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By Bill Davies
Published in the October 2005 issue of Today’s Facility Manager
Over the past five years, there have been many changes throughout the economy—the office furnishings market included. During the late 1990s, this industry showed unparalleled growth approaching $13 billion in market size. This was followed by the bubble bursting in 2001-2002, with U.S. office furniture production slowing to approximately $8.89 billion.
A projection from the Business and Institutional Furniture Manufacturers Association (BIFMA) currently estimates 2005 production to reach $10.05 billion; in 2006, that number could climb to $10.75 billion. The furniture industry, like the rest of the country, is gradually getting back into a growth mode.
The events that have driven this change and will continue to impact things in the future include several developments. First, major companies have downsized, merged, consolidated, or gone out of business. Office furniture manufacturers as well as service providers have followed this trend, leaving facility managers with fewer choices, but presenting them with the opportunity to find stronger, more versatile partners.
An example of this reconfiguration of the industry is the decision by Steelcase to discontinue its remanufacturing operation, “Revest,” which was then picked up by independent organizations in different regions. The impact of this adjustment on the office furnishings market has been an influx of high quality, high end furnishings.
Second, foreign imports continue to provide new products and components on par with the quality and performance of U.S. manufacturers at a lesser cost. This has had a decided impact on the overall market size of U.S. produced goods. It has also enabled facility managers to acquire more for less, driving down the average cost of furnishings for new or existing space.
Other factors with an impact on the market include economic and environmental events. Operational costs have skyrocketed with the fluctuating cost of energy. This will continue to be a major concern to every business, and many are learning how to embrace “lean” thinking as a way of doing more with less and eliminating waste.
Companies must find a way to maximize the value of assets they already own. Relegating existing furnishings to landfills is not a practical option, and alternative solutions like reuse should be explored.
Lastly, programs encouraging green building initiatives have been introduced. Programs such as the U.S. Green Building Council’s (USGBC) LEED Rating Systems for new construction (NC) and commercial interiors (CI) play an increasing role in how facility managers make furnishing decisions.
Each of these influences plays a major role in justifying and validating a facility manager’s decision to incorporate refurbished furnishings.
Typically, the questions arise about what types of furniture lend themselves to being refurbished. The answer is simple: virtually all products in some way, shape, or form can be revitalized. The issue becomes how much work is required to bring each asset to the desired result.
Providing a refurbished solution can be as simple as the redeployment for reuse of existing furniture assets “as is.” This can entail minor cleaning, touch-up, re-keying, and other simple adjustments. It can also be as complex as a complete remanufacture and rebuild to create a “like new” solution.
Considering Refurbished Items
Why should facility managers look at refurbished solutions for furnishing their spaces?
Save Money. Facility managers can save thousands of dollars on projects by using a blended solution of new, as is, and refurbished furnishings to achieve the desired aesthetics and function for a new or existing space. It is not unheard of for a facility manager to save 50% or more on projected furniture budgets. There are many as is work stations that can be acquired, delivered, and installed for less than $1,000. The same work stations when refurbished or remanufactured may cost $1,500. But brand new, the cost for these items can exceed $2,500. This type of scenario can also hold true for seating and case goods.
Earn points towards USGBC LEED project certification. The rating systems for LEED-NC and LEED-CI award points toward certification for including remanufactured, refurbished, or as is furnishings in the facility. For example, new construction projects can earn one point toward LEED certification for using “salvaged, refurbished, or reused materials, products, and furnishings for at least 5% of building materials.” An increase to 10% earns the project two points towards certification.
Environmental. Excess furniture inventories at the facility can be re-used and redeployed for many projects. A facility manager can capture the embedded value of these assets by trading in, exchanging, or banking them towards current or future needs. Some service providers can offer all or some of these options, eliminating the need for the items to sit in a warehouse or sent off to some distant landfill.
Further, the environmental benefits of refurbished furniture include saving energy that would be used to manufacture new furnishings. These findings are examined in a May 2005 study from the Rochester Institute of Technology (RIT).
The study, which focused on the energy and environmental benefits of office furniture remanufacturing, was conducted by researchers from the National Center for Remanufacturing and Resource Recovery (NCR3) at RIT and was sponsored by Davies Office Refurbishing. Research compared the process used to make original office furniture versus remanufactured product and quantifies the energy savings, avoided pollution, and waste generation associated with remanufacturing.
Among the findings was that one year’s worth of office panel remanufacturing avoids the release of more than 6.9 million pounds of carbon dioxide into the environment. Furthermore, energy savings from remanufacturing 100 office work stations could power three households for one full year. (The full study is available online for download at www.daviesoffice.com.)
Navigating The Process
As in any business decision, it is imperative to know about the company providing the refurbishing service. It is prudent to include a broad range of service providers with various expertise who can guide and assist throughout the process. Sources can include dealers, remanufacturers, refurbishers, asset management specialists, and interior designers.
When taking into account the economic and environmental impacts of choosing refurbished furniture, facility managers may find this option to be an important part of furnishing a space.
Davies is president of Davies Office Refurbishing, Inc. located in Albany, NY. He can be reached at (518) 449-2040.