Furniture Retailer Couched in Tech Savvy
Published Mar 11, 2008
The inventory at Ivan Smith Furniture can now be monitored in much the same way overnight mail services track packages.
The Ivan Smith Furniture Co. sells furniture the old-fashioned way – through a personal approach to retail that is centered around customer satisfaction, beginning with selection all the way through to delivery. But its back-end operation is thoroughly modern technologically.
Beginning in 1961 with one store, the family business has grown to a 39-store group with 550 employees serving markets in Louisiana, Texas and Arkansas. With that success came challenges, such as the logistics of shipping bulky items from manufacturers around the world to a central distribution center, then to the growing network of retail stores and ultimately to customers’ homes.
Ivan Smith is part of a consortium that includes furniture retailers from Florida, Wisconsin and Massachusetts. The group decided to consider new systems to maximize efficiency, says Trey Smith, grandson of founder Ivan Smith.
Among those considered was the RedPrairie warehouse management system for inventory, shipping and distribution management. Once Smith saw it, he was sold.
“We’ve gone from the Flintstones to the Jetsons,” he says. “It operates hand in hand with sales and accounting.
The system drives our whole back-end operations, from receiving to shipping. It’s really brought our cost per piece down considerably.”
RETURN ON INVESTMENT
The Shreveport-based company spent more than $500,000 to buy the sophisticated system in 2005, but Smith says it paid for itself in less than 18 months.
In the Ivan Smith distribution center, furniture is now stacked in racks instead of on the floor. Each piece is assigned a “license plate number,” which allows tracking it at every step. The system records who has moved or received merchandise and when, similar to the way overnight mail services track packages.
The company now knows exactly where each item is – increasing inventory accuracy, shipping speed and, of course, customer satisfaction. “We have records of exactly what’s happened in the life of that piece,” Smith says.
Another of the system’s benefits is tracking productivity, which increases accountability. “We actually pay our employees more now, and we get better people,” Smith says.
With so many discounters entering the furniture market and squeezing profit margins, specialty retailers need to control every aspect of the supply chain to be competitive.
“This is a market with incredible logistics challenges,” RedPrairie Chief Executive Officer John G. Jazwiec says. “We’ve captured market share for this industry due to robust and flexible functionality inherent in our solutions.” In addition to consumer goods companies like Ivan Smith, RedPrairie’s customers include the food and beverage, automotive parts and pharmaceutical industries.
Smith puts it this way: “Furniture is a tough business. It’s big and bulky, you get damaged pieces, and you have customer returns. We try to do what we do the best we can, and you have to survive by adapting.”
Story by Jeannie A. Naujeck
Photo by Wes Aldridge
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