Badcock to revamp supply chain
By Clint Engel -- Furniture Today, September 5, 2005
Nashville, Tenn. — W.S. Badcock has made supply chain management its top priority and will spend millions to rebuild its distribution and related systems from top to bottom over the next 18 to 24 months.
Dressed in "Bonanza"-style cowboy gear for the retailer's semiannual dealer meeting here, Badcock President and CEO Don Marks told his audience that supply chain issues are "the biggest cloud" facing the 320-store Southeastern chain as its dependence on imports grows and store sales volumes continue to rise.
"The interruptions and uncertainties of recent months have threatened to undermine the hard work all of us have done through the past few years," Marks said. "Nothing goes against the Badcock grain more than having to disappoint customers."
With that in mind, Mulberry, Fla.-based Badcock has put some projects on hold — including its plan to test a Kids & More youth furniture store format — in order to address distribution issues.
"We are rebuilding the supply chain from one end to the other," Marks said. He said the initiatives will affect everything from how the retailer works with Asian sources, to how it runs its warehouses, to how it provides dealers with timely information on inventory.
Among the moves:
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By the end of this year, Badcock will have at least one employee in China with a mission to "get us the goods we've ordered when we need them" and to keep the company apprised of any looming delays or other problems.
"If you believe the squeaky wheel gets the grease, and you don't have anyone to squeak over there, you're going to be the last man standing," Marks said. -
This summer, the company added four inventory control specialists who keep in touch with vendors, monitor product flows and make sure shipment schedules are correct.
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At the Nashville meeting, Badcock introduced its NOW program (Never Out at the Warehouse), featuring an assortment of best-selling product from sources that have promised to keep the retailer well stocked on specific items. Sources include Kathy Ireland Home by Standard, Legacy Classic, Catnapper, Jackson, Davis International, Holland House and Trademaster.
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Badcock is developing a consolidated inventory management system (CIMS). It will merge all merchandise data into a single system so dealers, management and distribution center workers can see the same real-time stock availability.
The CIMS system alone will cost more than $2 million, Marks said. He declined to project how much all the supply chain initiatives will cost, but said they are imperative given Badcock's growth and its shift in sourcing.
The retailer's current distribution system was designed to handle stores doing $1 million a year. Today, Badcock stores average $1.6 million, Marks said. New stores are averaging more than $2 million in first-year sales, and some in the system have pushed past $5 million.
"The old supply chain management system can't support that volume," he said.
What's more, Badcock's sourcing has shifted dramatically from about 25% imports a few years ago to about 75% today. This has created the need to forecast out further — instead of having three to four weeks supply on hand, Badcock has to be ready for business three to six months out.
Bill Daughtrey, executive vice president of marketing, told dealers in Nashville that with the coming changes, Badcock is aiming for transparency and a real-time information flow across the system, including to and from its supplier partners.
He said the undertaking will be comparable in scope to the 2000 launch of the updated Badcock Home Furniture & more stores, only this time dealers will reap the benefits "without having to roll up your sleeves for the most part."
The one thing all Badcock stores will need, if they don't have it already, is a high-speed Internet connection.
Asked if the plan might involve new distribution centers, Marks said, "I hope not." (In March, Badcock opened its fourth such center in Mebane, N.C., a $10 million, 200,000-square-foot facility to support expansion into Virginia, West Virginia and Kentucky as well as further into North Carolina.)
But he added, "It may involve asking our (international) suppliers to build some supply on this side of the Pacific Ocean. We don't know yet."
Marks also said he didn't want to overstate the distribution problem, noting that Badcock's delivery performance has remained strong — 90% to 95% on time in most periods — despite the glitches. But disruptions related to bedroom furniture from China last year and early this year sent the on-time record in that product category into the mid- to high 80%-range.
Badcock and its dealers have built the chain on strong relationships with customers, and will need to focus on delivery to maintain credibility, executives said.
They want their system to be a competitive advantage in an industry that has often done a poor job on delivery.
"We're setting the bar high for everybody," Daughtrey said.
Remembering Don Marks...
10/05/2009Don Marks dies at 62
10/12/2009Badcock says supply chain 'top priority'
08/31/2005Badcock's Don Marks dies of cancer
10/04/2009Badcock aims to grow
09/24/2006
