Capping a year of strategic reorganization, Hickory Springs Manufacturing Company changed its name to HSM last May to underscore a shift it had made in focus.
Long known as one of the country’s most comprehensive suppliers of component parts to the bedding and furniture industries, the Hickory, N.C.-based company has repositioned itself as a provider of market-based integrated solutions and components to manufacturers in a variety of industries. The comprehensive reorganization included restructuring the company’s business model, realigning executive responsibilities, consolidating brands and divisions, and an aggressive rebranding effort.
“HSM is not just a name, it’s a new way of thinking,” says President and CEO Dave Colburn. “HSM represents one name, one identity, one voice and one company with a single-minded dedication to customer needs.”
Executive Vice President & Chief Marketing Officer Dwayne Welch says that the 69-year-old company has truly undergone a transformational change.
“We knew we were a strong and viable company, but we also recognized that for a company our size there were some disconnects,” says Welch. “We decided to take an honest look at what had to be reorganized or shifted to grow the business. We looked at how we were approaching the market with each of our categories. We’re so different from our competition because we have such a vast product line. Although we had always worked to bundle products, each of our locations actually focused on maximizing its own sales.”
Welch says company executives concluded that a decentralized structure was working against the innovative solutions-based approach that they believed would best serve customer needs. To counter that, they created four new business units: HSM Bedding Solutions, HSM Furniture Solutions, HSM Transportation Solutions and HSM Diversified Solutions, which currently services the healthcare, packaging and government markets.
The creation of business units has allowed HSM to take a broader look at the products it sells.
“We had been separately focused on springs, foam and fiber,” says Rick Anthony, director of sales for HSM Bedding Solutions. “Now we are taking all of our product lines and putting them under one umbrella.”
All business unit sales directors work closely with a corporate sales department, headed by Corporate Vice President David Duncan.
“The sales force (under Duncan) is now challenged with selling all products instead of silos of products,” says Todd Councilman, vice president of HSM Bedding Solutions. “Our change to business units and close collaboration with the corporate sales, manufacturing, and innovation and technology groups has allowed us to develop and launch new strategies. Connection, collaboration and communication will be the key to our success.”
Bedding manufacturers have already recognized how the company’s transformation can benefit them, Anthony says, noting that an integrated solutions approach can play out in a number of ways.
“It can be as simple as taking three or four product lines and putting them on one truck for just-in-time delivery, or combining subcomponents into new subcomponents,” he says. “We are also putting our components into finished products like adjustable beds or bed builds that allow OEM customers to create multiple products.
“There has been immediate enthusiasm from our customers, because the benefits are clear,” continues Anthony. “The transition allows them to take advantage of all of our expertise and allows us to interact with them in different ways.”
To provide customers with access to the latest materials and manufacturing techniques, HSM has consolidated and expanded its research and development functions. The company’s 40,000-square-foot Corporate Innovation and Technology Center (CI&T) opened last year, and a 10,000-square-foot foam tech lab is currently under construction.
The $1.5 million foam tech lab will expand the operations of the company’s Conover, N.C. foam complex by enhancing its ability to formulate foams, incorporate new pilot lines and improve testing capabilities, company executives say.
The expanded CI&T Center is home base for design teams that include about 35 program managers, engineers and R&D directors, who are aligned in groups with individual business units. It also houses testing equipment, pressure point and heat mapping technology, and a 3D printer for creating prototype parts. Showrooms and conference rooms are available to customers and vendors for collaborative work on new products, programs and services.
To manage the innovation process, HSM has adopted a procedure it calls Adaptive Innovation Management, or A.I.M.
“Its purpose is to bring a disciplined process to every new product,” says Welch..“Each potential product goes through five phase-gates that include discovery, product requirements, concepts, prototype and launch. Each phase includes a ‘go,’ ‘no go’ or ‘redirect’ decision on the product.”
Councilman says that mattress manufacturers have been quick to share their wish lists with the company.
“Their highest priority is for something new,” he explains. “They’re starving for innovative products and innovative designs for products. Cost control is a given.
“The science of sleep is also becoming more important to our customers,” he adds. “Instead of looking at the surface of the bed, they’re digging deeper. They’re looking at the components that offer the proper controls, pressure mapping and thermal regulation. It’s a composite evaluation based on a composite feel.”
Joint ventures, partnerships and acquisitions help HSM to address these requests. E & R-Hickory and Spinks Springs signed a joint venture last spring to manufacture and distribute Spinks’ micro-coil springs throughout North America. Spinks Springs is a subsidiary of the United Kingdom-based Harrison Spinks group of mattress makers, while E & R-Hickory is a joint venture between HSM and Elson & Robbins/Wade Spring, a manufacturer of bedding and upholstery spring interiors that is also UK-based.
The new joint venture agreement allows the two companies “to leverage HSM’s manufacturing expertise and Spinks’ patented technology,” says Anthony.
Sold as PosturfilHD, Posturfil and Flexcore, the springs range in height from .75 inches to 2.5 inches and can be layered in a variety of configurations “with natural materials and foams to offer different feels,” Councilman says. A fully breathable version of Posturfil will be available in 2014.
A partnership with Latexco, a Belgian company, allows HSM to collaboratively develop latex formulations that meet its bedding customers’ needs. The acquisition of the C.E. White Company in January 2013 also augments HSM’s ability to create seating assemblies for the automotive, commercial transit, school bus and marine craft markets.
“We have a lot of companies who would like to partner with us and we always take the time to listen and to vet them out through our CI&T Center,” says Welch. “We don’t want to miss a thing. If there is an opportunity out there that will make our customers more successful, we want to find it.”
Adjustable bed bases are the first new fully-integrated products that HSM has developed for the bedding industry. Its first two models, a base unit and a customizable upgraded model, will be launched this month. A third model will be available early in 2015.
HSM is also re-emphasizing the value of integrated bed builds to small- and medium-sized mattress manufacturers.
“Our CI&T Center provides a stress-free environment for a manufacturer to design and build mattresses any way they want to,” says Councilman. “They can actually feel it and make sure that it’s exactly what they want to take to market. We can go as vertically as they like, from the gut to the cover. We build the product, control the quality and stock material for them. They don’t have to stock inventory, because we can ship it fully assembled.”
HSM executives are banking on the bedding industry to propel a significant amount of the company’s growth over the next five years.
“There’s a huge consensus for resources and strategy to be put into the bedding business unit, because it’s seen as one of the top opportunities in the company,” says Anthony.
HSM’s sales to the bedding industry have grown by 10% to 15% each year for the last five years.
“I don’t see that changing over the next three to five years,” Anthony adds. “In fact, our enterprise change should allow us to meet that goal in a far more efficient manner.”
Welch also sees a high potential for growing sales to the bedding industry.
“We are hyper-focused on bringing several new products to market in time for the ISPA EXPO in March,” he says. “There will be new twists in all categories, including adjustable beds, foam and springs. We will also highlight our ability to bring all of these things together to create solutions.”
Company executives also see the bedding industry as a vehicle for expanding HSM’s global presence.
“We’ve had modest growth internationally, but we’ll get there through innovation and great design,” says Welch. “When we design product, it’s not just for the domestic market, but how it will play internationally.”
The company also points to a number of strategic advantages that bode well for growth. Councilman sees the company’s multiple locations as a key advantage.
“We can pour foams to whatever specifications in all of our locations,” he says. “This allows customers of all sizes to get consistent product all over the country.”
“Everything we manufacture is produced in the United States,” adds Anthony. “Advancements in technology mean that the delta to produce in the United States is not nearly as wide as it once was. Inventory, cost controls and product life cycle are easier for our customers to manage.”
Much has changed since Parks Underdown founded Hickory Springs Manufacturing Co. in 1944 to fabricate small metal products. HSM now has 2,800 employees in 51 locations throughout the United States. It also operates a plant in Shenzhen, China, that produces recliner mechanisms. Plans are in the works for opening two or three new locations in 2014, and expanding the company’s reach into new business arenas is also being contemplated.
“I can’t tell you how much fun we’re having,” Welch says. “All of the dots are beginning to connect and we’re finding new dots all of the time.
“We have to remind ourselves that this is a marathon, not a sprint,” he continues. “But believe me, we’re sprinting all of the time to maximize all of the potential we’ve found in our restructuring.”