The design companies: in-house production and external supply chains
Getting back to the furniture sector, this moment of crisis implies risks and advantages for companies that make their entire product catalogue “in-house,” and for those who rely on a chain of external suppliers. Here’s why.
The importance of working with suppliers accustomed to handling highly variable situations
The Boffi De Padova group does most of the production on its own premises, for the Boffi brand, while the work is totally outsourced to a group of Brianza-based firms, for the De Padova brand. “The latter has a very streamlined structure,” says Roberto Gavazzi, CEO of the group, “capable of great flexibility, absorbing the contraction of orders. It has only a few fixed costs, which instead are distributed across the network of suppliers, small companies accustomed to coping with highly variable situations – just consider the lack of continuity in the contract sector – as long as the drop in orders is not too drastic.”
The relationship between contraction and fixed costs
Boffi, with its connection to the construction market, has had a smaller reduction of production. On the other hand, however, it has more fixed costs linked not only to personnel, for which social safety nets are in place, but also and above all to operative structures and the support of proprietary stores to compensate for the lack of liquidity caused by this period of closure and low client influx. Measures have been taken to cut costs, limiting the losses due to the inevitable drop in sales volume this year.