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The James Jefferson Furniture Company takes a systematic approach to manage their supply chain, that is, the interlinking relationships of everyone involved in developing, producing, delivering, and servicing their furniture. They want to reduce manufacturing cycle time to maximize profits while achieving greater customer satisfaction.
Basic Supply Chain
Management = Greater Profits
by Tom Dossenbach
W&WP, September 1999
One of the greatest challenges in the furniture industry today is that it takes too long to get a product through the supply chain to the customer. Developing solid partnerships with interested suppliers can be your key to greater profitability.
JJFC uses raw lumber, particle board, metal hardware, and paints and varnishes, among others. They use these materials in roughly the same proportion as the industry averages.
JJFC buys these materials from almost four dozens different vendors. All transactions are recorded on paper kept in filing cabinets. The company's purchasing officer is in the Finance Department, reporting to the Director of Accounting and Control. This 20-year employee has a vast web of personal contacts so important to her that she has memorized all their names, job titles, and phone numbers. It is with great reluctance that she changes vendors.
JJFC's product strategy is to market dining room and living room collections across a limited range of styles. Its hallmark is small interlocking groups of chairs, tables, and cabinetry that integrate into one cohesive design personality.
For purposes of the 1997 US Economic Census, JJFC markets wood furniture products, mostly nonupholstered, in the following categories:
tables, except card and telephone tables
chairs and seating,
including rockers, settees, loveseats, benches, stools, etc.
cabinets, desks,
credenzas, bookcases, bookshelves, and wall units (desk, bookcase, and storage),
including record, music, sewing, smoking, etc.
custom-made wood
household furniture
tables
chairs
buffets, servers,
china and corner cabinets, and other storage
exquisite hardwoods
kiln-dried frames
custom-engineered
seating and shaping
on the occasional upholstered styles:
four-way fabric matching
fully lined skirts
and fully wrapped frames
The basic furniture pieces have dozens of variations. For example, a "simple" sideboard has:
base sizes: one, two, and three doors
a simple cupboard,
or a drawer above a cupboard
wood finishes:
light, dark, and limed
tops: an open
shelved "dresser", a glazed display, and bookshelf
handles, etc.: iron
rings, brass rings, and wooden knobs
We define value as design, selection, and service for affordable, livable furniture.
At JJFC, some marketing activities are labelled strategic. They are well funded and measued only by anecdote -- subjective experience and success stories.
Other activities were deemed tactical. These were the red-haired stepchildren of marketing. They were (or, at least, could be) easily measured and directly tied to new leads and, eventually, sales.
To repeat: On the one hand, this marketing stuff called strategy wasn't related to selling anything and couldn't be measured. On the other hand, this stuff called tactics was all about generating leads and helping to close sales.
JJFC is hurt by a gap between what marketing is allowed to dream up and what sales must do.
Outside sales force does a good job of maintaining market share. Much of it is solid, but there is fierce competition for the brand-switching department stores.
According to industry surveys, JJFC is a leader in the "good", "better" and "best" price categories.
Retail furniture is aggressively priced and marked-down. It sells seasonally. The department stores have regional spoke-and-hub distribution systems that lets them control inventory.
All of the JJFC national advertising budget goes to co-op deals with the department stores. Because they are new, the boutiques get a disproportionate share of local advertising, mostly TV and newspaper, usually co-op deals with the local retailer.
Camera-ready copy for print ads is produced in-house. TV spot ads and video inserts are produced by the local ad agency that handles the JayJay Furniture Direct account.
JJFC maintains a brochure-style web site at http://www.jjfc.com (not real) outsourced to its local advertising/pr agency. They also print out and mail the occasional email directed to the company.
The company does no marketing via the Internet. A search at Google.com in early 2002 turned up only a few references outside of the furniture trade press. Only a half-dozen actual hyperlinks to jjfc.com exist on other pages, usually private and poorly designed. The legal staff has determined that these chance and distant associations do no harm to the brand and the links have not been challenged.
The web site contains corporate and investor relations information, reviewed annually, as well as a catalog-type display of several best-selling products, reviewed quarterly. It does not offer products for sale. The site's primary purpose is to project and protect JJFC's brand image as a manufacturer of good, affordable furniture that values design, selection, quality, and service. The site's secondary purpose is to protect JJFC's distribution channels. It directs users first to brick-and-mortar retail outlets, then to phone numbers, and finally to the retail outlets' web sites.
JJFC's furniture is sold through retailers across
the US. Well under half the company's volume now comes through dedicated
distribution outlets. The company has a multi-tiered distribution strategy
designed to serve the customer. Consumers can now find JJFC's furniture and
accessories through complementary channels of distribution:
its own retail stores,
JayJay Furniture Direct
its new in-store boutiques
for main street retailers called “@ Home With JayJay”
traditional channels of
distribution such as Kaufmann's, Macy's, Wards, Foley's, and JC Penney stores
These channels of distribution bring JJFC branded home furnishings to a broad
range of consumers who appreciate high quality home furnishings at affordable
prices. The major retailers especially are known as the places to shop for
quality and value over a broad range of products.
JJFC has a small fleet of delivery trucks for day trips, where it's not so
expensive to have an empty truck returning. They can service the JayJay
Furniture Direct stores in the immediate geographic region as well as get most
of the furniture into the department stores' regular channels. For the rest of
its deliveries, the two out-of-state JayJay Furniture Direct stores and the @
Home With JayJay boutiques, the company uses the spot shipping market.
JJFC has no systematic parts numbering system. The piece parts (almost ten thousand and growing) are described in a vast array of drawings and process specifications that reside in an untidy set of filing chests in the CDO's office. For example, including screws, edges, and verneers, a plain table with a leaf insert has over a hundred parts.
The CDO, DOO, and DOP hold all the information necessary for linking the final products to the raw material inputs. That is, they hold it all in their heads.
Piece parts are coded after a fashion, but in descriptive terms which refer to the ultimate piece of furniture of which they are a part.
Raw materials are ordered in broad categories with no cross
reference to the piece parts they will be used to make. They buy lumber on
guestimate, intuition, and luck.
Web
Smart for a Changed World
Business Week, October 29, 2001
DIGITIZING DEALERS
The problem: Dealers for office furniture maker Herman Miller had to
phone company reps to track orders, get shipping dates, or product
information--waiting up to a week to make final arrangements.
The solution: This summer, Miller completed a $1 million project that
links it to its 400 dealers via the Web, giving them easy access to info.
The payoff: Dealers say it helps them better serve customers by giving
them instant access to order and shipping info without having to call. The
company says facilitating access by dealers will encourage them to recommend its
products over those of other makers.
Herman
Miller
Business Week, October 29, 2001
Miller is slowing the pace of its biggest Web project, a
multiyear effort to build a corporate portal. This project would give employees,
suppliers, and customers a view deep inside the company's operations. While
Miller expects to reap financial rewards from the portal, it won't deliver
results quickly. "We can't afford to be as aggressive as we were
before," laments Gary W. VanSpronsen, Miller's chief information officer.
Even so, the company hasn't pulled the plug. Miller has continued with a more
modest initiative, called Kiosk, that helps its 400 dealers follow the progress
of their orders with just a few mouse clicks on the Web. Before Kiosk was rolled
out this summer, dealers could submit orders electronically, but they needed to
call the company to change an order or check on its status. For Miller, the $1
million project was attractive because it was affordable and could be finished
quickly.
Internally, the marketing department is thoroughly computerized. Currently, only the PR specialist has Internet access via an AOL dial-up account: jjfc9778@aol.com.
They have a DOS-based locally-written sales order system. It runs like a charm and does exactly what they want it to, but it is rather basic. It generates the appropriate paperwork for vendors and links financial transactions to accounts. It focuses on the monetary aspects of the transactions, with only a general description of the materials involved. Thus, it is useless for tracking materials.
Of big enchiladas
and some small steps forward
by Brian Carroll
Furniture Today, June 11, 2001
At the High Point market in April 2000, no
fewer than 10 Internet companies were touting the benefits of an all-industry
online exchange, a place on the Web where big companies and small could merge
their e-commerce activities and someone could make a buck automating the
transactions.
With the recent shrinking of FurnishNet, every one of those 10 companies has
either dropped off the planet and shut down, or switched to a different business
model.
The concept of an electronic marketplace like covisint — the much-anticipated
exchange the Big Three automakers are assembling — is effectively dead in the
furniture industry, unable to attract enough retailers or factories to reach
critical mass. Dead with it are companies that saw an antiquated industry just
waiting for an idea factory just like theirs.
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Marketing:
Supply Chain