Efficiency gains allow Serta to relocate in half the space
A forced move is giving Serta Mattress Co. the chance to redo its manufacturing methods and equipment, bouncing it into the future.
Serta must move because it is in the Broadway Marketplace Development Project, a planned $40 million, 406,000-square-foot shopping center near Broadway and Interstate 25. The center will be anchored by K mart, Albertson's Inc. and Pace Membership Warehouse Inc.
"We're sitting in K mart's sporting goods department," joked Hal Patton, president of the company. Factory-directs try to alter image
Serta will move to a site near Stapleton Airport during April. The city gave Serta an incentive package to move that will cover costs, but more important, the move will help the 115-year-old company adopt state-of-the-art manufacturing procedures.
In fact, the company is trading its current 96,000-square-foot facility for a 45,000-square-foot building.
"We're going to be able to produce twice as many beds in half of the amount of space," Patton said with a drawl revealing his Tennessee heritage.
Patton will invest $250,000 in new equipment before the move is completed. The investment also will include a new computer system to track production -- a process now done manually, he said.
Patton is switching his manufacturing from the traditional method of making mattresses and storing them until needed to just-in-time manufacturing. With just in time, each mattress is produced and sent to distributors right away, eliminating the need for much storage space.
"You're going to save a lot of money on the warehousing side," said Bill Eager, director of marketing at J-I-T Institute of Technology, an Englewood firm that aids companies switching to just-in-time manufacturing.
He said this manufacturing process, also called demand flow, makes companies more nimble and responsive to their markets. Most of J-I-T's clients reduce manufacturing floor space by 30 percent to 40 percent, and inventory space by as much as 99 percent. SIZE MATTERS; LUXURY MATTRESSES ARE A HIT
Indeed, one of Serta's smaller Denver competitors, Bassett Bedding Manufacturing Co., already uses just-in-time manufacturing at its plant with much success.
"We look out about two weeks with supplies, and we produce only to order," said Ron Siler, operations manager of Bassett.
Bassett, which produces fewer mattresses than Serta, requires only a 16,000-square-foot facility.
Patton characterized the changes in his company as necessary for survival in the 1990s and beyond.
"If you're going to continue to operate in an antiquated way, you'll see profitability erode until it's gone," he said.
Serta was formed in 1878 in Leadville to make mattresses for miners. The company moved to its current location in the early 1980s, and was bought by Patton's family in 1984.
The Pattons began in the mattress business in 1910, Hal Patton said, when it bought a Serta factory in Memphis, Tenn. Now the Pattons' National Bedding Furniture Industries Inc., in Memphis, owns six factories across the country, including the Denver location.
There are 33 factories nationwide that produce Serta products; all are individually owned and licensed to produce the mattresses.
Patton said his business is different from most mattress manufacturers in that it has its own factory-outlet stores. Serta has 10 stores in all, six of which are in Denver. Serta mattresses also are sold in retailers such as Montgomery Ward & Co. and May D&F.
After the company moves its facilities, it will open another factory outlet at 340 S. Broadway, so it will not lose its presence in the central Denver area, Patton said. http://futonszone.com/mattress-mfrs-targeting-younger-generations/
Serta employs 55 people and expects sales to be about $12 million in 1993, up from $10 million last year.