02/18/2021

Optimism despite many turbulences

The German trade magazine HK asked the USA expert and Senior Manager of Schuler Consulting, Florian Hauswirth, to give an interview on the consequences of the Corona pandemic in the United States, its impact on automation, and the mega-trend of digitization, which is somewhat different on the other side of the ocean than in Europe. The interview was held by Markus Schmalz, Editor-in-Chief of HK. 

The article was published in: HK - Archiv HK 01-2021

Mr. Hauswirth, at Schuler Consulting you are Senior Manager for consulting projects in North America. The Corona pandemic has not stopped at the furniture industry either. What is the biggest challenge for you and your customers at this time?

Many companies are under a lot of pressure due to the pandemic: Companies are concerned about the health of their employees and the protection of their customers with whom they are in direct contact. At the same time, they have to respond to the economic impact. Markets are changing: it is necessary to ensure the survival of their own company - this is linked with uncertainty for some companies in the furniture industry. However, it is not possible to make generalizations here, because the situation is different for each company depending on its production focus.

The Corona crisis was accompanied by an immense organizational and communication effort: safety precautions at the workplace, information on lock-down regulations, delivery delays, provisions for customer visits and much more - all this has to be communicated and structured. By now, many companies are more practiced at this and the processes work more smoothly. From a political point of view, 2020 was also a year of upheaval and change for the USA - this also had a major impact on our customers last year.

What actions have your customers in the U.S. and North America taken in response to the Corona crisis?

It is often reported that large sections of the American population do not take the Corona pandemic seriously. My experience is quite different. Hygiene and distance regulations, mandatory mouth-to-nose protection - these and many other measures are standard practice here in large areas of the public sphere and in many companies. In Canada, the solidarity with protective measures is, in my view, even significantly higher. In large companies, administrative protective measures are systematically established at the workplace. For example, the arrival at the workplace is organized in such a way that employees do not meet. In production facilities, shifts are extended in time so that fewer people are on the shop floor at the same time and the risk of infection is minimized. In many places, those who work in the office move to the home office - similar to the situation in Germany.

How severely were the various production segments affected by the impact of the Corona crisis?

In North America just as in Germany and Europe, we are observing that the development of the pandemic is affecting individual segments of the furniture industry to varying degrees. Looking at this in detail, German companies often face a similar situation to American ones.

Home and upholstered furniture manufacturers as well as kitchen builders are noticing a strong order intake, while office furniture manufacturers, especially those for open-plan offices, are currently going through very hard times. On the other hand, one of our employees shared with me the story of a Canadian customer who produces built-in cabinets and is currently unable to keep up with production at all. His order intake has doubled due to the pandemic.

Is the Corona pandemic triggering a digitization boom in North America, similar to the one in Germany?

In Germany, people often talk about how the Corona pandemic has given digitization an additional boost. This is because the pandemic revealed digitization gaps that had already existed for years. The pressure to digitize here comes from the business community. Digitization is a must for businesses in Germany in order to remain competitive.In the USA, things tend to be somewhat different. Here, the topic is often equated with manufacturing automation and robotics. The fact that digitization can cover the entire flow of information in a company is often not as consistently considered.

But here, too, there is an urge to automate. The pressure comes mainly from the empty labor market, as well as from the rural exodus and the resulting aging of rural areas in particular. Thus, although automation was not triggered by the pandemic, it was intensified. This is a development that we are also well aware of in Germany and to which companies must respond. Automation now takes on a whole new significance as a protective measure for the company's own employees. The fewer people present on the shop floor, the lower the risk of infection and thus of production delays or stoppages. In addition, the automation of individual or interlinked work steps offers the opportunity to relieve employees and make them available for other value-adding activities.

What impact does the Corona pandemic have on your day-to-day work?

Of course, my daily work is affected as well. Before Corona, communication with customers was very much characterized by face-to-face conversations on site. That has now shifted to a good extent to a digital exchange. On the one hand, this eliminates some travel time, which is a positive effect from an ecological point of view. On the other hand, digital communication naturally also influences the way we structure our consulting activities and also our sales. A challenge for both sides that sounds more trivial than it is.

Which conditions have changed for your customers and for you as a result of digital communication?

Both for customers and for us as consultants, the switch to digital communication inevitably brings with it new general conditions. Our customers are glad that these digital options exist and that they don't have to miss out on our consulting services despite Corona. At the beginning of the travel restrictions, I experienced some customers in North America who still had to learn how to use video conferencing tools. But the learning curve then went fast and steeply upwards.

From the customer's perspective, in communication, whether analog or digital, the onus is always on the consultant. We have to win the customer's trust. This is a challenge when you can't be on site and talk to each other face to face. The Corona pandemic has changed how we work, but not what we do. That's an important distinction that I keep reminding myself.  We continue to pursue our core business, and that is where the trust of our customers is based, with drive.

How do you succeed in digital sales?

My tip for success in digital sales is to listen. For me, that is a key to success in this crisis. We bring our customers tailored solutions - that only works if you know each other. If the level of "face-to-face" communication no longer exists, we fall back on digital possibilities. The basis of all this is listening. That also works digitally. Many entrepreneurs have a vision. Our job is to give them the right technology and methodology to get your company where it needs to be. Corona hasn't changed that.

Looking back on the evolution of the furniture industry in 2020, what sticks out in your mind?

One experience that particularly surprised me in the U.S. was the impact of the direct financial assistance that the Trump administration instigated. In April 2020, Donald Trump had sent a check for $1200 to all taxpayers with an annual income of up to $75,000 as financial aid against the economic consequences of the Corona crisis. This amount was in some cases higher than the wages of some U.S. citizens. The result? Some employees preferred to stay home. As a consequence, some employers, including one of our clients, had to entice their employees with raises to get them to come back to work.

Another example I like to remember is the story of furniture manufacturer Gator Millworks. Twice already, our client has proven that it is "crisis-proof": in 2016, a flood completely destroyed its manufacturing facility in Louisiana. Within just nine days, the team was back in production - some of it by hand. 2020 during the Corona crisis, the company overnight began producing face shields alongside regular operations to support the healthcare sector. I also wrote an online article about this impressive encounter, as I was struck by the company's active response to these various, existential crises.  An example of the so-called "American way."

How are you heading into 2021?

At the moment, we are seeing productions stabilize again. That's a good sign that I'm taking with me into the new year. Despite all the turbulence, our customers are showing us optimism. It will certainly take some time for the economy to return to "pre-crisis" levels. And Corona will still be an issue in 2021. Thanks to digital communications capabilities, we can continue to offer our consulting services without putting our customers and employees at risk. We intend to continue doing so in 2021. Personally, I wish that the direct meeting level can take place again soon.

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