Herman Miller

Topics: Profit margin, Lean manufacturing, Value Pages: 4 (1138 words) Published: November 3, 2011
1. Describe Herman Miller’s strategy. Is there evidence it has produced a competitive advantage and good financial performance? Explain. They focus on a growth strategy, through innovative products and production processes. Reinvention and renewal. They survived the Great Depression and multiple recessions, recovered from the dot-com bust and were able to continue expanding overseas. They adapted to save the company, by introducing new designs. In 1996, Herman Miller began an aggressive drive to reinvent its operations and established a fruitful relationship with the Toyota Supplier Support Center. Unique to the office furniture industry, the relationship enabled the company to adopt and implement world-class, lean manufacturing processes based on the Toyota Production System principles. Through the Herman Miller Production System (HMPS), the company dramatically reduced manufacturing square footage and inventories, cut lead times for standard product from 8 weeks to as little as 10 days, and significantly grew sales and profitability. Another component of the HMPS lean initiative focuses on the company’s people and their development, complementing Herman Miller’s long history of employee participation. Herman Miller believes its success in achieving operational excellence depends on the motivation and thinking of its people to solve problems and drive improvement. -They focus more on high quality products that is why they were not dramatically hit by competition from overseas, also because they were already in some of these markets. They’re manufacturing strategy limited fixed production costs by outsourcing component parts from strategic suppliers, which increased variable nature of its cost structure, which is their competitive advantage, which is reflected in their financial performance, from 2006-2010 their gross profit margin remained relatively constant. Top to bottom it works/ demonstrate their business in their own office. All...
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