Ty Lorts

The company had run out of space, function, and capacity in its existing 30-year-old facility. However, building availability and reasonable costs were difficult to find in an area that provided the workforce required to support business growth plans.

Located a facility that was not listed because previous listing agents found the owner difficult to work with and a potential environmental liability to be prohibitive. Researched the environmental issue and discovered it was easily solved. Additionally, found that full transparency was the best way to communicate with the existing owner, which resulted in easy negotiations.

The new facility led to an 84% increase in production capacity and offered the space and functionality needed for business growth. Furthermore, it served as collateral when financing was required.

A.F. Lorts’ revenues and market share had stopped growing. The company was in a difficult position as a domestic home furnishing manufacturer serving the U.S. market while competing with high-quality, low-cost Asian imports.

First, identified an opportunity with furniture customization and decided to stop turning down these customer requests. Then, shaped the equipment and sales materials to promote Lorts’ ability to customize furniture. Finally, reconfigured factory layouts to produce individual items versus hundreds and adjusted prices accordingly.

Sales grew from $6 million to $28 million, and Lorts gained recognition as the industry leader in wood finishes, customization, and customer service.

Company productivity was suffering because of a lack of teamwork. Antiquated thinking had resulted in each functional area protecting their own territory and believing other areas were less important.

First, acknowledged and communicated the issue to employees. Second, rewarded examples of assisting other areas for the benefit of the company. Third, instituted corrective action for any exhibition of the negative behavior.

As a result, the company’s performance improved at every level. Maintenance expenses were lowered by 20%, throughput increased by 20%, order processing time improved by 15%, and the financial period was reduced from three weeks to five days.

A.F. Lorts customers felt unappreciated and often did not purchase again. The acquisition of new customers was significantly more expensive than procuring additional business from existing customers. Furthermore, previous leadership believed customers tried to take advantage of the company and make it difficult to resolve their issues.

Led the company in changing the company culture to give the customer the benefit of the doubt and ease the process of having their issues addressed. Additionally, ensured a person always answered the phone versus an automated system. Finally, instituted an industry-first rewards program that paid store salespeople and interior designers cash back when they successfully sold Lorts furniture.

The drastically improved customer experience subsequently tripled repeat business from existing customers and boosted the average yearly volume per customer five-fold.

Company overhead required a level of contribution margin that was not compatible with solely domestic production. However, there was a lack of skilled workers in the U.S., which limited the amount of unfinished furniture that could be produced in the organization’s Arizona facility. Additional production was needed.

Traveled to China, the Philippines, and Mexico to build relationships with factories that would supplement the domestic production at a relatively low price.

The new domestic/import production hybrid model ultimately drove a 40% increase in production.

There was an opportunity for A.F. Lorts to enter a niche market and allow customers to select a high-quality finish for their furniture. Existing finish systems had extremely long changeover times, often taking days to complete one finish. This made it difficult to profitably offer finish choices to customers.

Completely redesigned the traditional finish line. Now, multiple flow lines allowed sprayers to grab a different gun for a different finish without any wait for changeover.

Consequently, finishing costs were lowered by 20% and profit grew by 3-4%.