Sales orders are scheduled for seven years in advance
Contemporary enterprise built on empty site near Mogilev in just over a year
By Pavel Mezinov
Although the construction works are still in process, VMG Industry has already begun production of bedroom suites from MDF board. It might seem strange for foreign investors to be interested in yet another furniture producer, since it’s already a crowded global market, but, despite sharp competition, VMG is already set for success.
The secret lies in its well-planned strategy, as used by some other domestic enterprises. Rather than producing goods with hope of future sale, which can lead to stockpiling at warehouses and cash flow problems, VMG is manufacturing ‘to order’. The company’s technical director, Victor Shorikov, tells us that his enterprise has seven years of orders already, ensuring that all start-up costs are covered.
He explains, “Over a set period of time, we need to produce a particular number of bedroom suites, so we know exactly what schedule to use to fulfil orders in time. We don’t need to concern ourselves about demand and future sales since every item already has a buyer and price, allowing us to plan our expenditure in advance. We know how much we can afford to pay for raw materials, so can find suppliers to meet our requirements, and can calculate how much we can afford to pay our workers, without any risk of future disappointment.”
According to Mr. Shorikov, this strategy also allows the enterprise to calculate the number of people it needs to employ, ensuring efficiency in every aspect of production; the number of employees is optimised perfectly. At full capacity, around 900 people will be needed, including 45 on the technical side (5 percent of the total — much fewer than is usual).
The factory is using contemporary machine-tools, controlled automatically, via online technology, allowing problems to be solved within a few seconds. Clearly, this saves time and money. The enterprise is breaking with established stereotypes and is happy to share its innovations and experience, to help other companies improve their efficiency.