Divide and Conquer
Rampart Partitions grew in tough year by increasing efficiency, targeting U.S. market

By most accounts the office furniture market has been going through a tough time. However last year, La Prairie-based Rampart Partitions, which manufactures dividers, cubicles and workstations managed not only outperform, but to build market share too.

"There has been a glut of used furniture on the market caused by layoffs at companies like Nortel. And it has put real pricing pressure in our industry," said Robert Elhen, the company's president and controlling shareholder. "We had to fight hard for every order."

Elhen's situation is not unique. Many industries go through periods of excess capacity. According to Elhen the key to success during the tough times is to bear down, focus on operational efficiency, weather the tough times, and then build share when the market picks up again.

It's an aggressive strategy, but Elhen has to be aggressive. Rampart competes against far larger players like Artopex Plus, the Global Upholstery Company and U.S. based giant Steelcase Inc. His strategy is to manufacture workstation cubicles that are designed specifically to customer needs.

When Rampart's designers prepare an office plan, they take into account everything from the type of lighting (natural or synthetic), the work being conducted and the noise level in the office. "The trend is toward open offices with lower divider walls," said Elhen. "In recent years we have seen the demand shift from 72" high partitions to 60" units."

The strategy seems to have worked. Ramparts sales grew close to 30 per cent during the year ended October 31, 2002, and staff increased from 14 to 18. This despite the fact that, the office furniture market grew a measly 0.2 per cent to $5.1 billion during 2001, according to Statistics Canada.

According to Ginette Gadoury, editor of Interiors Magazine, businesses are being more demanding than ever. "They want flexibility in their layouts," Gadoury said. "Companies are hiring, then moving staff around, then downsizing. They are always changing and need to be able to adapt their layouts."

"Office space is one of the largest costs for most companies after salaries, and it has to be well managed," Gadoury said. "That means giving employees a smaller amount of space, but compensating by making their environment more attractive, so they do not feel you are taking anything away."

Elhen, took over the Rampart in 1979, shortly after obtaining his engineering degree from Carleton University, due to the premature death of his father, who founded the company in five years earlier.

It was a baptism of fire that Elhen endured well, despite his young age. During the mid-1990s, the company saw significant growth as a key supplier to the Canadian government, which comprised an increasing proportion of its sales.

But as the decade came to a close, Elhen the government business reduced to a dribble due to cutbacks, and specification changes that favored competing products. So he decided to re-focus his strategy from the public sector market to the private sector.

"The last couple of years have been challenging," Elhen said. "We may have gotten a little soft during the good times."

According to Elhen the recent success is due to several factors. For one he made several product innovations to his divider panels, including re-designing the electrical conduits, testing new and recycled materials and sub-contracting non-core operations to increase his flexibility. As a result, Rampart can now produce office cubicles about 15 per cent cheaper than just a few years ago.

Elhen was also able to get Rampart listed in the catalogues of two U.S. office products buying groups, in which companies pool their resources to get discounts. Elhen credits the listing, plus the low Canadian dollar for bringing in at least $250,000 in new U.S. orders last year. He also picked up several hundred thousand dollars worth of business when one of his Toronto competitors got into financial difficulties.

So what about the future? The continue Rampart growth into 2003 Elhen is expanding his product line by signing an exclusive distribution agreement with LAS Mobili, one of Italy's largest office furniture manufacturers.

Elhen and his business development director Michel L'Heureux showed off the new line of desks, cadenzas and ergonomic chairs recently at the International Interior Design Exibition in Toronto and the products were a big hit.

"All kinds of people were coming into our booth and just dropping down in to the chairs," said L'Heureux. "Even our competitors were impressed." According to Elhen, Rampart picked up about 80 sales leads from trade show visitors, and he projects the new line should bring in about $1 million in new sales during its first year.

 

 

Photo caption: Robert Elhen, president of Rampart Partitions, shown here with the company's Variation Plus office cubicle workstation grew his business by focusing on productivity increases and targeting the U.S. market.

 

Getting ahead:

o Elhen built his business by manufacturing custom workstation cubicles tailored to the specific work conditions of each of his clients.
o When times got tough in the industry, Elhen bore down on operations by improving productivity and testing new materials to reduce costs.
o Elhen markets his products through a North American wide network of agents and manufacturers representatives, which keeps selling costs to a minimum.
o Rampart is complementing its line, through a distribution agreement to market ergonomic, low cost Italian office furniture

 

 

peter@peterdiekmeyer.com

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