Operations & Supply chain management
Company Background:
The Bruynzeel Company was created in the Netherlands in 1897 and specialized in carpentry, wooden floors and shipbuilding. In 1937 it also began to manufacture kitchens. In 1982, when it went bankrupt, Bruynzeel Keukens BV was created and began to compete in the low- and medium-range kitchen market in the Netherlands.Operations & Supply chain management
In 2004 sales reached nearly €108 million and were expected to grow by 12% (in value) for 2005. The company had almost 500 employees, 350 of whom worked in production and order administration. Most of its turnover was made in the business-to-business (construction market) and the remainder in retail.
Bruynzeel’s success was based on three key factors: The first was excellent brand recognition in the Netherlands — 93% of Dutch customers were familiar with the brand; the second was the trust given by the construction industry — Bruynzeel was the market leader in the Dutch construction market in 2004; and finally, a proven the track record for the quality, reliability and performance of its kitchens.
Dutch Kitchen Industry
After a period of consolidation in the Dutch kitchen market, by 2005 only three main national manufacturers remained. Bruynzeel was the market leader with a market share of 23% in volume and the second player was half its size. At the time, the Dutch kitchen industry was exporting €300 million to Germany and in turn, German manufacturers were exporting about the same volume to the Netherlands, Wit only. 20 kitchen factories in the country, competition sourced some of its production from one of the 180 active German factories.
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With about 2,000 stores, the Dutch kitchen market was saturated and Bruynzeel’s management wanted to expand sales outside the Netherlands. Being the Dutch market leader was no longer sufficient, judging from the concentration of ‘manufacturers in the European market, it was becoming apparent that the company’s long-term survival and its independence relied upon its capacity to grow.
Bruynzeel’s first attempt to go international was exporting just over the border to Belgium, less than 10 km from its plant. Belgium’s market characteristics were different enough from those of the Netherlands to enable Bruynzeel to have a good first export experience. Unlike the Dutch market, the Belgium market was still very fragmented.Operations & Supply chain management
GUIDELINES TO SUCCESSFULLY TACKLE THE BRUYNZEEL KEUKENS (BK) CASE
1. The development of the retail market is bringing BK some new priorities:
- Shorter order-to-delivery cycles
- Higher service levels (after sales, guarantees)
- Higher product customization
- Smaller production batches
- Specify such new priorities
2. The previous organizational model ʹ which was built around the needs of the construction market
- has to be adapted to the new market. The major changes will affect:
- Production system (MTO, MTS and their alternatives)
- The overall complexity of the offered range (number of variants and codes)
- Product innovation and product development process
- Do you think there are compatibility ʹ even from an organizational point of view ʹ between the needs and logic of the construction channel and the retail channel?
3. More in general, BK should rethink its value chain, and identify its core vs. non-core activities/processes. What are your considerations in this respect?
4. The supply network must be rationalized, through the reduction of its size (overall number of suppliers) and an overall review of existing relationships, following the guidelines of the Kraljic matrix. Key issues to consider are type and degree of integration with suppliers, multiple vs. single sourcing, length of conƚracƚs͕ ƚLJpes of ǀendor raƚing͙ Hoǁ ǁoƵld LJoƵ cope ǁiƚh ƚhese issues. Operations & Supply chain management
