Furniture Delivered in Three Days or Less

Raymour & Flanigan
Furniture Delivered in
Three Days or Less
Raymour & Flanigan Manages its Inventory for Customer Satisfaction
T
10 demandsolutions.com
he recently opened Raymour & Flanigan
designed signs around the store and in its sales flyers
Furniture showroom in Paramus, NJ is a
announce the company’s strategy, “Delivery in 3
handsome two-story building with brick on
days or less, guaranteed.” Except for box springs and
the ground level and floor to ceiling glass on the
mattresses—those can be delivered the next day.
second. Inside, escalators make it easy to move
between floors. At 63,072 square feet it stands out
day we talked with Dave Mirabito, Director of
even in Paramus, a town of 25,737 whose shopping
Supply Chain, they were out of 42. The company
centers do $5 billion in retail each year, about equal
runs at a 98.5 percent service level and that, said
to the gross domestic product of Cambodia, as a New
Mirabito, is an everyday occurrence.
York Times reporter noted recently.
For Raymour & Flanigan Furniture, which has
“This commitment to our customers has helped us
been expanding rapidly throughout the Northeast,
grow to become the Northeast’s largest and fastest
Paramus is the 70th store, and the 12th in the New
growing furniture retailer. You can rely on Raymour
York metropolitan area—impressive growth since
& Flanigan showrooms for all of your home
the privately held business was founded in 1947 with
furnishing needs. Our volume buying power allows
a single store in Syracuse, NY.
us to provide you with the finest collection of brand
Paramus, like all the Raymour & Flanigan
name furniture and accessories at the lowest prices,
stores, features a wide array of chairs and sofas
and our state-of-the-art distribution system allows us
in upholstery or leather, armoires, coffee tables,
to guarantee delivery in three days or less (excluding
dining room sets and bedroom suites. Cleanly
special orders)!”
Raymour & Flanigan stocks 2700 SKUs. The
As the company promises on its web site:
Raymour & Flanigan
Demand Solutions
Supports The Promise
“cube” out an order, i.e. fill a trailer to its 3,000 cubic
guide for the inventory planner to use in making the
Behind that success rate is Demand Solutions.
foot capacity. DS RP’s functionality can consolidate
import quantities from vendors and provide a rough
It’s so important that Raymour and Flanigan gives
final decisions on the order on an exception basis.
the software credit on the company’s web site: “At
Raymour & Flanigan Furniture, our models for
determine what should be in each service center.
inventory control help us achieve our commitment
Then we create and review the forecasted demand
to our three-day delivery guarantee. We refined our
in FM. This is then sent into RP and replenishment
delivery performance to pinpoint delivery to our
suggestions are reviewed and managed on an
customers within a two-hour window, and our use of
exception basis along with a little bit of planner
Demand Solutions Requirements Planning software
intuition. Using these results in RP we decide where
has automated our reorder function, allowing us to fill
we send these goods. If we know we will sell six blue
and empty our distribution centers more than 12 times
sofas through Islip, we will ship them directly to the
“We review historical trends for locations and
per year.” The company also uses Demand Solutions’ Long Island service center from the vendor. That
Forecast Management.
costs less, and the fewer times we handle an item the
better off we are.”
Like many retailers in the US, Raymour &
Flanigan imports much of what it sells—60 to 65
DS RP allows us to fill and empty
our distribution centers more
than 12 times per year.
percent of its goods, primarily from Asia. Most of
that comes to American shores by ships that dock
in New York. From there the containers travel to its
Liverpool, N.Y. campus or Gibbstown, NJ distribution
facilities. From Shanghai to the New York warehouse
can take as little as three weeks.
is on display, the showrooms carry hundreds of
“Our transportation group is incredible,” said
Since not all customers are content with what
Mirabito.
furniture covering samples. The result is 300 to 350
special orders a day across the chain, or about 10-15
To keep furniture close to customers, the
company operates a second distribution center in
percent of the company’s business.
Gibbstown, NJ in addition to its headquarters facilities
in the Syracuse area. It also has 15 customer service
explained Mirabito, “we expect special orders as a
centers where it maintains additional inventory closer
percentage of the business to drop to 10-12 percent
to customers to ensure it can make that three-day
because we will carry the coverings that customers
delivery guarantee.
want.” Special orders typically take six to eight
weeks.
Demand Solutions sits in the middle of this hub
“But as we grow the number of SKUs,”
and spoke distribution system.
“We take the demand we have built for an item
quality furniture at low prices, it can’t afford to make
and in DS RP we create records for each service
inventory mistakes that lose customers who will drive
center location and space demand based on market
to the next store looking for the item they want or just
demand,” said Mirabito. The software assists in
go home and forget about new furniture for a year or
getting the products in demand closer to customers
so. Nor can it afford to carry a lot of inventory that
and distributes inventory across the service centers.
just sits, tying up capital and warehouse space.
Inventory control also allows the company to
For Raymour & Flaigan to compete on high
“We feed information into the system and we
plan its shipping and make the best use of square
have to make sure our lead times are accurate,”
footage at each service center. The supply chain group
Mirabito said. “We have a lot of confidence in the
has begun exploring ways to use order queuing to
ordering system. Once we put information into it we
DS Magazine
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Raymour & Flanigan
Raymour & Flanigan is proud to carry three Cindy Crawford suites.
“When it comes to decorating, do you want people to think you have great style, or you’re smart because
It’s beautiful, sensible,
inspired…a perfect blend of fashion, design and real value.
you saved a lot of money? With my Home collection you get both.
As for the price? Who needs to know?”
—Cindy Crawford
know the numbers that come out are good.”
the factory just before the festivities begin.
When an item is out of stock, sales associates
sofas today for arrival three weeks from now?” asked
isn’t available in three days, the associate will show
Mirabito. “Paul Secraw, from Demand Solutions
them similar pieces that are in stock, or check the
was integral in teaching us what the system does. We
GERS retail system to learn when the next blue sofa
have made changes in the way we forecast and now
they want will be available. Raymour & Flanigan
we are getting better information into the system.”
trains sales staff for 350 hours their first year,
so they know the furniture, how it is made, how
cyclical business. Mirabito begins with the sales
long special orders will take and what comparable
history and then layers in proposed advertising
alternatives are available when an item is out of
and media inserts which will provide a 10 percent
stock.
increase on any item in the promotion. The business
Still, the whole purpose of Demand Solutions
has broad trends that are highly consistent—leather
is to make sure the sales associate can deliver
sells more in the fall, while dining room sets are
what a customer wants. Although the lead times
popular in the weeks ahead of Thanksgiving as
from Asia have been brought under control by
people begin to critically examine their existing
the transportation department, the supply chain
group must monitor potential shipping delays
That means looking at historical trends in a
furniture ahead of holiday entertaining.
Sales go up when the weather is bad, but not
around holidays, like the pre-Christmas jams
too bad. If couples are stuck at home on a rainy day
that brought the Long Beach, CA port to a
they take notice of ragged looking furniture and head
halt a few years ago, and they have to pay
attention to Asian holiday schedules, like
the Chinese New Year.
The company recently upgraded
out to shop.
“The more that customers are in front of their
living room furniture, the better the chance they will
want to upgrade.”
DS RP about 18 months ago and
When the weather is great, they’re more likely
through that process the supply chain
to be outdoors and not so worried about how their
group learned more about the system’s
home’s interior looks. But when it’s really lousy
capabilities, such as how to manage
weather,—snow and ice—they stay home, and
global calendars using a feature called
even if they notice the place looks dated, they don’t
Time Phase Safety Time, which allows a firm
venture out to replace dining tables, sofas, or tables.
importing from China to plan its ordering around
All this makes Mirabito’s life interesting. When
the Chinese New Year factory closings. The
we talked to him, forecasters – weather forecasters,
application prompts a retailer to send in orders far
that is—were predicting a nor’easter for the
enough ahead of the holiday to avoid swamping
12 demandsolutions.com
“What does it mean when I have to order 20
pick up the slack. If the blue sofa a customer wants
weekend.
Raymour & Flanigan
How Raymour & Flanigan
Use Demand Solutions
review shows that the stores have already
my trending. I have to account for the fact
The merchandising, ad and marketing
are cutting into the safety margin for that
that an item wasn’t here for me to deliver, so
teams go out to the market and decide what
item. In day to day operations, the supply
you have to throw in a little intuition.”
Raymour & Flanigan will carry, and then
chain group lets Demand Solutions run the
lost
determine what pieces to advertise and
routine reordering, and operators manage
opportunities—they don’t come back. The
update the supply chain group on its plans.
the exceptions.
retail sales that don’t occur when a winter
Ad and marketing departments work with
storm hits won’t result in a surge after the
them.
fed into the store’s retail system and from
sun shines again – they are gone for good.
there orders go out to suppliers.
That’s why it is so important for a firm like
want to promote, then my group will work
Raymour & Flanigan to have items ready
on the getting the product into the forecast
to manage by exception,” said Paul Secraw,
for immediate delivery—customers who
for the extra demand; it is a very integrated
a principal in Demand Solutions Northeast.
can’t get what they want might shop the
process.”
“You want to let the system handle the items
competition, or they might just return home,
The supply chain group is just five
that it can; computers are good at ‘always’,
settle into a worn sofa to watch the new
people who have access to Demand
and people are good at ‘sometimes’. A
plasma TV they picked up with their savings
Solutions. Access is limited to avoid any
system like Demand Solutions can call
from not buying a new living room set.
unintended changes to the data. The group
out the exceptions that are important so
shares information by exporting from
the planners can supply their ‘sometimes’
Demand Solutions to Excel and sending that
expertise. Raymour is very good at defining
around, although it is also exploring other
a set of action messages that are high
reporting options within Demand Solutions.
priority, and then know how to review those
messages and stay on top of things.”
“That will put a brake on transport. If I
run out and lose stock for a week, I have to
remember that when I go back and look at
In
retailing,
lost
sales
are
In retailing, lost sales
are lost opportunities—
they don’t come back.
“Once they let us know what they
Deploying Demand Solutions through a
sold 30, it adjusts the demand and might
decide to reorder immediately because sales
Output from Demand Solutions RP is
“They have found the key touchpoints
Citrix thin client means the data is stored in
helping
a single location and members of the supply
A brand new SKU is often very volatile in
Raymour & Flanigan hit 98.5 percent in
chain group can access the information from
its first three months, and the group has no
inventory availability levels, what more can
office, warehouse, service center or home.
history it can rely on to forecast demand.
it ask of the supply chain group?
“They want a tighter forecast,” said
information is reviewed every other week
double what you forecast, that makes it very
Mirabito, and they are willing to pay for
to check accuracy of forecasts. Information
difficult to catch up again. But because the
it. “The company is unique in that we are
on inventory comes from the store’s retail
company is willing to invest in inventory,
willing to invest in inventory and capital to
system, GERS. It supplies a snapshot of
we will keep a higher level of safety stock
service the customer at 98.5 or 99 percent,
current inventory to DS RP. The supply
on a new item. We will buy up to a month’s
but we also make a decision not to just
chain managers can then take that forecast
worth of stock in a new item and we will do
buy inventory for its own sake. There is a
and automatically generate the purchase
more than a weekly order if needed.”
balance to strike between service levels
orders to get the right products to the right
and inventory turns. The company asks
place. Demand Solutions allows the supply
my group to make that balance work. They
chain group to set parameters and issue
want us to keep inventory turns as high as
an exception report if an item is running a
possible, at 12-15 turns a year, and we want
certain percentage above or below forecast.
comparable turns from the service centers to
The group uses Month-to-Date sales in
keep the inventory flowing.”
Demand Solutions to look for any SKU that
With
Demand
Solutions
Ordering
is
done
weekly,
and
Items new to inventory are different.
“You can plan and plan, but if it sells
has varied from the forecast. If it expected
40 to sell during the month and the two-week
DS Magazine
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