KENTWOOD — After years of growth, executives at Compatico Inc. needed to make a decision about the company’s future.
Over the last decade, the manufacturer and assembler of panels, benching and other office furniture systems had spread out over four different buildings. When Compatico recently faced the need to expand again, the company weighed purchasing an additional building or moving its operation to a singular, larger facility. Executives ultimately opted for the latter option.
“You can envision the difficulties and inefficiencies with four facilities,” said President John Rea. “One of the things I like (about) being in one building is that there’s a lot more camaraderieship.”
To boost efficiencies, the company opted to lease a new 85,000-square-foot facility from Grand Rapids-based Robert Grooters Development Co. at 5005 Kraft Ave. The new building in Cascade Township also gives Compatico the option to scale up to 110,000 square feet if it needs to expand further.
“You can just guesstimate how much more efficient we’re going to be,” Rea said. “It’s really exciting.”
Compatico operates from approximately 70,000 square feet of space between its four buildings. The company invested approximately $250,000 into new capital equipment as a result of the expansion, Rea said.
To avoid putting pressure on its customers and production partners, Compatico plans to move one product line per week to the new facility beginning in March 2016, and it will finish the move the following month. That way, the manufacturer can minimize the delay to customers to no more than one week, Rea said.
Compatico’s expansion into one larger facility underscores the company’s growth trajectory, which has accelerated in recent years, Rea said. The company generates annual sales of under $25 million, but sales have grown by 14 percent in 2015 alone, he added.
Rea projects Compatico’s annual sales will increase by 10 percent in 2016.
Compatico’s growth projections slightly outpace the forecast for the office furniture industry as a whole. Shipments of office furniture are expected to reach $10.6 billion in 2016, an increase of 4.2 percent from the previous year, according to an updated forecast prepared by IHS Global Insight for the Grand Rapids-based Business Institutional Furniture Manufacturer’s Association (BIFMA).
NEW PRODUCT DEVELOPMENT
To drive its growth in coming years, Compatico plans to focus primarily on developing new products, which it distributes to dealerships across North America and South America.
As consumer tastes in office furniture shift to a more balanced approach with both private and open collaborative spaces, Compatico recognizes the importance of designing products to accommodate future shifts in the office environment.
For example, Compatico’s modular framing systems allow customers to adapt their office furniture needs at any time, Rea said.
“The problem with benching is when you want to modify the solution, you’re pretty much stuck with four legs, a table, a wire trough and some screens,” Rea said. “Our systems allow you to change anytime. From our benching system, you can create full walls or a floor-to-ceiling wall.”
Compatico also recently released its new Hush brand of modular acoustic wall tiles, which it hopes to build upon in future product iterations. The company plans to release a hybrid version of its benching systems that incorporates its Hush technology.
Compatico will also integrate baffles into ceiling-hung acoustical tiles and incorporate new materials into the inserts for its Frame line in future generations of the products, Rea said.
While Compatico intends to focus on new product development, the company must be intentional in the ideas it decides to pursue given its relatively small engineering and design staff.
The company employs four engineers, but “could use four more in a minute,” Rea said. Because of its limited engineering resources, Compatico keeps a running list of new ideas, then prioritizes the ideas that float to the top, charging the team to work on them as resources become available.
“It’s tough. You want to do so many different things (so) it challenges you that way,” Rea said. “You have so many different creative ideas generated from people inside and outside.”
Compatico’s executive team encourages employees to bring those ideas for potential new products to the executive team. For example: The idea for the company’s Hush tile system came from one of its engineers who moonlights as guitar player and needed something to go on his wall to dampen the sound, Rea said.
Including its engineering staff, the company employs approximately 50 workers at its West Michigan facilities, plus additional sales personnel.
Combined with general market conditions, the company’s new product development efforts should help drive growth in 2016, Rea said.
“Even in a flat year, we think we can grow if we can come up with the right ideas that fit the right niches,” he said.