Cabinet Making & Panel Processing optimised for System 32, CAD/CAM, and Smart Manufacturing Integration.

What is the volume size of the Indian furniture industry?

Despite being 85% unorganised and working on-site, the Indian furniture industry's growth potential is promising and exciting. With an estimated 0.5% contribution to the GDP, which translates to around 1.5 lac crore per year in a 3.9 trillion dollar economy, the future is indeed bright. As our per capita income reaches a mid-level, our industry’s market share is projected to increase fourfold, ushering in a new era of prosperity.

As a national extension, how do we compare the furniture industry to the construction industry?

If we subtract the cost of land from the construction cost, the construction costs just 1200-1500 psf and has a life of 50 years, whereas the interior costs 2000-10000 psf and has a life cycle of 3-5x in the same 50 years.

The furniture industry is transitioning from working on-site to working in a workshop, a shift necessitated by the inefficiency of on-site work. However, this transition has its challenges. The artisans, mostly migrants, charge 1.5-2 shift salaries to sustain living costs in urban areas. Moreover, housing societies often prohibit site work from 2-4 pm or on holidays, leading to a situation where the cost of labour continues to accrue for the contractor, but production halts. Additionally, the cost of waste is significantly higher when working on-site compared to a workshop. These challenges underscore the need for strategic solutions to facilitate this transition with low-cost automation and ensure the industry's continued growth.

The shortage of skilled manpower is not just a pressing challenge for our industry; it's a critical issue that demands immediate attention. Understanding the number of skilled people required and the growth trajectory is crucial, and it's the key to our future development. What is your estimate of the numbers?

The thumb rule is that the labour market will grow at 1/3rd the GDP. If we grow at 7.5% pa, we will need 2.5% growth in labour. But the population growth is 0.8%. This means there is a deficit of 2.5-0.8=1.7%. 1.7% of 1.4 Billion = 2.4 cr is a shortage of labour/year. Assuming the industry is 0.5% of the GDP and people join the industry in the same ratio, we need 1.75 lac people, and the deficit would be 1.2 lac even after population growth. Labour in India is cheap, but skilled labour is expensive. If we do not plug this skill gap, there will be poaching within the industry, and the skilled labour cost will increase, but the value addition will be zero. As the cost of labour increases, so will the selling price. Our competitors across the borders will offer a cheaper product, and all the Indian manufacturers and industries will lose.

The shortage of skilled manpower in our industry is a pressing issue that needs immediate attention. To meet the industry's growing needs, we must focus on scaling the training process and building a robust pipeline of skilled labour. How do we achieve this?

We need to build a pipeline of skilled labour. Unfortunately, the trainee cannot invest much in training, nor is our industry glamorous for the artisans to self-mobilise. So, the skill has to be a government-led or industry-led initiative. You can have 60 trainees in a classroom in soft skills, but 10-20 should be the number in hard skills, as the training needs to be practical. You cannot have one student using the machine and the other nine standing and watching him do it. This will not lead to quality skilled people. We need more machines, batches, multiple centres of excellence and multiple ITS and NSTIs participating in this initiative. We need 30 days per student and a batch size of 20 students per month/training centre = 240 / year. In that case, we require 750+ training centres for orientation, skilling, upskilling, advanced training and conducting skills competitions.

Building a hub (COEs) and spoke (ITIs-NSTIs) ecosystem is part A, and compiling content and hiring the best trainers is part B. In part B, the best trainers are highly paid consultants. If the industry brings more members, this can bring revenue to the council. With every 1000 members @ 10000 / year, we will collect an additional 1cr. This is a good amount to buy the person-days, take services from the best consultants and trainers, digitalise the training, upload it to FFSC’s YouTube channel, make a library of the videos, and give access to the paid members. This will help us scale the training help in the training of the trainers, and both the trainer and the trainee can access the advanced training videos till they are members of FFSC and as and when required. The basic training videos can be free. 

The assessment, in theory, can be digitalised, with a Q&A at the end of the video and a digital certification. This will be a preliminary exam for the trainees before they appear for the practical and classroom tests.

Understanding the gender distribution in our industry is not just important, and it's a necessity. We need to ensure that our industry is inclusive and provides equal opportunities for all, regardless of gender. How do we increase women's participation in our industry?

In our previous generation, most women were homemakers; in our generation, few started to work, but in the next generation, women are educated and empowered and will not sit at home as the opportunity cost/loss will be very high if they do not work.

Earlier, woodworking was a man’s job, as using a hand saw to cut wood required strength. These days, with machines, we can allow women to participate in the industry. They are equally efficient and more stable, which will contribute to the GDP. 

With the significant market moving to cabinet-making / panel processing, the training can be function-based rather than mastering the entire process. This will reduce the learning curve and increase the pipeline of skilled labour.

We just need to take care of safety and hygiene. Women's workforce participation can considerably increase the pipeline of skilled labour and keep us competitive. 

How can the Skill India initiative, a government-led program aimed at skilling India's workforce, help us in exporting services?

When we manufacture a product, the gross margins or value added are around 35% on sales, but when we export our services and remit the savings back to India, the value added is 100%. This export of services is a high-value job and can contribute to the exponential increase in GDP. However, we need to adapt to international nomenclature and training standards.

A cabinet maker works with panels and makes a modular kitchen and wardrobe. A joiner makes chairs and dining tables, and a carpenter makes wooden structures, staircases, etc. We must adhere to this. Otherwise, our certificate will read wrong, and we will lose weight in the international job market. 

If business services like IT, consulting, and banking can be exported from India, we can also export design, engineering, rendering, optimisation, costing and supply our services to the world. We must learn, adapt, and practise international/country-specific health and safety norms. We must train our workers at global standards to take a right from site measurements, do basic maths, design or read design, build, optimise, learn manufacturing processes, surface finishing and installation. In addition to process skills, we need to train on soft skills like communication, commercial, and computer skills, which will make the trainees industry-ready. 

By aligning our industry's training standards with the international market, we can enhance our competitiveness and increase our share in the global furniture market.

What should the factory owner's strategy be?

Smaller workshops should have a Value-based strategy. Large-sized workshops should have a volume-based approach. 

Value-based means the batch size is one; designs are innovative and customised; machines are effective with low set-up time and high gross margins. Once you have achieved the value, move towards volume. Suppose we integrate local artwork up to 5-10% machine-made. In that case, we outperform both China and Europe as China is not interested in low volume, and in Europe, handmade is unaffordable. If we make small value additions like removing the sharp corners in furniture design, then it requires some effort of joinery. The furniture looks softer, and we reduce international competition.

Volume-based means batch sizes are larger, designs are standard, machines are efficient with low cycle time, and gross margins can be aggressive. Once you have achieved the volume, move towards value addition. The industry is moving from slow cutting to CNC beam saws, high-speed edge banders, and high-speed drilling machines. Customers are asking for low set-up and cycle time. This is where our industry is headed with high-speed cutting, high-speed edge banding and high-speed boring machines.

Cabinet making is a per sq foot business. 8x4="32’" sq feet - 15%  waste = 27 sq feet x assuming Rs 100 psf gross margin = 2700 / board x 300 working days = 8.1 lac per year. This means if the workshop can do 30 to 40, or 40 to 50 or 50 to 60 boards = 10 just ten boards extra / day = 81 lac per year = 6.75 lakhs/month with the same space, labour and resources. This calculation is valid if you have 8 hrs of work. 

The focus should be on achieving both. Don't be in the quadrant where you don't have high volume and do a low-value job, as the risk of failure is the highest in this segment. 

What is the mantra to scale and sustain? 

Like you design furniture, you need to create your 5-year cash flow from where and when the money will come in and move out, 5-year P&L on how you will budget, forecast your expenses and revenue at what gross and net margins, and how will the 5-year Balance sheet look like. Write down the top SWOTs and what you need to do to enhance strength, reduce weaknesses, tap opportunities, and mitigate threats. Who will do it, and when will he do it? Brainstorm, list the risks, and write the solutions to reduce the risks. 

Focus on cash flow to keep the gross margins intact to achieve your net margins, then scale and sustain the growth. This is sequential. If you lose focus on the first step, you will lose operational efficiency and gross margin and thus lose your net margin. If you miss the net margin, you cannot offer growth to the team or scale, leading to attrition and inability to sustain.

What are the suggestions for NEP, MSDE, NSDC, and FFSC?

Make the students learn product design early, as it is the first step in engineering and wood/panel is an easy-to-use and accessible material.

Let all learn the basics of product design, empathy for a problem, finding the cause, ideating a solution, design, engineering, rendering, optimising, prototyping, costing, communication, marketing, and teamwork. This will boost R&D culture, inculcate design thinking, manufacturing process, costing, and marketing, and allow them to master any field of their choice.

The training module’s language should be similar to WorldSkills, which prepares us for India Skills, WorldSkills, and the job market for services, both domestic and export.

The motive of Skill India is not training but jobs and placements. Suppose we can add value with quality training, increase the salary of trained labour, and keep the pipeline for the labour supply. In that case, we can achieve self-mobilisation and keep labour costs competitive in international markets. 

●  Make more members and MAP more carpenters through RPL

●  Train/Upskill the employers and employees through various initiatives

●  Make a standard job description, sort it with a filter on FFSC’s portal, and facilitate placements for the industry. City | Qualification | Experience | Job Discription | Name | Phone Number | Upload/Download CV | Filter-Open for job/Hired