Herman Miller Case

I. The Organization

Herman Miller, designs and manufacturers furniture systems and accessories. It provides products such as office and healthcare furniture systems and accessories, freestanding furniture products for office, healthcare, and learning environments, Office and institutional seating, Small office, home office, and residential furniture, as well as filing and storage products. Moreover, they offer services such as Furniture management, Strategic facilities consulting, Leasing.

Herman Miller start in 1905 with home furniture and in 1939 they start introduction/interest on idea of Office furniture (Executive Office Group). In 1942 they launch, into the market, the product EOG with a set of 15 components with 400 configurations possibilities.

So we can divide the history of Herman Miller in two parts. The first, since the company launching, in 1905, by Dutch Business, until 1942, where the revolution in office furniture really began, with the introduction of highly innovative concepts that made Herman Miller a milestone in the history of office furniture up to today.

Company History

 1905: A group of Dutch businessmen Found the Michigan Star Comp, with a tagline "Hitch your wagon to a star";

 1909: Dirk Jan DePree join to a small company as office clerk;

 1919: DJ DePree become president of company;

 1923: Michigan Star Furniture Co. changes ownership and name to Herman Miller Furniture Co (purchase DepPree).

 1931: Gilbert Rhode, popular designer, joined to Herman Miller;

 1933: Rohdes's debut in modern home furniture designs;

 1942: Rohdes's Executive office Group (EOG) was introduce;

 1957: Herman Miller begins sales in Europe;

 1960: Company incorporates and changes its name to Herman Miller, Inc.

 1970: First offering of company stock to the general public;

 1976: Star Industries, later called Integrated Metal Technology, becomes a wholly owned Herman Miller subsidiary.

 1979 - 1986: Company operates training program for corporations, known as the Facility Management Institute.

 1982: Creation of Miller SQA Tradex, Inc. becomes a Herman Miller Co. and changes its name to Phoenix Designs; Herman Miller acquires Vaughan Walls, Inc.

 1983: Herman Miller acquires Miltech.

 1985: Company's Health Science Division becomes a wholly owned subsidiary known as Milcare that provided storage and carts to hospitals and healt care organizations

 1986: Herman Miller purchases Helikon Furniture Co. of Connecticut; Milcare acquires Fairfield Medical Products.

 1990: Herman Miller acquires Meridian, Inc. of Spring Lake, Michigan, specialized in metal office products;

 1992: Company begins Powder Coat Technology subsidiary in Spring Lake; Miltech dissolves and merges into Herman Miller.

 1994: Herman Miller acquires Righetti of Mexico.

Business Model and Competitive Environment

Herman Miller was over time creating or acquire several subsidiaries that add value into the Supply Chain. Each subsidiary had specialized in some kind of complementary product/service that enriches the Product Modularity offer by Herman Miller, creating in this way a large range of possibilities (Customization) using a standard base product.

Within this philosophy, of adding value to the customer, was created a subsidiary, Miller SQA, which had the function to the upturn used furniture to key customers and remanufacture it, to be sold by, Customers-Order (Pull System) to startups companies or others that was under upgrade size structure.

II. The Problem

We can say that there are two phases in this work problem or two sequential problems, with the business model development. The first phase is due to the strategic positioning of the business, followed by Miller SQA, with the out of the furniture remanufacturing and get into the business of new furniture.

With this change, and consequently, the entry into the second phase appeared a second problem, conflicts in the distribution channel with Herman Miller.

First phase Problem:

Due to the reduced sales volume and also business profit margins, within the refurbishing market, with the entry of new operators, brokers that droves