MEMO

To: Dr. Hugh Jack

From: Matt Remelts

Subject: Steelcase Tour

Date: 4-1-97

Our tour of Steelcase on Tuesday, April 1st, revealed a very versatile company. They are the largest furniture manufacturer in the world. I believe we must consider them our top contender for the contract. They provide in-house engineering and manufacturing services of accurately formed and assembled office furniture. Steelcase is a remarkably vertically integrated company. They have a hand in the whole manufacturing process from design to shipping of the finished product. They also have a worldwide customer base and overseas manufacturing services.

We toured the Systems One plant, which covers 20 acres under one roof. In this particular plant, work surfaces and file pedestals are the main product. Chairs are manufactured in an adjacent plant. In the Systems One plant, coil stock comes in the front door and is inventoried in the coil pit. Since they now operate on a JIT type delivery, the pit is only about one layer full. Before going to this delivery, our tour guide reported that the inventory reached half way to the ceiling. From the coil pit, some of the stock goes directly to the presses where it is blanked, stamped, and formed. In other cases, it goes through an operation in which the coil is straightened and cut and then brought to the presses so that they must pick each individual blank from a pile. In a separate operation, smaller parts are punched from a large sheet of metal on a CNC punch press or a laser cutting operation.

From the forming operation, the parts move to the welding stations. It is here that the individual parts are put into a subassembly that will either get shipped by itself or be incorporated into a finished product. The welded assemblies are then sent to be painted or powdercoated. The painting operation is the area that has received the most attention of late. Steelcase offers about 1500 different paint color options. This is an operation that is extremely inefficient. The overspray recovery is only about 10%. All that is not used is wasted. The alternate method is powdercoating. Over 90% of the material used in this operation is recovered and used again. The powder is electrically attracted to a charged part and then baked onto the part in a sequential operation.

The final area of fabrication is assembly. The painted parts are sent to the assembly cells and appropriately interfaced with the necessary subassemblies. Before the product goes out the door, it is packaged or blanket wrapped and put on a truck to be delivered to the customer.

All in all, from these observations, I believe that Steelcase should be seriously considered as a potential supplier. They are a company with a wealth of experience and the market to prove it. They supervise all areas of design and manufacture and turn out a quality product as a result.