Roy Calcagne Craftmaster
Craftmaster CEO Roy Calcagne says manufacturers and retailers need to be realstic with their lead times when dealing with customers.

Experts: Manufacturers, retailers need to be realistic with consumers on orders

If you would have told Gaston “Gat” Caperton back in January that Gat Creek, his family-owned furniture manufacturing company in West Virginia, would post a 40 percent increase in third-quarter orders over last year, a lot of adjectives would have raced through his mind, almost all of them good. “Thrilled, ecstatic and fantastic are a few of them,” he said last week. “Probably a bunch of others, too.”

But the one adjective that sticks out these days? “Stressful,” said Caperton. “It’s incredibly stressful having to deal with the backlog of orders and working with retailers wondering about orders.”

Welcome to the other side of the global pandemic. Much has been made of furniture retailers enjoying booming business since reopening four months ago, but most of those sales have come from existing inventory. Special orders or items not in stock are testing the collective patience of retailers – not to mention customers who are being given lead times of upwards of 18 weeks.

It doesn’t have to be that way.

“Almost any retailer of any size can control their supply chain,” said Riaz Husein, CEO of supply chain consulting firm Profit Chain. “There’s a belief out there that if you’re not a large retailer, you are at the mercy of your manufacturers for product. That’s not true. There are ways to figure out how to get product faster.”

HFA webinar to discuss supply chains

Husein and Garret Bowman, president of Gulfstream Shippers Association, will help unravel some of the challenges of having a smooth, flowing supply chain during the pandemic in HFA Live’s Oct. 22 webinar. They’ll also show furniture retailers how they can cut down lead times and get product faster. “One of the myths of supply chain is only the big players, the Top 100s, can get orders fulfilled quickly,” said Husein. “That’s simply not the case if you know what you’re doing. We’re going to show large and small retailers a strategy that works.”

Gat Caperton
Gat Creek Furniture President Gat Caperton is opening a second plant to keep up with demand, but the company is still telling retailers orders are 18 weeks out.

Before the pandemic, many retailers began relying on product from Vietnam after the Trump administration imposed tariffs on goods imported from China. That sudden change, coupled with the influx of orders from retailers after stores reopened following months of state-enforced shutdowns, has hit manufacturers and Vietnam especially hard. Craftmaster President Roy Calcagne said it’s understandable that Vietnam has been slow to respond. “They just don’t have the infrastructure in place to accommodate that kind of surge so quickly,” he said. “There’s going to be some natural growing pains before things are a lot smoother in terms of production and delivery.”

Craftmaster assembles upholstered sofas and chairs. It does a healthy load of business in Vietnam, importing upholstery and exposed sofa and chair legs. Calcagne said his company’s delays aren’t as drawn out as others, in part, because the volume Craftmaster has with the manufacturers it works with gives them priority for shipping.

Caperton doesn’t have to worry about imported goods. Gat Creek has been manufacturing American-made beds, chairs and tables from Appalachian cherry trees and sending them across the country since 1996. But that doesn’t mean Gat Creek is meeting its orders in a timely matter.

The company just opened a second plant in West Virginia to handle the demand and is looking to eventually add six production lines, but expansion doesn’t necessarily mean a quicker turnaround on orders just yet. New employees must be screened, hired and trained. Their skills need time to develop. Caperton estimates it takes six to eight weeks in training for Gat Creek to increase production by 5 percent. “It’s not just flipping on a switch and suddenly you’re at full speed. It takes time,” he said.

For now, Caperton and Calcagne are telling retailers not to sugar-coat the existing supply issues to their customers. For their part, both men say their companies are offering realistic lead times on orders. “Customers need to be told up front what to expect,” said Calcagne. “If the retailer promises something we can’t deliver on, or we promise something unrealistic ourselves, both parties end up looking bad with the customer.”

 

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