"From trans-oceanic freight to truck driver shortages, from deteriorating domestic infrastructure to last mile headaches, the furniture industry faces supply chain bottlenecks that create a disconnect between manufacturer and retailer abilities and consumer expectations." - Furniture Today Magazine
To address these challenges, Furniture Today and AHFA hosted the 2017 Logistics Symposium at High Point University in High Point, NC.
LeanCor Logistics' Director of Account Management, Ashley Yentz, spoke on a panel focused on clearing supply chain bottlenecks for furniture retailers and manufacturers.
Here are three hot-button areas where Ashley shared some emerging best practices and market-tested strategies:
1. THE GREAT UNKNOWN
FURNITURE TODAY: One of the things that became clear in talking to all of you prior to this event is that you are each in the business of managing uncertainty. Time, effort, and money are spent creating systems, processes and investing in technology; yet each day there is a set of circumstances beyond your control that changes the equation. How do you prepare in advance for the unknown?
ASHLEY/LEANCOR: I think we live in a new reality today, where customer demand is key: our customers want more variety in product, at a faster speed, with better convenience -- and oh by the way -- on-time delivery. The digital supply chain transformation of omni-channel and e-commerce sales has created a cost-focused, lower-margin business model and a demand-driven supply chain. In order to control some of the unknown and start to sense and shape demand quicker we need to:
- Follow guiding principles that support a supply chain and logistics strategy.
- Create highly collaborative supply chains where we understand the strengths and weaknesses of all supply chain partners while teaching and working with them.
- Develop people and plan processes as critical inputs to sustained success.
- Create pull systems wherever possible.
- Reduce lead times to build flexibility and speed so we can react to the unknown faster.
- Build visibility up through the supply chain for real-time (hour-by-hour) problem solving.
2. SPEED TO MARKET
FURNITURE TODAY: The theme of this conference is about increasing speed to market, particularly given the influence of e-commerce on today’s marketplace and consumers. The question you confront each day is "how do we go faster?" If you compare your business today to five years ago, what steps, processes, and modes of transportation have been compressed or eliminated to allow your company to move goods faster? What do you see changing over the next two years to accelerate that further?
ASHLEY/LEANCOR: As logisticians we have to start thinking in economies of time, and where to remove time from our processes. One of LeanCor's furniture customers came to us five years ago and asked how they could compete with a mattress competitor. This mattress competitor claimed to get you your mattress on the same day. By building milk runs and picking up from the supplier more frequently, we could lower on-hand inventory by 37%, increase store delivery frequency by 147%, and get our customers the mattress they wanted by the next day.
3. BIG BOX COMPETITION
FURNITURE TODAY: One of you on this panel has said that, “today we answer to two gods: the god of the internet and the god of big boxes.” Where do furniture stores fit in that equation and what needs to happen for that channel to remain competitive logistically?
ASHLEY/LEANCOR: Speed is king, but I also think it’s important to focus on what Amazon isn’t good at. We know that our customers will always want more variety and quicker / on-time delivery, but they will also want higher quality and in-home product set up. Right now Amazon and Wayfair struggle to compete at higher price points and white-glove delivery service. If we continue to take time out of our supply chain, but also focus on service and customizable products, I think we’ll see a mix of brick-and-mortar and e-commerce supply chains continue to be competitive.
Learn more about strategies for furniture supply chain management:
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