By making flatpacks, joiners can profitably utilise the spare capacity that commonly becomes available with the greatly increased efficiency of screen-to-machine software and nested based manufacturing.
“Flatpacks are one of the simplest solutions to the wonderful problem of rising productivity,” says Planit Australia sales director John Whinnen.
“Many cabinet makers have already provided a flatpack service at one stage or another, so making the decision to embrace them is simply capitalising on a market that these people already know exists.
“Manufacturing of flatpacks doesn’t require any further investment in time, capital or training. It simply utilises the key strengths and skills that most cabinet makers already have.”
Tight labour situationMr Whinnen points out that less factory labour is needed to make flatpacks, which is an advantage in the current job situation where skilled workers are hard to find.
Matthew Sheppard, managing director of Virtual Joinery, Somersby NSW, has found that making flatpacks is a way of increasing his business turnover without additional labour at a time when sourcing experienced help is difficult.
His company supplies flatpacks to trade customers, who want anything from basic machining of a single component to complete assembled kitchens.
“Some of our customers who do their figures find it a lot more beneficial to outsource their manufacturing to us and simply focus on marketing. This also works well for companies like ours who have already invested in production,” he says.
According to John Whinnen, some manufacturers make the decision right from the start to specialise in flatpacks as their core business.
Others discover the opportunities opened up by rising productivity after implementing broad-functionality software such as Planit’s Cabinet Vision in conjunction with nested based manufacturing.
“These manufacturers find they can produce everything in a third of the time they did before, with less staff – and still have the ability to make more,” he says.
“They want to utilise this higher productivity and discover that manufacturing flatpacks is one of the easiest and most obvious ways of putting the additional capacity to work.”
Fast production timesA further benefit of flatpacking is a quick turnaround of work. The time between taking an order and delivering the flatpack to the customer is normally very small.
Paul Mizzi, director of Kesko Cut to Size, says his company has been cutting flatpacks since 2006, supplying hundreds of regular clients from cabinet makers through to large-scale shop fitters, dealing only with the trade.
“It’s cost effective for our customers to outsource their cutting to us. A lot are still using panel saws, which makes them uncompetitive with those who have invested in software and CNC manufacturing.
“By the time they’ve prepared a cut list, we could have already cut it out for them,” he says.
Manufacturing flatpacks also gives companies the chance to operate lean and mean, with few or no assemblers, a skeleton sales force and without the need for an elaborate shopfront and marketing campaigns.
Less marketing, fewer headachesDealing with the trade only means an established client list and a predictable workflow, rather than an endless hunt for single-job customers.
Flatpack makers find that when selling to the trade, the communication difficulties that are often associated with dealing with the public do not exist.
Kesko Cut to Size makes 25-30 flatpack kitchens a week and finds that not having to deal with end users relieves the staff from the chore of going on site, measuring and quoting.
“Most customers submit their own designs, which means that we don’t have to design either,” Mr Mizzi says. “The average kitchen takes us just three hours to program and cut.”
The Victoria-based company gets by with a programmer, a sales rep, and two operators on the factory floor.
SK Flatpack Kitchens has also found that specialising in flatpacks for the trade means fewer headaches than dealing with end users, as the work remains on a familiar trade basis.
The Chipping Norton-based company in Western Sydney, which has been supplying flatpacks solely to the trade for five years now, delivers kitchen components to the customer’s sizes and specifications, without the need for the customer to even supply a cutting list.
The company also delivers fully-assembled kitchens.
Volume and profitabilityGood profits for flatpack manufacturers depend on a high volume of work, because margins are normally smaller than with fully-built and installed cabinetry.
Mr Sheppard of Virtual Joinery says that the move to flatpack manufacturing has actually boosted the profitability of his company, despite the tight margins.
Virtual Joinery made the investment in plant and software five years ago and has been able to maintain the volume of work. The success of its flatpack strategy means the company is now ready for the next investment – a fully automatic loading router with nesting, plus a new edge bander.
OpportunitiesWhile some flatpack producers prefer to deal only with the trade, for others dealing with end-user customers is a source of endless opportunity – especially if customers can be found over the internet.
Servicing end users has worked well for Smartpack, which has a factory in Smithfield in Sydney’s west as well as three showrooms, plus extensive distributor and reseller agreements.
Besides these retail channels, Smartpack sells directly to end users from the company website. It also supplies flatpacks to some trade buyers, such as wardrobe and partition manufacturers, and to cabinet makers without manufacturing facilities – but never to competitors.
Michael Caminer, director of Smartpack, says his company had been making assemble-it-yourself flatpacks since 1985 and was among the first in the industry.
“Right from the start we did flatpacks, never completed cabinets. Our products compete in the mid-range, don’t look cheap and nasty, and can stand up to any Harvey Norman or similar kitchen,” he says.
The company has come a long way since its founding, with the capacity to win and supply large orders such as the recent finishing off of the Australian Embassy in Tokyo. This comprised kitchens, laundries and wardrobes for the residential compound of 43 apartments, all supplied from Sydney by flatpack.
While the flatpack industry is undoubtedly competitive, there are suggestions that the biggest challenge is offshore rather than from local rivals.
For Mr Mizzi of Kesko, the biggest threat comes from cheap Chinese flatpack imports that don’t deliver quality.
“They’re riddled with problems. You don’t know what you’re getting when you open the kit pack. The standard of the substrate is zero and often has a high level of formaldehyde present. And if the kitchen doesn’t fit, where does the customer go for help?” he says.
In conclusionFlatpack manufacturing offers plenty of benefits, including:
- high productivity, due to better machine and software utilisation
- increased profits if the volumes are there
- dealing with trade customers only
- reducing the impact of a tight labour market.
“Your manufacturing methods need to be simple and foolproof,” says John Whinnen of Planit. “Make sure your systems are all in place and that your processes test out, so that minimal mistakes are handed on to the end user.”
He also suggests continuing to offer an assembly and installation service for those buyers who change their mind during the manufacturing process.
Return to newsletter