AyA Kitchens and Bath: Change the Game
Manufacturing
By Brian Salgado   
Friday, 21 December 2007
AyA Kitchens and Bath, Mississauga, Ontario
AyA offers custom cabinetry to primarily new home and condominium builders.
When President Dave Marcus founded AyA Kitchens and Baths in 2000, he says he had to start from scratch in a facility previously occupied by Caterpillar in Mississauga, Ontario. What he did bring with him, however, was innovation to a cabinetry industry that has a reputation for accepting change glacially.

By integrating technology, manufacturing and IT, AyA has become a hybrid just-in-time operation with efficiency and customization that the cabinetry industry has not seen in the past. "We blend the best of modern high-tech manufacturing technology fully integrated with old-world craftsmanship and attention to detail," Marcus says.

AyA, which is the Japanese word for "design," is a $35 million company with 180,000 square feet of manufacturing space on 12.5 acres of land. AyA serves primarily new home and condominium builders, but the company recently has grown into the retail sector to serve remodeling projects. AyA delivers its products across Canada and the United States, going as far west as Alberta in Canada and California in the United States.

Adjusting to the Market
The slowdown in the American residential construction industry and the declining value of the American dollar have forced AyA to adjust its strategy for business in the states.

"As a Canadian manufactures, with the slowdown and dollar where it's at, the exchange is hurting us," Marcus says. "The slowdown means we need to expand our base, so we're pulling from new markets."

AyA has shifted its focus in the United States to the higher-end products that produce better margins. Marcus says this means producing cabinets with European flair but better price points for consumers because the shipping fees aren't as high and lead times are shorter. Once customers realize that AyA's quality is comparable to European cabinets, the cost difference and turnaround win out. "Logistically and operationally, it is difficult to import those products," Marcus adds. "We're more competitive and have better turnaround times for installation, delivery and service."

AyA has also refocused its efforts on expanding its presence in the Canadian market. This new focus has shifted AyA's business in the United States from 60 percent of the company's total revenues to just 40 percent.
    
Whether a slowdown is in effect or not, the United States has proven to be a fragmented market based on regional tastes, according to Marcus. Fortunately, AyA has the product breadth and technological capabilities to cater to each region. "Different regions are looking for different products, stylistically speaking," Marcus adds.

For instance, AyA introduced its knotty alder and vintage lines to for the Denver Colorado market, which prefers a more rustic style. Cities like Chicago and Washington, D.C., want modern European designs, but rural regions do not.

New Products
With the slowdown in residential construction, AyA has expanded into closets more than a year ago. Once the housing market returns to full strength, Marcus predicts the closet line will increase revenues by 20 percent.

AyA has also launched its Green Design program, which uses 100 percent formaldehyde-free plywood to cater to the market sector that demands solid wood boxes. These products use a UV-coated veneer material on wood, and they give homebuilders valuable LEED certification points. "This is seen as an upgrade to a high-end box material," Marcus says. In 2008 AyA is anticipating certifying its standard line Forest Stewardship Council, another important element for LEED certification.

The company has also taken part in a quality assurance certification program called Woodmark, which was developed by the University of British Columbia. Marcus calls it an "ISO-type" program designed with the wood industry in mind. Through the program, AyA is now producing 50 kitchens a day. "By implanting Woodmark, it has really allowed us to tighten up our systems," Marcus says. "It has made an enormous difference on key indicators like back orders."
 
< Previous Story   Next Story >