Massood: Delivery a key component in furniture
By Gary Evans -- Furniture Today, October 3, 2005
Eden, N.C. — Eddie Massood thinks there are things in the furniture industry more important than new products.
"Ultimately, I believe one thing about this industry," Massood, president and chief operating officer of MGM Transport, said during a break at the Las Vegas furniture market in late July.
"You can walk the halls and see all the different products. But I believe delivering the product to the consumer when they want it is the most important. Don't show me all the SKUs or tell me how much inventory you have in China if you can't deliver the product to me when I need it."
Massood's company has been delivering for more than half a century. Until five years ago, its trucks hit the highways transporting goods to two-thirds of the retailers up and down the East Coast from two-thirds of furniture manufacturers nationwide.
Now the company has expanded its service to what Massood calls "from the cradle to the grave" — from the manufacturer's loading dock to the consumer's living room.
A 530,000-square-foot facility here, a former Pillowtex fabric products factory, is the company's latest tool in its plan to make its home delivery division, MGM Home, pull in 50% of corporate revenues in the next three years, up from a current 5% to 10%. Currently, most of MGM's revenues come from LTL (less than truckload) shipping, which has been MGM's core business and long-time strength.
The Eden facility, the company's third in North Carolina, serves as a warehouse and distribution center and also will house light manufacturing to assemble imports, deluxe and prepare furniture and do repair work if necessary. The company also has facilities in other states, including Southern California.
John Donahue, who runs the Eden facility, said MGM executives sat down five years ago to determine where its opportunities might be. One thing they recognized was that as more furniture was made overseas, warehousing and delivery was becoming more complicated — and retailers were looking for a way to minimize the headaches.
The company had provided in-home delivery for the now-defunct Sears Homelife furniture store chain from the mid-1980s to the mid-1990s. "It provided a good background in retail and working on a national scale," Donahue said. "We were involved in a lot of facets with Sears."
Massood and Donahue both speak fervently about delivery.
Whether it is handling U.S.-made goods picked up at the vendor's factory or imports picked up at a dock, MGM's goal is the have the shipment in the customer's home in three to five days via the High Point and Eden facilities, versus three weeks for traditional delivery.
The secret is in cutting process time and paperwork normally associated with getting the shipment from vendor to retailer and from retailer to customer, by two weeks or more. The company uses modern technology — bar coding and tracking equipment — to keep everybody, including the consumer, informed on the shipment's status every step of its journey.
"The nicest thing about what we do is that we ask the customer when they would like to have their shipment delivered," said Massood. "It's not about our schedule; it's about their schedule. Would you take better to 'We want to deliver that sofa on Monday' or would you take better to 'What day works best for you to take delivery?'"
Customers can have a "pleasant experience with knowledgeable salespeople" in a store, said Massood. "But it can't stop there. It has to continue all the way through. They want the product and a delivery that continues to wow them. If you just spent $3,000, $2,000 or $25,000, you want the level of service and the quality of delivery to match the store experience."
High-quality delivery can help the distributor, importer, manufacturer and retailer win business, he said.
Also, from a practical standpoint, quick delivery is a great way to turn cash, according to Massood.
"As soon as you deliver the product to your consumer, you can collect your balances. Those balances go on to the retailer," he said. "Cash flow is king in our industry."
