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CastlerySupply chains and logistics were thrown into chaos during the pandemic, creating a number of challenges including trade disruptions, port congestion, and soaring freight rates.
Brands selling and manufacturing furniture especially felt the strain caused by these delays. Delays and cancellations led to backlogs. Port bottlenecks emerged.
But not all retailers were affected in the same way.
For furniture brand Castlery, long lead times are one reason supply chain management has always been a priority for the business.
&#;In furniture, where the products are not only bulky but non-standard size, efficient supply chain management is critical to ensure a seamless customer experience in terms of fulfillment and timely delivery,&#; said Declan Ee, Castlery&#;s co-founder.
The past two years have been challenging for the furniture retail industry, and many manufacturers still haven't caught up with their backlogs. In light of this, retailers are now finding clever ways to adapt to these new situations and overcome the ongoing supply chain crisis.
While other business verticals moved quickly to air freight, the bulk, weight, and size of furniture made that option unviable for most merchants.
Instead, manufacturers look to set up facilities in close proximity to minimize shipping costs and delays. In fact, the US factory activity reached its highest level in nearly two and a half years at the end of .
Cementing new partnerships is a good way to prepare retailers for unexpected supplier delays. At the onset of the pandemic, digitally-native furniture brand Interior Define worked to partner with service providers so their customers won&#;t have to deal with resulting hassles and frustrations.
&#;The recent challenges further reinforced a need to plan ahead for any eventuality, to ensure we&#;re working with the right partners, and to build in the flexibility to source products closer to home,&#; said William Savage, Interior Define&#;s Chief Supply Chain Officer.
Another way Interior Define resolved pandemic-related transportation and logistics issues was by creating a rapid, on-demand product development process that removed the need for storage.
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With this data-driven approach, the brand is able to set a one to six-month cycle for its customizable furniture options covering product development, launch, feedback, and modification.
Expanding warehouses is another way to prevent supply chain disruptions and meet customer demands at scale. Castlery recently opened a new 100,000 sq. ft. facility in New Jersey in hopes of creating a buffer against future supply chain bottlenecks by stockpiling goods.
And they&#;re not the only one. According to CoStar Group CSGP Inc., the top 25 U.S. retailers acquired 38 million square feet of industrial space in .
Decentralized warehouse facilities set up in key locations can also help furniture brands achieve faster delivery times instead of relying on 3PLs to speed things up.
Will these supply chain issues eventually dissipate? It&#;s too soon to tell. However, the furniture industry has long struggled with delays. The pandemic only brought these issues into sharper focus.
Technology and a creative approach to steer clear of supply chain and logistics nightmares can help the industry satisfy the needs of consumers with the shortest lead-times possible.
While it may seem like a distant memory now, we all remember when the US Government announced a two-week closure of all &#;non-essential&#; businesses to try and halt the spread of a global pandemic in March of . Organizations nationwide were in shock, and many home furnishings retailers were restricted from opening while mixed-product retailers that sold appliances were deemed essential. A bit of a crisis was setting in for an industry that relies heavily on in-person sales and relationships. How would the furniture industry stay afloat?
Initially, this shutdown saw some factories raise prices while others lowered prices to stay in business, and retailers reached a standstill while the long-term effects were still yet to be understood. From virtual learning and working remotely to canceled vacations and get-togethers, everyone was now spending more time at home. However, there was light at the end of the tunnel.
As the weeks passed and the threat lessened, retail stores reopened, and sales in the home furnishings sector skyrocketed! Consumers realized that they would be spending significantly more time at home, so they wanted to create more functional living and working spaces. This meant purchasing furniture for home offices or possibly upgrading existing pieces in living rooms, dining rooms, and bedrooms.
What resulted was a massive need for products and a supply chain that went from average (before March ) to not functioning (March &#; April ) to unprecedented demand (May &#; March ). Factories resumed work amidst newly distanced production lines and attempted to manufacture in unknown conditions to meet this surge in demand.
Graphic: Furniture industry EDI Transactions through Covid-19 supply chain woes
The period of time between May and November displays the challenge of backlogs caused by the pandemic, showing a drastic increase in Purchase Order (PO) Acknowledgments. Many retailers saw their orders being pushed back for weeks or even months at a time. The stress on the furniture industry was felt throughout the entire supply chain, with retailers taking on the brunt of these delays.
The furniture industry is known for having multiple PO Acknowledgments per PO, with an average PO receiving four different acknowledgments. However, this increased to around twenty acknowledgments per PO during this time, causing unprecedented delays and confusion. Because of the &#;big and bulky&#; nature of furniture products, shipping times can change frequently throughout the life of the PO to Fulfillment.
Along with these delays, the scarcity of raw materials resulted in a lack of finished goods to meet the new demand expectations. Home goods manufacturers were scrambling to procure materials and recognized a need for enhanced visibility throughout their supply chain processes.
Furniture retailers are looking for ways to improve their supply chain operations and adapt to new market trends. To succeed in today&#;s competitive market, retailers and manufacturers need unified commerce solutions that increase visibility, accelerate delivery times, and drive efficiency.
Additionally, data holds immense significance not only on the supply side and B2B operations but also as it relates to online selling, where omnichannel processes are gaining importance. Retailers now face the challenge of managing processes in an increasingly virtual environment.
Leading furniture retailers are investing in technology that provides them with clean, rapid, and precise data. They understand the changing consumer buying patterns, and rather than being swept away, they aim to ride the wave of transformation. As consumer behaviors continue to shift, adapting to these changes is the only way forward.The good news is that TrueCommerce Home offers technology solutions that can help retailers regain control of their supply chain and scale their businesses. From EDI, which allows the seamless exchange of important documents and transaction data, to drop shipping, allowing retailers to expand their product offerings without the added cost of warehouse, TrueCommerce Home provides the integration and automation necessary to meet the demands of the new supply chain reality. For more information, contact us to book a free demo and see how you can optimize your home furnishings supply chain today.
About the Author
Seth Weisblatt has over 20 years of experience in the home furnishings industry. He is currently the Director of TrueCommerce Home at TrueCommerce, where he oversees the home vertical within TrueCommerce platforms and provides digital integration solutions to key suppliers. With a passion for the furniture industry, he owned and operated a successful retail store in Fort Worth, Texas, transforming and modernizing the &#;mom-and-pop&#; retailer into a regional powerhouse. Seth also led the home furnishing division for a national buying group, consulting with hundreds of furniture brands and retailers. Additionally, he served as the VP of Digital Marketing for the world&#;s largest furniture manufacturer, Ashley Furniture.
Seth resides in Plano, Texas, with his supportive wife, two high-energy dogs, and four incredible children. When he&#;s not telling dad jokes or driving the oversized dad-bus (SUV), Seth is likely in the kitchen putting together an over-the-top meal or on the road, enjoying the chance to create new memories and chasing sunsets.
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