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HIGH POINT — With freight and supply issues both showing no signs of easing over the coming months, many companies in the furniture industry are looking for a way to get back some control over their supply chains.
One of those ways was to set up production closer to home, and one country that seemed to fit the bill best was Mexico.
Furniture Today talked with four companies — two that have been established in Mexico for some time and two relatively new to sourcing in that country — about the challenges of setting up production in Mexico, as well as advantages, shortcomings and advice they’d give other companies hoping to set up there.
High-end maker Marge Carson has been manufacturing in Mexico for 25 years. Around 95% of its product is made in Mexico in the Tijuana area, with the other 5% coming from Los Angeles.
“We’ve hardly had any issues with supply,” President Jim LaBarge told Furniture Today. “It’s all about price, and costs are advantageous in Mexico.”
LaBarge says his lead times are eight to 14 weeks, depending on items. The only supply issues he’s seen are some delays in getting fabrics and nailheads.
His advice to a company hoping to set up shop? Get a shelter company involved.
“A shelter company helps you navigate three silos of Mexican law: employees, finance and import/export,” he said. “Especially imports. Things can get held up on labels for example. You need to know material contents. That’s where the shelter company helps.”
LaBarge doesn’t seem worried about an influx of furniture makers. “As more people move down there, more resources will become available. Upholstery is easier for us right now as it’s harder to find factories capable of doing case goods, occasional and dining. But I’m working on it. That’s the goal.”
And Marge Carson has no plans to leave Mexico.
“I can’t see us getting involved in the complexities of other countries at this point,” LaBarge said.
Jonathan Bass has been producing furniture under the Whom Home and Innova brands in Mexico since 2011. He urges American companies to start slow.
“When everybody moved to China, it left a really bad taste in Mexican companies’ mouths,” he said. “They’re hesitant. They’re afraid to give up current production and customers. So it’s going to take time, and you’ve got to build slow.
Another challenge is the difference in mindset and culture. “People aren’t numbers in a machine like they are in China,” said Bass. “They are people with families. The mindset is way different” in Mexico.
“It’s not about finding a lot of factories,” he said. “You’ll be much better off investing into fewer factories vs. spreading potential risk all over. Find that one partner who will get behind your business.”
Bass believes, at some point, furniture production in Mexico will hit a cap.
“You’re going to hear horror stories and success,” he said. “I don’t believe all this product can go from Vietnam to Mexico. There’s not enough wood or raw materials. Too much to source. The market will have to be prepared.”
New to Mexico
Solid wood specialist A-America is a new arrival to Mexico, having unveiled its first bedroom collections sourced from the country at the recent Las Vegas Market.
“We had concerns,” said President Christian Rohrbach. “Lots of people didn’t succeed in decades past. But we went with an open mind, and it turned out better than we thought.”
Rohrbach is uncertain what the future may hold in the region, but with all the freight and supply issues, A-America plans to remain diversified in its sourcing.
“Once Asia comes back online, I’m not sure if companies will remain in Mexico,” he said. “Our plan is to incrementally grow there but remain diverse. Asia’s still our main spot, but we want to have eggs in multiple baskets. You never know if a virus or a war will come and wipe out part of the supply chain.”
A-America’s biggest challenge so far has been freight and labor.
“We thought domestic freight would be easy,” Rohrbach said. “Nope. We see a lack of trucking, drivers, and a shortage of everything. It definitely is cheaper than overseas, but it isn’t a big advantage.”
Traditionally sourcing out of China and Vietnam, New Classic is also a newcomer to sourcing in Mexico. The company introduced two new bedroom collections at Las Vegas Market. Both ship within 30 days.
“Production in Mexico has been a big help in terms of quicker delivery and production allowing customers to truly forecast out their needs with a reliable time frame for delivery,” said Scott Hill, president of sales and marketing.
New Classic sources out of multiple facilities in different cities in Mexico. Finding those factories was key, says Hill.
“The biggest challenge in getting set up in Mexico is finding reliable factories that have state-of-the-art equipment and are able to handle the amount of business we were offering them,” said Hill. “There were a lot of smaller facilities, but they couldn’t handle the capacity we needed to take care of our customers and our warehouses.”
Hill says New Classic plans to stay in Mexico but also to diversify its sourcing even further.
“I don’t see any reason not to stay in Mexico for the foreseeable future as Asia continues to be in flux and freight continuing to be questionable at best,” he said. “We have already started sourcing other countries over the past year with product coming in from multiple countries in Europe.”
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