MAiSPACE Cost Containment Practices Yield Increased Sales during Rough Year in Contract Furniture Industry Marketplace

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Offshore manufacturing coupled with efficient domestic supply and installation services enable MAiSPACE to win business with price points averaging 40% below leading competitors. Signed Contracts Yield Job Creation in Support Services.

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the company has a shipping process whereby full bulk containers of structural components are shipped to the U.S. in order to further reduce costs. These components are delivered to our warehouses in California and New Jersey, which support our ability to provide quick service. These are among the reasons we can complete installations or replacements within 4 to 6 weeks of receiving an order.

Cost containment practices practiced by contract furniture manufacturer MAiSPACE based here enable the company to keep its order book filled as customers and prospects seek out the best deals for office furniture installation or upgrade projects that cannot be postponed, reports Mark Bassil, the company's co-founder and vice president.

"These practices enable us to set price points averaging 40% below some of the best-known names in the contract furniture industry," Bassil says. "We provide move-in spaces at prices starting at $12 to $15 per square foot regardless of the number of workstations ordered. These price points are not at the expense of attractive designs and overall quality; indeed we provide a lifetime guarantee and warranty against obsolescence."

According to Bassil, MAiSPACE regularly wins contracts when prospects do their homework comparing price, quality, flexibility, data management and other issues important in purchasing beautifully designed, ergonomically correct and superior performing workspaces. "Among these are Advanstar Communications, T-Mobile, ArtNet, Monarch Healthcare, Gensler, Sherwood Resorts, Rolls Royce, College Loan Corporation and Northrop Grumman," he says.

The MAiSPACE Approach to Cost Containment: Bassil's firm since 1993 has used an overseas manufacturer to provide the basic components of modular office furniture systems the company sells through dealers and distributors to customers throughout the United States. "While our manufacturer delivers these components at a cost lower than if manufactured here there is much more involved in completely furnishing a workspace," Bassil says. "Looking at the big picture, more employment opportunities are generated here when cost containment processes are in play. Instead of being postponed, projects move forward because companies are more able to afford modernizing their workspaces."

The number of MAiSPACE workstations installed at a project range from a few to thousands. "In most of these projects, customers did their homework comparing price and quality with other brands on the market," Bassil points out. "With an installed cost starting at $12 to $15 per square foot, we win and our customer wins on both counts."

Employment Impact of a Lower Cost: Customers do have the option to pay more, Bassil agrees. "Or they may decide to postpone the buying decision. Taking a positive spin, when an installation contract is signed, regardless of the systems furniture manufacturer, job opportunities result here in the United States. They run across the board in terms of talent, training and payroll. Examples include employees of local office furniture dealers and distributors handling the project, companies that transport systems furniture components to the project site, professional furniture installers along with telecommunications engineers and electricians handling the voice, data and power requirements; interior decorators, carpenters, painters, and suppliers of related components associated with either new or refurbished office spaces."

Potential Pitfalls in Outsourcing: With 15 years of experience behind it, MAiSPACE has accumulated a wealth of knowledge on how the outsourced manufacturing process should be managed and what customers should look for in a vendor.

"Purchasers of products manufactured in whole or part outside of the country must quiz potential vendors to be sure all bases are covered," Bassil says. "With distances involved from Asian manufacturers, for example, delivery times for new or replacement product can be an issue. An obvious question relates to the vendor having a U.S. based warehousing and distribution system, and how quickly products can be delivered.

"In our case," he says, "the company has a shipping process whereby full bulk containers of structural components are shipped to the U.S. in order to further reduce costs. These components are delivered to our warehouses in California and New Jersey, which support our ability to provide quick service. These are among the reasons we can complete installations or replacements within 4 to 6 weeks of receiving an order."

Does the product conform to all relevant local codes? "There are standards governing the installation of voice, data and power cabling runs in modular office furniture systems," Bassil points out. "Customers may not be aware of these codes. They should seek assurances that the installation will pass muster when the inspector arrives, and that a certificate of occupancy is delivered." He notes as an example that the MAiSPACE patented plug and play voice, data and power cabling system is of U.S. origin and conforms to telecommunications industry standard for open office designs.

Does the vendor stand behind the product? "Service and support are crucial and failings here can quickly offset savings," Bassil states. "It is not enough merely to deliver product. Furnishing modular offices can be a complex undertaking requiring professionals across the board."

Issues to be addressed include space planning, choosing the correct fabrics and finishes, providing detailed product lists and installation drawings, meeting timetables and providing overall project management. Coordinated delivery of product, certified installation managers and experienced labor crews are another part of the satisfaction mix along with lifetime guarantees and warranties against obsolescence.

"The point that must not be lost here," Bassil says, "is that these projects require American labor and talent. When organizations are able to afford to furnish new workspaces or modernize existing facilities because basic structural components are manufactured offshore, benefits accrue to everyone involved. In our case, for example, 70 cents out of every dollar spent on a MAiSPACE installation remains in the United States."

Benefits of Outsourcing Widely Reported: It is difficult not to sympathize with individuals whose jobs have been exported, Bassil says. "This is why free trade agreements are political hot potatoes. But doing a web search on the topic yields a wealth of information on the overall benefits of the practice."

He cites as an example the article "10 Truths about Trade" by Cato Institute's Brink Lindsey that appeared in Reason Magazine. In it Lindsey says "Trade is only one element in a much bigger picture of incessant turnover in the American labor market. Furthermore, the overall trend is toward more and better jobs for American workers. While job losses are real and sometimes very painful, it is important -- indeed, for the formulation of sound public policy, it is vital -- to distinguish between the painful aspects of progress and outright decline."

"Reason number 8, 'Offshoring Creates New Jobs and Boosts Economic Growth,' is particularly relevant to our business," Bassil says. "It states in part that 'although offshoring does eliminate jobs, it also yields important benefits. To the extent that companies can reduce costs by shifting certain operations overseas, they are increasing productivity. The process of competition ultimately passes the resulting cost savings on to consumers, which then spurs demand for other goods and services. Whether caused by the introduction of new technology or by new ways to organize work productivity, increases translate into economic growth and rising overall living standards*.'"

A similar article, 'Ten Myths about Jobs and Outsourcing' is found on The Heritage Foundation website.


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