Grand Rapids Chair company is finding a competitive advantage by keeping production in West Michigan. President and CEO Dave Miller, left, and Geoff Miller and Greg Bremer recently spoke with MiBiz about the company’s growth prospects in 2010. PHOTO: NATHAN PECK PHOTO COURTESY OF PFIZER

By Nathan Peck | MiBiz
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GRAND RAPIDS — In an industry that has become increasingly reliant on far-flung supply chains around the globe, Grand Rapids Chair Co. is finding value by staying close to home.

Started 13 years ago in the garage of Dave Miller, a former executive with fine furniture-maker John Widdicomb Inc., Grand Rapids Chair sought to fill a niche for customized chairs and barstools for hospitals, restaurants, hotels and universities. Speaking inside his office with large bay windows overlooking the production line, Miller, his son Geoff Miller, and CFO Greg Bremer told MiBiz that the decision to keep manufacturing in Grand Rapids has paid dividends, even in the midst of a difficult economy.

“The reason our customers do business with Grand Rapids Chair is that they know it’s safe. They know what they have is quality,” Dave Miller said. “Long after they forget what they paid for the chair, they remember what they got was quality.”

Dave Miller takes the responsibility for the family-run business to heart. While many companies have shuttered, he views the 115 employees at Grand Rapids Chair as an extension of his own family. He expressed pride at the fact that many new hires over the years have been referrals of family members already working at the company.

“Being made in Michigan for us is a financial decision, an emotional decision and fiduciary responsibility decision,” Dave Miller said.

Grand Rapids Chair has carved out a niche in the hospitality industry by providing rapid customization for its customers. Using technologies old and new, the company leaned its operations so that it can be profitable with small runs, typically nine pieces or less.

“The evolution in our business (is that) we have found growth through small batch manufacturing,” Geoff Miller said. “That type of market cannot be reached by the largest players in the industry.”

Investing in people power

Walking around the floor of the three manufacturing facilities, Dave Miller is an affable, gregarious figure, striking up conversations with the employees at work. The last two years have been difficult, as the industry watched 30 percent of its sales disappear from 2008 to 2009.

“We had a feeling it was coming. I refused to give employees a reduction in salary, and we worked as a team to save money and manage different areas more efficiently,” Dave Miller said. “In the downturn, we got smarter.”

Bremer said the company has developed a uniquely talented group of employees, and they are the reason it has not had a layoff as a result of the recession, though the company, too, took a hit of around 20 percent of sales in 2009.

“We have a team mentality. We bring people in with a high skill level. We invest a lot in our people,” Bremer said. “We put a lot of money into training these people. We have people that know this business better than anyone else. They know how to run the business, how to sell. You start slashing staff, getting rid of your experienced staff, and you have to start that process all over.”

In another move that went against the grain, the company added a table plant in 2009 to add additional capacity for a growing revenue stream, and hired 12 people as a result.

“Our bankers thought we were crazy,” Geoff Miller said. “The table plant was something where we could pull business in and see a return on that investment.”

Going green

The company recently shifted to water-based varnishes on its tables and chairs since they are lower in volatile organic compounds, installed a zero-emission powder coating line, and sourced their lumber from certified foresters. Materials costs are a relatively small part their total costs, and going green has yielded significant strategic advantages as more of the construction industry works to incorporate LEED building elements into new and existing buildings.

As building owners can gain LEED accreditation points for sourcing materials close to home, the company is targeting architects and interior designers around the Midwest as an entry point into decisions about green products.

The push for sustainable practices goes beyond “green washing,” as the company leads dumpster dives each quarter to ensure that all of its waste is directed to the proper recycler, among other initiatives.

“It is not in our being to pollute in our backyard. We work really hard on greening our operations,” Dave Miller said. “We find that by doing that, we are working smarter and lowering our costs.”