Independent retailer Andreas Furniture builds a consumer & employee "friendly" distribution center.
During twelve years of working with furniture retailers, I continue to be impressed with the confidence, enthusiasm and growth of independent retailers. Each management team has it's own style but shares the same recurring core values. Identifying customer needs and making furnishing their home a satisfying experience. Andreas Furniture has done this for fifty-one years and three generations in Sugarcreek Ohio.
In 1948, Ranson Andreas resigned from a rubber manufacturing company in Akron to start a store-front furniture retail business. The post-war housing boom was on and he focused on providing good furniture at as low an every day price as he could possibly afford. Ranson hired hard working, committed local people and promised customers that the company would do everything it could so they would be completely satisfied. The company grew by word of mouth advertising. Terry Andreas joined his father in the business in 1969 and the founder's values continue into the third generation.
The company expanded its retail space from the original store-front to three adjoining buildings on three levels. From their customers' perspective these buildings appear to be a single structure. Product suppliers are nationally recognized manufacturers. Sales volume in 1998 (in real terms) has grown 71% in the past eight years. The first quarter of 1999 has been outstanding for sales growth and sustained profitability. There is every indication this will be another record breaking year.
The Andreas formula has meant that Andreas Furniture spends more money in service systems, technology and people but substantially less in advertising. In recent years, a slightly higher percentage of sales dollars has been committed to marketing and advertising. The result has been a higher rate of new customers. Nevertheless, recommendations from existing customers are key because deliveries are within a 200 mile circle and several print and television markets.
The management continues to re-invent customer service methods before, during, and after the sale with the goal of maintaining life-long relationships.
Sales growth put great strains on Andreas' existing off site warehousing operations in two multifloor buildings and so initial planning for a new distribution center started in 1996. A consultant organization (The Bolger Group) was invited to assist Andreas Furniture management in mid-1997 and support continued through the entire project. The first step was a team planning effort with President Terry Andreas, General Manager Tim Sisler, Distribution Center Manager Lloyd Crilow, Inventory Control Manager Don Richardson and third generation son Nathan Andreas. The fundamental goals for the facility were defined and the planning effort was expanded with addition of a general contractor and architect.
Details were hammered out in spirited discussions to achieve the desired objectives within budget and to minimize construction change orders. The office area would initially have warehouse management, customer service, computer support and inventory control. Infrastructure to provide for future office expansion was included. A key issue in all furniture warehouses is fire protection and a fire pump was required due to the capacity of the community overall water supply. The floor quality was another major issue with furniture storage over 30 feet. Building summary information is shown in the box on page 60.
Construction started in March 1998 and exceptional spring rains delayed progress about six weeks. Rack installation started in September while other finishing was in progress. Transition into the new facility started in November with full operation in December, slightly late and close to budget.
There are several warehouse features that set this facility apart from others. Andreas has always had a shop where all wood furniture is inspected and prepped. The new facility has eight work stations with lifts for the craftsmen to do their jobs with everything close at hand. There is even a central vacuum system to remove any remaining dust. This area is air-conditioned and has true color lighting and windows.
This shop configuration boosts craftsman productivity while meeting the ever increasing expectations of the customer base. A side benefit is documented vendor quality performance for use when it is time to negotiate on-going relationships. Those with superior quality and consistency in manufacturing, shipping and packaging will earn greater showroom space and distribution.
The Storis warehouse management system was upgraded during the project to include full barcoding and radio frequency data transmission.
A service annex at the side of the building provides easy access to the two compactors, lift truck battery charging and a dock for supplies going to the shop as well as service personnel convenience.
The inside parking for up to ten delivery trucks has been greatly appreciated by the drivers in Ohio's sometimes nasty weather. Since the Andreas policy is to properly maintain and operate trucks for many years, inside parking will extend their life as well as the appearance. Clean trucks are critical to the proper presentation of the company's image. To maximize their advertising value throughout the delivery area, one garage bay has high pressure washing equipment. Each delivery team cleans their own truck in about twenty minutes.
Uniformed delivery teams and great looking trucks are critical to the total customer service strategy. All trucks, which are low profile Navistar models, carry the Andreas Furniture image.
Customers choosing to take their purchases home have easy access with a canopied parking area and a view of the warehouse interior from their reception area. The office area is mostly landscape layout with all personnel having an outside view. Several microwaves are available in the break room for employee convenience. Housekeeping throughout is outstanding.
Bottom line, the facility is a friendly place for employees and customers and is exceeding expectations for efficient support of the company's overall goals. The major lesson to convey to readers anticipating upgrading any distribution function is to do the up-front planning and think ahead at least five years. Andreas Furniture has proven that planning has tremendous rewards.
Daniel Bolger of The Bolger Group helps companies achieve improved transportation, warehousing and logistics. Questions can be directed to Mr. Bolger care of FURNITURE WORLD at dbolger@furninfo.com.