In addition to its local production, the US company Steelcase produces furniture mainly in Mexico to supply the US market.
In general, the company manufactures most of its products regionally and, as a result, often exports products from where they are made to where they are sold within the region.
Steelcase also sources raw materials, components and finished products from a global network of suppliers.
In particular, in 2022, approximately 34% of the products it sells to customers in the United States, including government agencies in that country, was manufactured outside the United States, predominantly by its subsidiaries in Mexico, which operate as maquiladoras.
Financial results of the company
Steelcase is a Grand Rapids, Michigan-based company that produces office furniture, architectural and technology products for office environments and the education, health care and retail industries.
The company has manufacturing operations in North America (the United States and Mexico), Europe (the Czech Republic, France, Germany, Spain and the United Kingdom), and Asia (China, India and Malaysia).
Its global manufacturing operations are largely centralized under a single organization to serve the needs of its customers across multiple brands and geographies.
The company’s manufacturing model is predominantly to order with lead times typically ranging from four to six weeks.
Thus, Steelcase manufactures its products using lean manufacturing principles, including one-piece continuous flow and platform processes and products, which allow the company to achieve efficiencies and cost savings while minimizing the amount of inventory on hand.
Above all, the company purchases materials and components direct from a global network of integrated suppliers as needed to meet demand. It also buys finished products manufactured by third parties, mainly to order.
Its manufacturing operations were negatively impacted by supply chain disruptions, including unavailability of certain raw materials and components, labor shortages, and shipment delays in long-distance supply chains.
These challenges had a significant impact on their ability to manufacture and supply products to their customers within historic timeframes and increased their logistics and labor costs.
The company also increased its on-hand inventory levels to mitigate the challenges associated with purchasing raw materials and components in a timely manner as a result of these disruptions.