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Industry Analysis

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The field trip made to the factory that manufactures furniture was most interesting and informative. The factory focuses on manufacturing high-end furniture that is characterized by the quality of its finishes and the elegance of its design. I was impressed to find that even though the factory was modern, the use of advanced, automated machinery was limited. Instead, there was a large team of carpenters and woodcraftsmen working directly on the furniture that was being produced. This being said, the first thing that I noticed is that the factory was almost exclusively devoted to wood in producing furniture. Other materials such as metal (mostly (bronze) and glass were also used, but the most important material in all finished work was high quality crafted wood. Naturally, the craftsmen had all kinds of tools to work on the wood, including screwdrivers, saws, cutters, and chisels. High precision machinery was used in cutting the wood in order to guarantee accurate measurements, but apart from that the furniture was hand crafted (this being a trademark characteristic of the factory’s produce).

Second, when analyzing the labor employed I found that apart from the highly skilled wood craftsmen that worked at the factory, there were also specialists, “i.e. forestry and agronomy engineers” (European Union, 2002, p. 15). There was also managerial labor, of course, to complement the highly skilled labor that took charge of production and operations (management was mostly in charge of procuring materials, engaging the labor force, and managing the factory’s finances and sales).

Finally, in discussing overhead costs, I believe that these would cover utilities (especially electric power), equipment and infrastructure depreciation, maintenance and cleaning personnel, material handlers, supplies, insurance, property taxes, and safety/environmental costs (as working with wood does have an environmental cost associated to it). All of these expenses are indirect manufacturing overhead costs, as they must be allocated proportionately to each piece of furniture that is produced. 

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