Case Study: New Warehouse For Coconis
Furniture World Magazine
By Dan Bolger
Southeast Ohio's largest independent furniture dealer plans for growth with new warehouse.
Growth was causing challenges for Coconis Furniture and its affiliated company Coconis Carpet. Third generation owners Randy and Paul "Jr" Coconis recognized there wasn't enough showroom space to add new profitable lines, the carpet and floor coverings business was more than a mile away and inventory was spread between an onsite warehouse and two offsite warehouses. Their approaches to solving current problems and positioning the company for growth into the next decade can be useful for other furniture retailers.
THE CHALLENGE: Randy took on the challenge and assessed the overall situation. They were clearly the market leader but customers taking their purchases home encountered delays while stock was pulled from several locations. Warehouse damage was excessive and inbound trucks sometimes had to be stopped at multiple warehouses due to space constraints. Labor costs were out of line and taking inventory was a nightmare. Plus, if additional lines weren't added, customers would go elsewhere to satisfy their needs. Most importantly, the plan had to be financially viable.
GOAL SETTING / OTHER CONSIDERATIONS: Randy had visited many other furniture retailers through his NHFA affiliations and had a clear vision of what he wanted to do. Our first meeting was at an Ohio NHFA meeting and we set out to make a plan to be implemented over three years. Wisely, Coconis Furniture had acquired adjacent properties and the owner of the final remaining property could be persuaded to sell.
Goals were oriented to meet their emphasis on promotional merchandise: 25% of sales immediately picked up, 60% delivered from stock within a few days and 15% special ordered. We worked out an overall site plan that would add a 12,000 square foot warehouse and more than double showroom space. The master plan approach is highly recommended because many retailers unknowingly block future expansions while solving a current need. The final issue was resolved when the city agreed to vacate an alley splitting the site.
Another key consideration was meeting fire code regulations by keeping each module within 12,000 square feet with fire walls. While smoking isn't allowed anywhere, a fire would be contained within a single module and couldn't spread to the entire site.
PHASE ONE: WAREHOUSE: The warehouse and new receiving/shipping area were built in phase one. The receiving shipping area is 12 feet high and the warehouse is 30 ft. clear. Used cantilever furniture racks were found and installed with 4 to 7 levels to accommodate the various product heights. Two bays are extra deep for bedding products and additional space was made by placing seating racks above the order picker turning aisle. The high bay warehouse has a footprint of 9,000 feet but almost 25,000 square feet of rack shelf space. Economical lighting was achieved with fixtures that concentrate light in the aisles. Two Crown orderpickers efficiently reach every rack level.
The delivery truck fleet is composed of two low profile Navistar trucks with 20 ft. bodies, a Ford diesel cube van with a 14 ft. body and Chevrolet vans. All trucks are rolling billboards for the company, carrying the same corporate logo used consistently throughout the store, exterior signage, print and television advertising.
PHASE TWO EXPANSION: The showroom expansions were done in subsequent phases along with updating existing space. Half the original warehouse is converted into a clearance center while continuing mattress storage on a mezzanine. New showroom areas were established for home office, youth, motion and RTA while existing departments have been revamped and expanded. While this whole process was going on, Heilig Meyers opened a new store nearby. Their presence has been positive for traffic and sales.
Looking back, Randy Coconis commented "We are very pleased with the results and wouldn't have done anything differently. Our warehouse labor costs were cut in half, there's minimal damage and unwrapped products can be stored effectively. We have excellent staging areas and the customers like being able to pick up their purchases in minutes. Our sales have been great and we are clearly positioned for additional growth."
Daniel Bolger, P.E. provides warehousing, transportation and logistics consulting to clients throughout the USA. Questions on this or other articles by Dan Bolger can be directed to FURNITURE WORLD at email@example.com.
Contributing editor Dan Bolger of The Bolger Group helps companies achieve improved transportation, warehousing and logistics. See many other articles by Dan in the Operations Management article archives on the furninfo.com website. You can send inquiries on any aspect of transportation, warehousing or logistics issues to Dan Bolger care of Furniture World Magazine at firstname.lastname@example.org or call him direct at 740-503-8875.
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