Warehouses: A key link in supply chain
Efficient programs enable sources to fulfill quick-ship promises
By Larry Thomas -- Furniture Today, March 24, 2008
High Point — Quick shipping isn't as quick as it used to be, but logistics experts say an efficient warehouse program can go a long way toward reducing delivery times from a supply chain that stretches to Asia and beyond.
Warehouse management, in fact, may be the key link in that chain as both furniture suppliers and retailers strive to satisfy the consumer's need for instant gratification while keeping retail inventories as low as possible.
"Quick delivery is especially important when times get tough," said Jack Hahn, CEO of Zenith Global Logistics. "I think when cash gets tight, nobody wants to wait 45 days to get their product."
The dramatic shift to imports in recent years has been a boon for logistics services such as Zenith, which has developed a proprietary software program for furniture warehouse management.
In some cases, the logistics provider owns the warehouse. In other instances, the provider will operate a warehouse owned by a furniture manufacturer or retailer.
"We're adding more regional warehouses and cross-docking facilities as demand for our services increases," said Hahn. "We're starting to see a gain in the number of people who are stocking product."
Walter Crump, president of GLC Furniture Warehouse, a cross-docking service in Midland, Texas, couldn't agree more. His company is making more frequent deliveries to retailers, and says merchandise rarely sits in his warehouse more than a day or two after he gets it from the manufacturer.
That means the retailer will have it in his store within a week, since Crump's retail customers in Texas, Oklahoma, Arkansas and Louisiana are all within a three-day drive.
"We believe that you can do this type of operation better if you're delivering from a smaller area like this," said Crump, who has been involved in furniture warehousing since 1957.
Matthew Briggs, president of case goods and occasional furniture importer Four Hands, sees his newly-expanded warehouse in Austin, Texas, as something of a cross-docking facility, as well.
Briggs said retailers increasingly are adopting a just-in-time mindset regarding inventory, which makes it critical for his company to keep a larger in-stock position and replenish its customers quickly.
"An efficient supply chain is one of the keys to doing well in tough times," said Briggs.
He said most Four Hands retail customers prefer to use the warehouse because the company's large product lineup makes it difficult to order full containers directly from its factories in Thailand, Malaysia, the Philippines, Vietnam and Indonesia.
Instead, Four Hands has the containers sent to West Coast ports and then moved by rail to Austin.
"When we get our new automated (warehouse) system running by mid-year, we can process orders in 24 hours," Brigg said. "Our goal is to offer a great array of products that can ship quickly with minimal damage."
That was the same goal set by Magnussen Home when the case goods importer opened a warehouse last year in Ho Chi Minh City, Vietnam, and company officials believe it's being met through its new QuickFlex 500 program.
The program, which takes its name from the 500 cube minimum order size, allows dealers to get mixed container pricing when ordering as few as three to four bedroom or dining room suites.
Don Essenberg, executive vice president and chief marketing officer, said more than 150 dealers already have signed up for the program, and said about two-thirds of them had never purchased case goods from the company previously.
"Interestingly, these are not just small- to mid-size dealers," he said. "We are getting a very positive reception from major regionals who previously felt that if they could not buy a full container of a given style, it was not worthwhile."
Richard Magnussen, the company's president and CEO, said another advantage is that popular groups can be quickly replenished from the Vietnam distribution center since the orders are filled from stock.
"Our goal is to extend the profitability of a strong, sophisticated supply chain management program to all retailers, regardless of their size," Magnussen said. "It also means increased consumer satisfaction."
