eThewini – What are the new trends in the furniture sector that are being driven by large retailers? How can furniture manufacturers practically unlock these local opportunities?
The eThekwini Furniture Cluster (EFC) recently launched GrowthFinder, an online diagnostic tool that has been developed to unlock growth for companies in the sector.
Paige Sherriff, the Project Manager for the EFC, says the new tool is already proving to be a game-changer. It is enabling Cluster members to formulate growth strategies based on commercial opportunities for localisation as identified by large customers in the sector.
“GrowthFinder has been developed to give companies in the sector a strategic advantage. By providing insight into exactly what furniture retailers want as well as the requirements of various business sectors, the diagnostic enables firms to develop informed strategies that drive profit and growth,” Paige explains.
Numerous independent retailers have provided input into the development of GrowthFinder, providing ongoing feedback and market intelligence for sectors such as hospitality, tourism and construction. This not only makes it robust in data, but applicable to the local furniture context.
“The key insights delivered by GrowthFinder are a unique combination of academic information, empirical evidence and actual on-the-ground experience, giving members access to decades of invaluable market intelligence.
“To add even more value, it also includes product and fabrication demand forecasts from major South African retailers for the next three years,” says Paige.
Traditionally, companies could only access these types of insights through extensive and expensive benchmarking exercises that collate large volumes of often vague market data. GrowthFinder now guides EFC members to informed action by evaluating their growth potential in terms of six growth predictors.
While the growth predictors are the key inputs for GrowthFinder, they are relevant to any sector. Paige says that companies that want to find growth should start by answering the following questions, all of which is supported in the diagnostic:
– Historical Growth
How have your sales and profit grown in recent years? Are you ahead and looking to sustain your position or falling behind and looking to make up ground. This is your starting point and context.
– NexGen Growth Drivers
How are you positioned in relation to global trends and value chain strategies that have driven growth for the best performing firms in your sector globally?
– Market Demand
Are you selling the types of product and offering the service models that the market wants, as indicated by lead firms that make up the majority of demand in your industry?
– Customer Satisfaction
Are your existing customers happy with your performance across a range of criteria and what is their view on your future growth prospects with them?
– Productivity and Operational Excellence
How productive are your capital and labour? How do you perform on a range of operational performance metrics? How does your company’s way of working compare to best practice and is it likely to support your growth, whether that be in terms of higher sales, lower costs and/or greater profits?
– Green Manufacturing
What is your firm’s carbon footprint? Are you instituting environmental sustainability practices that are likely to position you as a credible and verifiable Green Manufacturer?
“To grow a business’s profit requires an understanding of the market needs and an honest assessment of the company’s performance relative to those needs and its competition. By diagnosing the opportunity and developing committed action in pursuit of these opportunities, it is possible to develop strategies that will deliver growth,” says Paige.
This information is readily available to EFC members through GrowthFinder. Paige says that while the programme has just been launched, it is already proving to be a critical tool to the EFC’s members that have enrolled to use the diagnostic.
“GrowthFinder is valued at over R20 000 per report and can be accessed by non-members to assist with their company’s growth. Use of this programme is however an excellent reason to join the EFC as members receive one report per annum as part of their membership,” Paige says.
The EFC is an industry-led industrial development initiative focussed on improving the competitiveness of furniture manufacturers and value chains in KwaZulu-Natal. It does this through a mechanism called clustering which brings together various industry stakeholders – from retail, manufacturing and public sector to coordinate targets and initiatives in a way which benefits the local industry.
The Cluster places a strong emphasis on shared learnings between members in its programmes, thereby creating collective efficiencies and impact multiplication that cannot be achieved with the same resources in isolated projects.
The EFC was launched in 2018, with the seed funding from the eThekwini Municipality Sector programmes unit consisting of zero members and a Board of 4 micro enterprise business owners.
“Today we have 10 members which collectively employ over 400 staff, represented by SMMEs and larger manufacturing firms. We have also formed strong relationships with large South African independent retail with the likes of @home and Mr Price Home who have supported us in our sector Intelligence research and development of our Growth Finder diagnostic tool recently launched. We are also partnered with the African Institute of Interior Design Professions (IID) who have supported us to link manufacturers with interior designers across the country,” says Paige.
One-on-one member support
The unprecedented global Covid-19 pandemic completely disrupted the EFC cluster support programmes and necessitated a rapid pivot to sector support with regards to Covid-19 risk identification and mitigation.
“Together with members and the Executive Committee, the cluster developed a response programme comprising of fortnightly working groups (Directors and Executives meet weekly to collectively tackle risks associated with Covid-19.), one-on-one member support (Firms receive support in implementing and tracking their risk mitigation progress.) and thought leadership (We bring together thought leaders to help understand critical issues facing industry during this crisis) content development (Firms are provided with relevant information, data and tools to manage cash flow, supply chain, human resource, health, safety and operations risk), Paige says.
And the future dreams?
“To grow our impact and reach. Right now there is only a small handful of firms leveraging the Cluster. We want to spread the word that this support exists and in doing so not just develop business, but in growing the industry, be able to support and improve the livelihoods of those that they employ,” says Paige.