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“Smart manufacturing has a bright future”

“Smart manufacturing has a bright future”

Van Hoecke, a furniture company from Sint-Niklaas, is a Factory of the Future


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Peter Van Hoecke factory of the future

From simple assembly distribution to manufacturing: Van Hoecke's path is, at the very least, remarkable for the furniture sector.

 The SME from Sint-Niklaas is investing almost 8 million Euros in a fully automated production line. And soon patented cabinet drawers will roll off the production belt every 40 seconds.

Five minutes at the table with Peter Van Hoecke and you realize this man knows exactly where he wants to take his company and what he needs to do to get there. "If God is not on your side, he’ll give you ten successful years. Business leaders gladly spend money in order to solve a problem. But if all goes well, nothing changes. However, that is just the moment to question your business model and invest.

”The Austrian Blum"

Van Hoeke's original business model was clear from the start. Peter's father started his own business venture in 1967 as an expert in functional furniture hardware. It is about more than just making furniture fittings that fit. "It has everything to do with hinges, drawer systems, swinging door systems, and having furniture components that open, close, turn and move smoothly,” says Peter Van Hoecke. Since 1973, Van Hoecke has been the only distributor in the Benelux for the global-player Blum, out of Austria. And with success Van Hoecke could achieve a market share of approximately 70%. As such, there's a large possibility that you can find one of Blum's products in your kitchen or bathroom, thanks to Van Hoecke.

Continuous growth is necessary

"It is difficult to win over that last 20 - 30% of the market share. But a healthy company needs to keep growing. For that reason, after a risk analysis in 2009, we looked to add an activity where we, as specialists grounded in our expertise, would be able to specialize further without violating any of our agreements with Blum.” And so the idea of producing their own drawers came into being. It’s actually not so crazy, given that Van Hoecke has been assembling Blum drawers since 2003. "Our clients don't have any problem with contracting out assembly. On the contrary, that is relatively simple work. You don't need expensive, qualified furniture makers for that. Our client is better off, economically, with us. Today we assemble 10,000 drawers weekly, completely customized for the client. The client can choose from 48,000 billion variants, from which he only needs to order one. That’s a good example of mass customization.

"A drawer every 40 seconds"

Van Hoecke wants to continue down this road with the drawer produced in-house. Extensive market research was conducted in order to produce the exact drawer that the clients want. And what about the cost? Van Hoecke calculated that each drawer should only require 40 seconds of production time. The result is the veneer wood Ta'or Box, which can be clicked together in less than 60 seconds using a patented system. In addition, the drawer can be packed so compactly that the transport costs are greatly reduced. Van Hoecke hopes, over time, to sell 300,000 pieces including those sold outside the Benelux and outside Europe as well. In the meantime, the first drawers are rolling off the belt. The fully automated factory needs to be running at full speed by 2018, good for a total investment of almost 8 million Euros.

Automatic stock control

What’s remarkable is that the family business finances the new factory purely with their own means, completely according to the personal vision of financial independence. Van Hoecke's revenue has doubled in the past ten years. In 2016, with 200 employees, Peter Van Hoecke generated 60 million Euros. A mere 40% of revenues come from assembly and production, the other portion from the 18,000 m² distribution center. The now fully automated stock control system handles 70 tons of material every day. Approximately 4,000 clients are served every year.

Factory of the Future

In early February, Van Hoecke was the first company in the furniture industry to be recognized as a "Factory of the Future". A Factory of the Future is a manufacturer that has focused on seven axes to turn itself into a high-tech and maneuverable organization. Besides being a modern production campus, it is more a question of self-managing teams of employees and of paying attention to innovation. "We're not that sexy," admits Peter Van Hoecke. "But winning that prize has suddenly given us a story. It brings an interesting dynamic into play. The recruitment of recently graduated IT professionals, for example. In cooperation with KPMG, we have put together a cafeteria plan for recruitment purposes. Our employees will eventually be able to choose how they want to be compensated. But even more important, the prize underlines that there is a future for manufacturing in Belgium. You must listen closely and carefully to the needs of your client. And invest at the right moment.

Watch the videos about the Ta'or Box on: www.taorbox.com

© 2018 KPMG Central Services, a Belgian Economic Interest Grouping ("ESV/GIE") and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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