Exclusive Q&A: Bob’s Discount Furniture ensures supply chain success

Bob’s Discount Furniture leverages strategy and technology to keep its supply chain flowing smoothly regardless of external pressures.

Chain Store Age recently spoke with Ramesh Murthy, chief supply chain officer and executive VP of Bob's Discount Furniture, to discuss how the specialty furniture chain manages its supply chain trends and ensures diversity among its supply chain associates. Murthy also offered his perspective on what retail supply chain professionals should expect in 2023.

How does Bob’s ensure its supply chain functions properly?

The first and foremost thing is working very closely with our factories and our carriers to make sure all the goods are here. Earlier this year, Bob’s worked hard to bring in the necessary goods and push them a little bit earlier. We did all of that work upfront. And our business is not quite as seasonal as some other retailers.

In addition, Bob’s has adjusted our internal systems and our movement of goods so that we can fulfill customer orders from multiple locations. We have over 160 stores with five distribution centers. Our stores are concentrated primarily in the Northeast, along with some in the Midwest and as far west as Arizona and Nevada.

Most of our goods come in through our New York or Baltimore distribution centers, but we can adjust where they are sent very quickly. Our stores are really showroom stores, people don't buy off our floor. They buy and then we deliver through our last-mile services or through third parties and service providers.

What we're doing is allowing those depots to be serviced by multiple distribution center as well. If inventory is sitting in my Connecticut or New Jersey distribution center, for example, it will merge and go to the appropriate depot. We've also had really favorable and positive support from ocean carriers, so our import goods have been flowing nicely so far.

[Read more: Businesses are preparing their supply chains for holiday e-commerce]

What supply chain solution are you using to enable this inventory merging?

The capability is inside of our SAP tools. We built a bolt-on that works with our SAP enterprise supply chain platform.

What specific steps have you taken to mitigate supply chain disruption?

We've just done a good job in the last year of making sure we expand our sourcing diversification and our sourcing availability. We're not just sourcing all our goods from one place.

Bob’s has multiple factories, multiple countries, multiple geographies, that helps you right, that was something that had been started pre-pandemic that got accelerated during the pandemic. And I don't think we're any different in that regard and many other folks.

How does Bob’s promote diversity in its supply chain workforce?

We are trying very hard to make sure we take care of our supply chain associates. We are also recruiting, such as being actively involved in getting more women to take truck driving jobs.

Bob’s also has something we call ‘happy or not.’ In every one of our distribution centers, there are stations where associates can let us know how they’re feeling by hitting a happy face or frowny face buttons. They can also send us comments on any of the reasons why they chose one of those buttons. Diversity efforts are most effective if what you do is intrinsic to your behavior.

What is Bob’s primary supply chain focus for 2023?

Bob’s is trying to create redundancy or resilience in every part of the supply chain. We want to make our network operate like a single, big network, as opposed to each individual node on our network operating separately.

In addition, Bob’s is systematically introducing a concept we call postponement, which is making decisions about where goods will move at the last possible moment. For example, if I make a decision months ahead of time that I need a certain amount of a product in a specific place, I can only be so smart. But if I make that decision maybe five weeks out, I'm much smarter.

Also, Bob’s has historically been monolithic, with our goods moving as container loads. Furniture is big. So, we’re starting to think about things we can do on the origin side to consolidate and combine goods and drive efficiencies that way.

Lastly, Bob’s is looking at artificial intelligence (AI). We don't see AI as an enabler of core functions. We see it as a really cool way to handle exception management and a large conflict network. AI could potentially monitor and measure key information and alert us to problems much earlier, and I think that's where we'll start focusing in the early stage on the AI side of things.

[Read more: Analytics, automation can resolve supply chain issues]