Retail environment changes present supply chain opportunity


furniture supply chainThe retail climate is always changing. While the past few years have seen general weakness in the U.S. market, some sectors have begun to show resurgence. It is at such times that supply chains become vitally important. Companies need to increase production and storage to cope with demand. If firms perform such supply chain management adjustments too slowly, it could result in a missed opportunity to capitalize on a unique moment of customer interest.

Furniture as a model

A recent boost in the furniture market may act as a representative model for production ramp-ups. According to Trading Deck contributor Anthony Mirhaydari, a recent spike in house sales and general spending has seen new chances arise for furnishings dealers. He explained that certain firms are better equipped to ramp up and cope with demand than their peers. He singled out vertically-integrated companies such as Ethan Allen Interiors as top performers.

Mirhaydari expressed special faith in Ethan Allen due to the internal nature of many of its supply chain processes. He explained that nearly every part of the company, from the design staff to manufacturing and retail outlets, is part of one unit. Such firms can quickly and easily coordinate messages and cope with new consumer needs.

Companies that rely on partners for vital functions have different needs. Changing the production status and inventory level of objects is still important. The organization should have advanced B2B integration capabilities to make sure data moves between partners as efficiently as possible, allowing the process to be nearly as seamless as in a vertically-integrated and self-contained organization. Digital systems such as electronic data interchange (EDI) have enabled firms to speed this process.

Uniting disparate firms

Efficient supply chain communications are now possible even when some partners are too small to possess their own integration systems. According to Logistics Viewpoints contributor Chris Jones, larger firms can create portals to enable small suppliers to make electronic transmissions.

Jones stated that large companies can often create such effective integration solutions that their small allies can take a direct role in the supply process. He explained that such companies can become important strategic partners, helping determine company direction, as though they were larger than they actually are. In a situation dominated by increases in production and inventory to meet demand, that speed increase could be incredibly important and helpful.