It’s not much, but furniture retailers can find a sliver of solace knowing they are not alone in the disruption of their supply chains. Main Street mom-and-pop stores to some of the largest global manufacturers have had their worlds upended by the pandemic.
The impact of that disruption can be measured in a new study released this month that found 97 percent of more than 600 supply chain professionals polled experienced a supply chain disruption due to the coronavirus.
In response, 73 percent of these professionals are already planning major shifts in their supply chain strategies for 2021, including supply base expansions and an increase in inventory levels.
Not surprisingly, the home furnishings sector has been forced to reboot and reimagine its supply chain in the pandemic.
“The impact of COVID-19 helped put the entire supply chain in turmoil,” said Craftmaster Furniture President and CEO Roy Calcagne. Craftmaster is an upholstery maker that sources fabric domestically and globally. Calcagne said the company has “had issues with longer lead times for raw materials as well as issues securing container spaces.”
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.
Calcagne, who imports wood sofa and chair legs from Asia, said what would normally take four weeks to deliver is now taking up to 10 weeks due to the shortage of available container space.
Lead times aren’t the only thing going up at Craftmaster. “If we had been paying $3,700 for a container, we are now looking at $2,000 more just to secure a spot on the container ship,” Calcagne noted.
Prices for raw materials rise
Price increases for foam, metal, steel and lumber are another impact of COVID, said Calcagne. “In addition to seeing price hikes now, we will probably see more in the first quarter of 2021,” he said.
Richard Tucker is national sales manager for Shelba D. Johnson Trucking and chairman of the Specialized Furniture Carriers, a division of the American Home Furnishings Alliance. With more consumers staying home and states asking residents not to venture out, the demand for furniture continues to rise.
“The reality, at least for the near term, is that this sudden skyrocketing demand for furniture is resulting in longer-than-normal delivery times,” said Tucker. “And while we are making inroads, this is an issue that is not going to disappear overnight.”
Capacity in the furniture industry is at a premium, he said. “We are asking our customers to understand the reality that delivery times, at least until after the holidays, are probably going to be longer than normal.”
Long before the pandemic hit, the trucking industry was dealing with problems such as driver and equipment shortages. “Our industry has been actively recruiting new drivers and looking for additional equipment, but there is no magic wand that anyone can wave to make these issues disappear,” Tucker said.
Even the thought of rising prices for raw materials was enough motivation for Caroline Hipple, president of upholstery maker Norwalk Furniture. Even before the pandemic hit the United States, Norwalk bought up foam, hardwoods, steel, feathers and fabric – any of the materials it uses to manufacture upholstered furniture. “We made the decision to buy up what we could, so that in the event things got bad, we could keep the factory up and running,” she said.
The move paid off. Norwalk not only enjoyed a largely uninterrupted manufacturing process, but it also was able to quickly transform itself into a local supplier of personal protective equipment (PPE) for a time.
Strengthening relations
Hipple added one of the things that gave Norwalk a leg up during the pandemic: The company enjoyed strong supplier relations.
Despite Norwalk producing at full throttle, Hipple said she sees an inevitable industrywide slowdown in demand “once people feel comfortable going out to eat, taking vacations and traveling again.”
Garrett Bowman, president of Gulfstream Shipper’s Association and a Home Furnishings Association Solution Partner, thinks the industry will be challenged until possibly February or March next year.
Bowman noticed supply chain constraints in early February after the Chinese New Year. “Workers did not return to the factories, which slowed down production. Then, when the COVID outbreak began, many states shut down and we had challenges getting products delivered to the warehouses, all of which resulted in a big lag in terms of delivery of furniture.”
The survey was conducted by Procurious, an online business network for procurement and supply chain professionals, and was commissioned by the Specialized Furniture Carriers division of the American Home Furnishings Alliance.
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