the impact of lower-cost imports — despite already having taken a number of steps to reduce costs by sourcing specific elements of their products offshore.

  • A decision had been made by the board to source a complementary line of leather sofas. These could be positioned at a lower price point — without undermining the companies well-established brand identity and values.
  • Using our proven methodology, an intensive screening process was undertaken under demanding time constraints. We identified a shortlist of factories in China that could be visited to coincide with a major furniture fair in Shanghai.
  • We were able to select two vendors for detailed negotiations. Sample sofas were successfully delivered in time for a critical launch exhibition in the UK.
Photograph of Jeremy Waller, China consultant

For enquiries, please contact: Mr. Jeremy Waller
Furniture Sourcing Expert
+44 (0)1789 731 803
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Sherbourne Consulting has extensive experience in the Asian market — with specialist consultants in the UK and China. Our team has worked at senior management levels for major furniture, bedding and carpet businesses in Asia, and have an established network of contacts and partners.

Please contact us to receive any further information, or arrange an appointment.


Client Background — UK Market Leader

Our client was a major manufacturer of sofas with a strong brand identity and a heritage of quality production. They had an enviable position in the UK market, with modern manufacturing premises and a strong distribution network.

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However, our client’s loyal distribution network was increasingly aware of competition at the cheaper end of the market. The impact was being felt in retailersʼ expectations regarding pricing and margins.

In particular, the leather sofa market is subject to increasing competition from overseas (the number of SKUs is far less than for upholstered sofas), and is dominated by a few major high-street outlets.

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“Cheap low-cost country imports impact on consumer price perception across the whole market, threatening margins on even top-range lines. Furniture manufacturers need to have strategies in place to manage this competition and importing components or a limited selection of quality-approved furniture from LCCs can make a critical difference.” Graham Barker, Sherbourne Consulting

Imports of furniture into the UK were £4.3 billion in 2011, with 32% from China. These lower-cost imports impact on margins across the furniture market. Manufacturers must adjust and re-think long-term business strategies in order to remain competitive.


Task & Project Challenges

The higher end of the market had inevitably begun to feel the cost pressure. As a result, our client decided to research the potential for importing a selected range of sofas to complement their existing UK-made range.

This would enable the company to offer a line of well-designed and substantially-engineered products. These could be priced more aggressively to meet their distribution channelʼs needs for a product at lower price points.

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Selective About Vendors

The client wanted to identify appropriate vendors who could become strategic partners. They would have to meet the exacting needs of the client — in terms of build construction, adherence to design criteria, and workmanship (all set out in clear specifications).

Our objective was to deliver at least two companies that could satisfy the clientʼs supply chain objectives and produce samples for evaluation in time for a critical UK trade show.

From previous experience, we knew that there would be hundreds of potential Asian factories of various sizes and capacities. Yet the project required rapid results with imported products ready for display in the UK within four months of the initial briefing.


Our Tailored Approach

A thorough evaluation of major players, primarily in China, was carried out. Attendance at a major furniture show in Shanghai helped identify potential partners.

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Through intensive desk research and use of our established network, we identified around 100 potential vendors, primarily in China. Application of selection criteria (agreed with the client) led to a shortlist that was to be refined after visiting China.

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“Working with Jeremy and Graham ensured that we moved from the trade show in China directly to targeted factory visits. This was critical to the achievement of a successful, on-time launch in the UK.” — Client Design Director

Our sourcing consultants attended the Shanghai fair with a team of senior managers from the client company. This enabled our client to view a range of products in one location which facilitated decision making and final shortlisting for the planned factory visits.

Appointments were then made to visit 10 factories in north and south China by splitting the team into two groups.

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After the visits, two vendors that met the requirements were identified. Our consultants developed a negotiation strategy based on proven techniques in China which resulted in the selected products appearing at the UK launch on time.


Results — Product Launch on Time

Our clientʼs existing workload on other projects was unaffected, as our consultants worked independently, reporting regularly on progress and contacts generated via regular review meetings.

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We presented our client to each vendor as a major player in the UK market, thus gaining strong awareness in the supply chain as a potential client. This strengthened our clients bargaining position as a relatively new entrant to the Chinese industry.

“For an imported, finished product, it was essential that the workmanship met our design and quality criteria exactly. The consultants worked at lightning speed to meet a very tight deadline. We are very happy with the partners that were found with their help.” — Client Chief Executive

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Significant data was generated over and above the brief of the project: on the dynamics of the industry and global trends in the sector. One example was on technical standards and the huge variances which exist between similar looking factories.

In summary, we were able to work closely with the client to deliver a supplier base that met their needs. The processes we use were logical, proven and measurable. The results were rapid and on target — upholding the brand equity of the client.


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