Productivity trends in kitchen cabinet manufacturing Essay

Output per employee hour in the manufacture of wood kitchencabinets rose at an average annual rate of 2.1 percent between 1972 and1982, or at virtually the same pace as for all manufacturing (2.0percent). However, annualized increases in both output and employeehours were greater for the industry (4.7 percent and 2.5 percent) thanfor total manufacturing (1.

4 percent and — 0.5 percent). Factors underlying the 10-year productivity advance in the makingof kitchen cabinets include improvements in woodworking machinery andparticleboard processing equipment; faster drying glues and coatingmaterials; and more mechanized transfer apparatus. Capital expendituresincreased strongly during the latter half of the seventies, althoughthey subsequently tapered through the early eighties. The productivity trend in the industry was market by two distinctphases, which paralleled developments in all manufacturing. Between1972 and 1979 (the industry’s output peak for the period examinedhere), productivity rose strongly, reflecting fast-paced output gains.But over the 1979-82 period, which was marked by recession and a deepslump in residential construction, the trend reversed direction, withoutput declining at an even faster rate than employee hours: Manufacturing generally experienced a slowdown in its productivityrate between 1979 and 1982, rather than a reversal; but the trends inoutput and employee hours were downward, as in kitchen cabinetmanufacturing. Year-to-year changes in the industry’s productivity were quitevolatile, ranging from an increase of 23 percent in 1977 to a decline of11 percent in 1982.

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In 5 of the 10 years after 1972, productivity rose;in the other 5, it fell. However, in 2 of the years of risingproductivity, the increase was attributable to a more rapid decline inemployee hours than in output. And in 3 of the years of decliningproductivity, both output and employee hours increased, but the lattergrew faster than the former. These patterns contrast with theexperience of durable manufacturing industries generally, whichevidenced a much nattower range of year-to-year fluctuations inproductivity during the review period ( – 3 percent in 1974 to 4 percentin 1981). The volatility of productivity movements in kitchen cabinetmanufacturing stems largely from the industry’s close link to thehighly cyclical demand for residential housing.

Output and demand factors The kitchen cabinet industry manufactures stock line and customcabinets, as well as bathroom vanities. Stock line cabinets, whichaccount for about one-half of industry output, are mass produced, andare distributed to residential building contractors. Custom cabinetsrepresent roughly one-third of output and, while the cabinets are builtto customer specifications, large-scale production is often feasiblewith the application of flexible manufacturing technologies. Banitiesmake up the remaining one-sixth of outpup. Most kitchen cabinets andvanities are made of wood; those made of plastics accounted for 14percent of output in 1982 (up from 11 percent in 1977).

The manufactureof metal cabinets, which were once a large proportion of total kitchencabinet production, is no longer a significant industry activity. Industry output is closely linked with residential construction,replacement, and rehabilitation markets. Among these markets, newresidential housing starts provide an estimated one-fourth of theindustry’s major outlets. Over the study period, such startstended to decline from the high set in 1972, although there weresecondary peaks in the late seventies. Housing starts subsequentlyplummeted, however, so that by 1982 levels were nearly two-fifths belowthose recorded in 1979. Throughout most of the review period, replacement and remodeling activity, spurred in large part by high rates of sales of existinghomes, tended to offset the impact of declining housing starts on theoutput of cabinets and vanities.

Existing-home sales rose at anaverage annual rate of 10 percent between 1972 and 1979, then fell bynearly 20 percent per year to 1982. Constant-dollar outlays for majorreplacements–30 to 40 percent of which are for newly installed kitchencabinets–rose 4.9 percent per year over the earlier period, thendropped by 1.7 percent annually.

Remodeling outlays, a signigicantproportion of which likewise are devoted to new kitchens and bathroomsand their furnishings, also rose, then declined, although at moremoderate rates than major replacement spending. Most remodeling andreplacement work is performed on older structures, which are more likelyto need redesigned kitchens and enhanced storage space. (In 1982,four-fifths of replacement and remodeling expenditures were made forresidential structures built prior to 1970, and more than half onstructures built prior to 1960.

) However, the number of cabinets perkitchen–estimated to average 12 in new single-family homes in 1983, and15 in remodeled homes–is not believed to have changed much over thepast 10 to 20 years, although a rising proportion of single-family homesfeature two or more bathrooms, hence requiring additional vanities. The comparative strength of remodeling and replacement demandresulted in a considerably higher rate of production of custom than ofstock line cabinets. Between 1972 and 1979, production of the formerrose by nearly 8 percent a year, of the latter by only about 4 percent ayear. Output of vanities paced that of custom cabinets.

After 1979,however, output of both custom and stock line cabinets slumped, whileproduction of vanities declined moderately. Employment, hours, and occupational mix Employment in kitchen cabinet manufacturing, currently numbering58,000 persons, rose strongly–by 42 percent–between 1972 and 1979. By1982, however, employment had fallen 22 percent. The expansion andsubsequent decline in the industry’s employment contrasts with themore moderate pattern of employment trends for manufacturing as a whole,as indicated by annualized percent changes for the two subperiods: The number of production workers in the industry rose at only aboutthree-fifths of the rate for nonproduction workers over the reviewperiod (2.5 percent per year versus 4.

0 percent). In 1979, productionworker employment stood 44 percent above 1972 levels, but then plummeted28 percent by 1982. By contrast, nonproduction worker employmentincreased steadily, so that by 1982 it was nearly half again as large as10 years earlier, and the proportion of nonproduction workers in totalemployment had expanded from 17 percent to 22 percent.

Reasons for therising proportion of nonproduction workers include the hiring of largersales and distribution staffs, and increases in the number oftechnicians. Average weekly hours in the industry exceeded 38.0 hours in only 4years between 1972 and 1982. They usually ran about 94 percent of themanufacturing average. Industry sources believe that the lower averageworkweek arises mainly from the workweek practices of the smaller customcabinet establishments. Industry overtime hours fell to 70 percent ofthe all-manufacturing average after 1973, and dropped to less than 60percent in years of declining output. Even in years of strong outputgrowth, neither average weekly hours nor overtime approached themanufacturing average. By comparison with all of manufacturing, then,the industry evidently preferred to hire rather than lengthen work hoursduring periods of increasing demand for its products, and to reduce itswork force rather than work hours when demand declined.

Hourly wages of production workers in the industry averaged 17percent below the comparable manufacturing figure for the review period.Also, they tended to decline relative to the manufacturing average overtime, so that they lagged by 21 percent in the last few years of theperiod. The industry’s lower average hourly wage is probably areflection of the large proportion of semiskilled workers it employs.

That this is, in fact, the case is suggested by data on theindustry’s occupational mix, which is weighted much more towardoperative and laborer (that is, unskilled) positions than is employmentin manufacturing generally. (These data apply to the group ofwoodworking industries of which kitchen cabinet manufacturing representsabout one-quarter of the employment. But because the woodworkingindustries group as a whole uses similar production technologies andserves similar markets, differences in occupational composition amongindustries within the group are likely to be minor.) Of thegroup’s total 1983 work force, 81 percent were blue-collar workers,compared with 69 percent for all manufacturing. Most of the differencewas linked to the high proportion of workers classed as laborers in thewoodworking group (17 percent versus 9 percent for manufacturing). Arelatively large number of laborers in the woodworking industries areengaged in such tasks as loading and unloading production machinery,handling of stock, and as helpers–tasks which tend to be mechanized inother manufacturing industries. The proportion of operatives employed in the woodworking industriesgroup is slightly higher than in all manufacturing (42 percent versus 40percent). Here, the difference stems chiefly from the greater relativeimportance of assemblers, sawyers, edgers, and other workers inoccupations typical for woodworking.

The group also employs amarginally greater relative number of craft and related workers thanmanufacturing generally. White-collar workers, however, play acomparatively lesser role in the woodworking group, despite the increasein the share of nonproduction workers in kitchen cabinet manufacturingemployment noted earlier. In 1982, white-collar workers represented 19percent of employment in the group, as against 31 percent for allmanufacturing. Much of this difference reflects the much smallerproportion of professional and technical workers in the woodworkinggroup than in general manufacturing (3 percent versus 10 percent). Theshare of clerical workers in the group (8 percent) also wassignificantly smaller than in all manufacturing (12 percent). Technology The manufacture of wood kitchen cabinets and vanities entails thesawing, shaping, planing, and sanding of hardwood components (less oftensoftwood, hardwood plywood, and hardwood veneer components), most oftenused for the facing of the final product or drawers, and ofparticleboard (or fiberboard), which usually constitutes the”box” or interior of the cabinet. After the components areimprinted with ink by means of cylindrical presses and hardware isaffixed, cabinets are assembled by stapling and gluing. Larger firmsmay locate the fabricating plant close to lumber supply areas, andperform assembly and other nonfabricating operations in separateestablishments from which markets may be readily served.

Kitchen cabinet manufacturers use the same basic woodworkingtechnologies employed in millwork generally. (Prior to 1972, theindustry was defined as a subset of millwork for purposes of Federalstatistical studies.) The specialization and large-scale operationsthat came to characterize the stock line segement of the cabinetindustry, and to a lesser extent its custom segments, did not fullydevelop until the 1950’s. Kitchen design then shifted away frommetal cabinets, partly because of certain disadvantages associated withuse of the latter; and distributor networks enabling nationwidedistribution sprang up. As in millwork generally, large-scaleproduction of kitchen cabinets and vanities was to some extent promotedby the introduction of synthetic resin adhesives, which yield aquick-curing bond.

Kitchen cabinet and vanity manufacturing is highly mechanized: allwork that transforms the lumber and processes the shaped components andparticleboard is done by machines or mechanically driven devices (suchas inking cylinders). Especially in the stock line segment of theindustry, transfer of stock has been increasingly conveyorized, ratherthan being performed by material handling equipment or manually.Conveyorization has in turn been made possible by the economies of scaleof mass production, and also by advances in technology, such as thosethat permit the rapid application and curing of inks and glue. First in the sequence of the industry’s manufacturingoperations is the treatment of the rough lumber. The lumber isdelivered in uniformly sized sheets to predrying facilities.

Predryingfacilities began to be installed by the industry during the latesixties. They are designed to reduce the drying process from 5months–if the lumber were to be left to dry in the open air–to 1 month(more or less, depending upon the species of wood). Predrying generallyshrinks the lumber’s moisture content by about 70 percent; it hasthe additional advantage of preventing the quality degradationcharacteristic of lengthier drying processes. The lumber is thentransferred to kilns, usually for a 15-day period, so as to furtherreduce moisture content. The machinery used in kitchen cabinet manufacturing reflectswoodworking technologies that have been applied for many decades.However, a large proportion of such machinery appears to becomparatively new, and thus features the many minor innovations andmodifications that cumulatively enhance the productivity ofmanufacturers’ capital stock.

According to a 1979 survey conductedby Woodworking and Furniture Digest, much of the existing woodworkingand other equipment used in kitchen cabinet manufacturing establishmentswas less than a decade old. For example, one-half of all sawing andprofiling machinery was 10 years old or less, as were two-thirds of alldado, grooving, planing, and mitering machines. Most types of sandingmachines were likewise of comparatively recent vintage. Well overfour-fifths of edge banding machines employing hot-melt adhesives hadbeen installed within the previous 10 years. Where the proportion ofequipment 10 years old or less fell below 50 percent–as in the case ofmanually operated shapers, certain kinds of lathes, carving machines,tenoners, and sanders–it was preponderantly between 10 and 20 yearsold.

Of innovations to the production processes of the industry only afew examples can be given here. Defects in the lumber used inmanufacturing kitchen cabinets were formerly spotted by a worker’strained eye and had to be laboriously removed with hand tools. Now, anelectronic device “finds” the defect, and programs the cut soas to isolate and eliminate the defect. Labor requirements as well asmaterial waste are thus considerably reduced. Cutting heads of shapers, as well as saw blades, have beentoughened by tungsten carbide, reducing time spent in removing andsharpening such devices. Particleboard pieces of similar thickness cannow simultaneously be sawed to varying dimensions (as specified bydifferent customers) by programming a computer, which generates amachine-readable tape that informs the sawing machinery of the cuts tobe made and their sequence. The computer also generates a tape that canbe read by the machine operator, so that he or she may check and followthe cutting operations, and override when necessary. Such lumping ofsmall orders for processing of particleboard without manual resetting ofmachinery has raised output per unit of labor input in someestablishments by three to five times.

Secondary sanding operations, traditionally performed by hand, havebeen disappearing gradually; the use of multi-functional sanderattachments, which reduce or eliminate the relatively high laborrequirements associated with hand sanding, is becoming more prevalent.Automatic thickness settings permit a wide range of bites, down tofinest surface polish. In addition, air-operated hand-held polishingapparatus has been developed that also dispenses with secondary sanding,and prevents swirl patterns by means of its so-called random orbitaction. A shift away from electrically powered tools to air-operatedhand tools is widely believed to have improved operator efficiency.

Air-powered tools are lighter and less fatiquing to operate, and offer awider choice of such options as handles and styles adaptable to operatorpreferences. Adhesives and the means of applying them have likewise beenimproved. High-speed production and assembly requires rapid curing, andgluing has become an integral part of the production process in thelarger, mass-producing establishments. However, stapling has not yetbeen eliminated in kitchen cabinet and vanity assembly, where itsupplements gluing in the fastening of parts.

Gluing, like stapling isperformed by hand-held power tools. Such tools have been redesigned soas to minimize operator fatigue, and technically improved for ease andspeed of operation: for example, screw-in cartridges now permit quickreplacement of the glue-dispensing head. Processing of particleboard gained considerably inefficiency duringthe review period with the introduction of synthetic precision coaters,which ensuure that the board is free of voids or craters, and ofultraviolet light as a device for rapidly curing such coaters.

Fast curing is, of course, indispensable in the mass production ofthe cabinet box (which, as noted, consists of particleboard). The boardis also run through a wood grain printer consisting of chrome cylindersengraved with the desired grain pattern, and is imprinted with thepattern by means of inks that dry almost immediately when the board hasbeen run through an oven. Prior to the introduction of these processes,the cabinet box was left unfinished, meaning that more expensiveparticleboard had to be used. Despite the expense of capital investmentin the new process, costs of fabricating the box have declined, whilethe final product has become more attractive. Capital investment Expenditures for plant and equipment by kitchen cabinetmanufacturers paralleled output trends over the review period. Capitalexpenditures by the industry, in constant dollars, rose at an averageannual rate of nearly 7 percent between 1972 and 1979, then declined ata rate of 17 percent per year to 1982. The industry’s capitalspending varied from year to year in line with its output, althoughfluctuations in spending were far greater than those in production.Thus, in 1977, capital spending soared 51 percent compared with 47percent for output, while in 1980, it plummeted 44 percent (always interms of price-adjusted dollars) as against a 7-percent output drop.

Average annual percentage changes in capital spending for the industrydiffer markedly from similar estimates for all manufacturing: In terms of current dollars, assests per worker in the kitchencabinet manufacturing industry have risen less than in totalmanufacturing. According to Bureau of the Census data assets per workerin the industry increased 42 percent during the review period, comparedwith 76 percent for all manufacturing. The industry used considerablyless capital per worker than manufacturing generally throughout theperiod, and in recent years, its capital intensity actually declined.Until the mid-1970’s, assets per worker in the industry averaged 34percent of the comparable figure for manufacturing, thereafter droppingto an estimated 26 percent.

The decline to some extent reflected adecrease in the value of structures (that is, plant) relative to theindustry’s gross asset value–from about two-fifths in the earlierpart of the period to one-third in the later years. The industry thustended to place relatively more emphasis on installing new equipmentthan on constructing new plants. Structure of the industry The number of establishments in kitchen cabinet manufacturing rose65 percent between 1972 and 1982. Most of the growth occurred before1978, but despite slackening output in subsequent years, the numberclimbed by an aditional 15 percent by 1982.

The increase centered oncustom cabinet fabricators rather than stock line firms, attesting tothe strength of demand for replacement and remodeling of kitchencabinets and vanities. It is possible that the rapid rise in the numberof custom cabinetmaking firms contributed to the productivity slowdownin the industry in the more recent years of the review period.Virtually all the employment increase in the industry during theseventies occurred among custom cabinet and vanity fabricators ratherthan among stock line establishment. The great majority of industry establishments are small firmsemploying fewer than 20 workers. In 1977, four-fifths of allestablishments classified in the industry accounted for but one-fifth oftotal employment. Three percent of all establishments employing 100workers or more accounted for 40 percent of all workers.

Changes overtime in the distribution of establishments by employment size weresmall. Concentration ratios shifted upward for stock linemanufacturers, with the eight largest firms accounting for 71 percent ofthe value of shipments in 1977, as against 49 percent in 1972. Theupward shift was less pronounced for custom fabricators (25 percent in1977 versus 22 percent in 1972.

) Outlook Swings in residential construction, and high interest rates (ifthey persist), are likely to retard short- or medium-term productivityimprovements in kitchen cabinet manufacturing, because they tend todepress capacity utilization and capital investment. Nevertheless, theexperience over the 1972-82 period suggests that, over the long term,productivity should continue to advance. Productivity gains are alsoforeshadowed by continued diffusion of innovations, at least in thelarge establishments. Automated systems are likely to be adopted more widely in theindustry as costs of numerical controls decline. The precision of cutsmade by such woodworking machinery as saws, shapers, and planers islikely to be controlled much more readily by the use of microcomputers,which would reduce setup time and waste, and improve product quality.The application of coating also appears likely to become increasinglycomputerized: In a new type of technology, an electronic eye determinesthe dimensions of the wood component to which the coating is applied,relaying the information to a computer that operates revolving sprayheads.

These spray heads turn on and off as programmed. Changes in thecolor of the coating do not require significant downtime. The chemicalcharacteristics of the spray have evolved so as to reduce drying time tolittle more than 2 minutes, and further reductions are in the offing.Together with appropriate changes in factory layout, such innovationshave at east halved labor requirements of establishments in which theyhave been adopted. Flexibility in setting up woodworking machinery afforded bymicroelectronic devices and numerical controls should also advance theefficiency of custom cabinet production. Moreover, families of commonparts are more efficiently produced where group technology concepts orflexible manufacturing systems have been adopted by establishments inthis segment of the industry. The Bureau of Labor Statistics has projected an average annual risein the employment of the industry group to which kitchen cabinetmanufacturing belongs of 2.

3 to 2.4 percent between 1982 and 1995.These rates are somewhat lower than the 2.8-percent annual increaserecorded for the 1972-82 span. The occupational mix of the industrygroup is not projected to change significantly. The Bureau alsoprojects great strength in residential construction in the years ahead,with 2.16 million private housing starts in 1988, and 1.

9 millionannually thereafter to 1995. Expenditures for replacement andremodeling are also likely to increase, considering the large additionsto the stock of residential housing in the 1970’s. Consequently,if demand for kitchen cabinets and vanities grows with the projectedrise in residential construction and replacement and remodeling outlays,capital investment in the industry should be spurred, ensuring continuedproductivity improvement.

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