Living the Sweet Dream
While most retailers are losing sleep over dismal sales, privately held Slumberland Furniture is thriving. Sales are down slightly, but the company’s overall financial picture is positive, due largely to process improvements in the supply chain that have enabled the specialty retailer to reduce inventory while improving availability of product to its stores and customers.
Based in Little Canada, Minn., Slumberland Furniture claims the title of the largest U.S. retailer of La-Z-Boy products and sells more Siemens and Sealy mattresses in the Midwest than any other retailer. With 117 stores in 10 centrally located states, 40 of which are corporate-owned and the remainder franchisee-owned, the company reported annual sales of $375 million and is currently celebrating its 42nd anniversary.
Jamie Page, director of information services at Slumberland, affirmed that the company has experienced dramatic improvements in recent months: “We’ve lowered inventory in our warehouses by more than 20%, but availability of product has remained very strong.” he said. “Our gross margin ROI is near the target where we need it to be, and we are certainly closer to that target than we were 15 months ago.”
A number of factors have led to this success, but one of the greatest contributors has been the company’s ability to leverage its warehouse management system to transition from a paper-based, dedicated-responsibility platform into an automated, flexible multi-tasking system.
Initially the WMS was used simply as a tool that assigned where to put-away product and where to pick product, and warehouse employees were dedicated to either put-away or picking. Now the WMS, provided by RedPrairie, Waukesha, Wis., provides system-directed feedback, enabling each associate to perform both put-away and picking. It automatically alerts employees through the RF scanners that they carry when additional products need to be picked.
Although the objective was to improve efficiencies, not to reduce head count, Slumberland can accomplish more work with fewer people, and it has not replaced associates from work-force reductions that have occurred through natural attrition.
Slumberland has three distribution centers, in the Minneapolis-St. Paul area, Wisconsin and South Dakota. All of the DCs use the same WMS.
“We operate on a very low-cost, centralized computing system,” explained Page. “Everything comes back through our headquarters. Over the past two years, we have pushed to become standards-driven. Now everyone in the DCs uses the same hardware, scanners and processes.”
The robust reporting capabilities of the RedPrairie system that are allowing Slumberland to extend efficiencies outside the walls of its DCs are equally exciting.
Slumberland is evaluating applications for managing its truck fleet more effectively, with optimized routing and delivery windows tightened to two-hour blocks, as well as productivity tracking of inventory pieces. The majority of furniture inventory is routed through a company DC, but the Sealy and Siemens products often deliver direct to stores.
For corporate stores, product is typically delivered from a DC to the consumer. For franchise stores, the product is delivered from a corporate DC to the store, where the franchisee takes ownership of the product and delivers it to the end consumer.