Cabinet Manufacturer Doubles Size of its Company in Three Years

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Using business sense to determine what buyers want while delivering a quality product, a Sioux Falls cabinet manufacturer sees double-digit growth in 2007 while other cabinet companies experience a steady decline in sales.

In just three years, StarMark Cabinetry - a Sioux Falls cabinet manufacturer - has grown from $48 million in annual sales to more than $100 million. As a result, the company has doubled in size during this time period.

In an industry that is declining at a rate of 14%, StarMark (http://www.starmarkcabinetry.com) continues to enjoy double-digit growth in 2007. The kitchen and bathroom cabinet manufacturer's compound annual growth rate since 2004 is 26.6%.

StarMark Cabinetry's NCR hovers at 1 percent; NCR means "no charge replacement." It measures how many dollars of product is replaced for every $100 of product that leaves the plant. Other cabinet manufacturers competing in the semi-custom cabinetry category have an NCR ranging from 2.5 to 3.5 percent. To a business owner selling kitchens, it's the difference between three or four kitchens needing work in a given week, or just the odd kitchen needing a tweak.

StarMark's focus on always improving one or more aspects of production increases sales and reduces costs. Consider:

  •     In the first four months of 2007, StarMark Cabinetry saved $98,750 because the cabinet manufacturer reduced the errors made building and finishing cabinet doors.
  •     In 2006, Continuous Improvement initiatives saved the company $494,000. In 2005, the savings were $319,000.
  •     StarMark Cabinetry realized these savings while bringing on board an additional 209 employees in the last two years.

"This type of performance is a win-win for everyone," said John Swedeen, president of StarMark Cabinetry. "Homeowners are happy, and they refer our dealers to friends and family. Our dealers' businesses improve. Best of all is what it enables us to do for the people of StarMark, to give our employees profit-sharing bonuses and to increase the company match of their 401K contributions.

"To me," said Swedeen, who's been with StarMark Cabinetry nine years, "that's the real win."

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Jennifer Thom
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