Manufacturing companies have faced a slew of challenges as a result of supply chain backups, labor shortages, competition from China and COVID-19 mandates, but Virco Manufacturing Corp. is humming along on all cylinders.
As the nation’s largest manufacturer of school furniture, the Torrance-based company raced to keep pace with the demand as schools reopened. That might seem counter-intuitive, as most classrooms are already outfitted with desks, chairs, file cabinets and other needed equipment. But another factor figures into the equation.
“There is a huge backlog of deferred maintenance on buildings and with furniture,” Virco President Doug Virtue said. “They need to replace things and many school districts are using stimulus funds to do some of that. There’s also a lot of new school construction going on.”
Those factors have combined to give Virco a hefty sales boost.
“We’ve had a nice sales increase this year compared to last year when we were down 20% because of COVID-19,” Virtue said. “We’ve made all of that up and we’re now slightly ahead of 2019.”
Virco ships about 3 million products a year, including desks, chairs, file cabinets, bookcases and tables, among other items. During its more than 70 years in business, Virco has shipped more than 60 million chairs.
Made in the U.S.
The company’s products are 100% designed, manufactured, and assembled in the U.S. Virco operates a 550,000-square-foot facility in Torrance that includes 300,000 square feet of manufacturing space, a 200,000-square-foot warehouse and 50,000 square feet of office space.
The company employs about 800 workers, including 250 in Torrance and 550 in Conway, Arkansas, where additional manufacturing and distribution operations take place out of a 1.7 million-square-foot facility.
“That facility handles the other two-thirds of the country, and everything west of the Rockies is served by Torrance,” Virtue said.
Virco’s domestic-based business model gives the company a leg up over other manufacturers that rely on overseas shipments of merchandise, said Bob Phibbs, CEO of The Retail Doctor, a New York-based retail consulting firm.
“We’re going to see more companies return to the U.S. for that very reason,” he said. “It gives you much more transparency in the supply chain so you have more control. You know with more certainty where products are and how long timelines can be.”
Labor shortages and delays in shipping have prompted retailers like Walmart and Amazon to charter their own cargo ships in hopes of gaining more control over the process, Phibbs said.
And Virco?
“The supply chain backups are affecting us a lot, but we’re doing a lot better on incoming orders than we did in 2020,” Virtue said. “Our factory output has actually doubled, which is a great testament to the skill of our employees.”
A family-owned business
Virco has been led by three generations of the Virtue family, beginning with grandfather Julian Virtue who founded the business in 1950. Doug’s father, Robert Virco, is the current CEO and sister Kathy Young serves as sales manager.
Andrew Virtue, Doug’s brother, is not an official company employee. But he has served as a design consultant, pushing Virco to offer a more diverse palette of colors to America’s schools, starting with the release of the ZUMA product line in 2004.
“When I think about the visual impacts our company has had on the classroom environment, color is among the most important and he deserves credit for this,” Virtue said.
The ZUMA line includes a rocking chair that’s designed to offer ergonomic support while also providing flexibility of movement.
“We found that it helps students with autism and attention deficit disorder,” Virtue said. “We work with occupational therapists and there is apparently a healthy link between gentle movement and engagement in the mental process.”
COVID-related school closures didn’t stop orders coming in as Virco expanded its consulting arm to provide expertise on safe back-to-school classroom layout and design options that meet COVID-19 safety protocols. The company says it’s on track for significant growth in 2022.
Virco’s primary customer base is education, including K-12 schools, community colleges, and four-year colleges and universities, as well as trade and technical schools. It also supplies furniture and equipment to convention centers and arenas, meeting facilities, government offices and places of worship.
Virco has opted to keep its operations in the U.S. for two reasons — worker loyalty and the costs involved in shipping furniture from overseas. Nearly 40% of the company’s workers have been with Virco for more than 20 years.
“We’re family,” Virtue said.
In regard to shipping, Virco’s products aren’t necessarily a good fit, the company said.
“Our furniture is big, bulky and highly seasonal,” Virtue said. “It’s a very poor profile for ocean-freight importing because of the relationship between the cost of getting it across the ocean and the selling price of the products.”
Phibbs said the nation’s supply chain will likely return to normal by the middle of 2022, although there’s no guarantee.
“People who have left the workforce have left,” he said. “That’s going to impact the supply chain for a while. This isn’t a temporary thing.”