Furniture retailers are enjoying a spike in sales since they reopened stores last summer. But there’s a price for that success: Those record sales are exposing weaknesses on many businesses’ supply chain and logistics operations. Specifically, retailers are seeing room for improvement with their inventory management, distribution and warehousing, and final-mile delivery processes.
That’s where Profit Chain Consulting can help. The Home Furnishings Association’s newest Solution Partner was founded earlier this year to help furniture retailers succeed in an increasingly competitive market – not by just increasing sales, but also by reducing expenses in their business’ delivery, distribution and warehousing, inventory management and customer service operations.
Profit Chain CEO Riaz Husein said there’s no question the furniture retail industry has undergone a seismic change in 2020. “That also means retailers need to be changing their internal structure and strategies,” said Husein. “More often than not, we’re seeing they’re too busy working on sales and merchandising strategies – only to discover their logistics, warehousing and final-mile delivery capability cannot keep up with demand. As a result, customer service is negatively impacted and they lose sales to competitors who have merchandise available when the customer wants it.”
He said many retailers are pushing out customer orders for weeks when such delays wouldn’t be necessary if they had the right inventory management and final-mile delivery systems in place. “We can show (retailers) how to improve their current in-house delivery or expand it without compromising service levels,” said Husein.
Husein said many retailers are considering outsourcing their delivery programs for myriad reasons. They’ve grown tired of worker’s comp claims. The liability coverage is just too expensive. They need more flex capacity to deliver during peaks in demand. Delivery is not part of their core competency. “All of these are very valid reasons for looking at a (third-party logistics carrier),” said Husein. “We can help retailers find the right carrier and negotiate a contract, or improve the current arrangement they have with their existing carrier.”
Inventory management help is available, too
Husein said retailers can also use help with their inventory management. Many retailers hire expert merchandisers who know what to buy, but those same merchandisers are also asked to manage the company’s inventory. “So while they may know what to buy, they might not have the right processes and systems to efficiently manage how much and when to buy,” said Husein. That’s where Profit Chain can save retailers money. By optimally managing inventory levels, retailers can reduce cash tied up in unproductive inventory while at the same time improving in-stock levels. When a business has too much inventory, Husein said, management costs go up – not to mention the possibility of real-estate expenses if a retailer expands its warehouse or leases a new space that just isn’t needed.
Another area where Profit Chain helps retailers save money is through process improvement – especially in distribution and warehousing operations. “Most businesses have developed processes over time,” said Husein, “but when you reevaluate those processes, you discover some are now either redundant on no longer needed. By simply streamlining, you can easily save 5-20 percent in labor costs. This is where we can start saving you money every month,” said Husein.
How much money?
“Obviously, every business is different, but our clients are telling us they’re seeing a good return on their investment with us – most projects pay for themselves within six months,” said Husein. “That’s exactly what we want to hear and why we’re in business.”
HFA members get a special two- to four-day in-store consultation with Profit Chain experts who will review all facets of the company’s business — from sales to inventory management to warehousing to final-mile delivery. There is an approximate 30 percent savings benefit for being an HFA member. For more information on Profit Chain Consulting and all the HFA’s Solution Partners that can help grow your business, go here.
HFA’s Solution Partners have a proven track record of success helping our members. Find out how you can join the HFA.