SupplyChainBrain recently reported that same-day and next-day delivery are not services normally associated with furniture stores, but City Furniture is changing that in South Florida. City's fast delivery program, which began 12 years ago, has become a key competitive advantage and is changing customer expectations for the industry. City began offering same-day and next-day delivery across its network a dozen years ago and has aggressively advertised the service, building it into a key competitive advantage, shared Andrew Koenig, vice president of operations. Customers who place an order at any of City's 26 showrooms by 2:00 p.m. on weekdays or 3:00 p.m. on weekends can opt for same-day delivery within a 120-mile radius at no additional charge. From 40 percent to 50 percent of customers choose the same-day option, Koenig explained.

Each day when the cut-off time is reached, same-day delivery orders are batched and sent to the routing system. After routing is optimized, orders move on to the warehouse management system. Koenig noted, "In the warehouse, we will have anywhere from 20 to 30 guys, who have about an hour to pull and stage up to 200 orders." These orders are then loaded onto company-owned trucks. Drivers leave the dock by 4:15 am on weekdays and 4:45 am on weekends and continue working until all orders are delivered, which can be as late as midnight.

Providing this service means carrying a lot of inventory. "We have a great purchasing team and we work really hard to maintain a high in-stock percentage. I am so thankful we chose to go down this path 12 years ago because it is no longer a big deal for us. The whole world is shifting to this mindset and we already are there. I feel good about that," commented Koenig. The company operates a million-square-foot DC.  With more big-box retailers getting into furniture sales and new online competitors gaining traction, the trend for very fast delivery will continue to grow.

Procurement Professionals Reduced Overall Inventory by 30% with Kanbans 

Larry Rubrich wrote in Reliable Plant magazine that single-piece continuous flow is the most effective and cost-efficient way to produce or process anything. Procurement professionals realize this is not always possible when there are steps within the process that run at dissimilar speeds. If the process steps or equipment speeds cannot be synchronized or changed, a buffer inventory is inserted into the systems to simulate single piece continuous flow. Kanbans are signals which automate the replenishment of repetitively used materials and supplies from internal or external suppliers to the buffer inventories. Kanbans reduce outages and shortages of materials and supplies, which improves customer service levels. Kanbans support "pull production" and continuous flow, since material is not produced at the supplier until a signal to replenish material is received from the customer. Using this approach, kanbans reduce overall inventory levels (30% reduction on average).

Kanbans can be used anywhere in the organization where there is repetitive usage including: maintenance supplies, janitorial supplies, raw materials, office supplies, and more. There must be an agreement on the type of signal and the information it contains between the supplier and the customer. (In general, all kanban development is accomplished by negotiation between the supplier and purchasing and procurement professional.) Note that kanbans are most efficient at eliminating waste when signals are returned from the point of use (customer) to the supplier. Sending the signal back through purchasing so they can cut another purchase order to the suppler is not a kanban system. All signals must contain the information that the supplier needs to replenish the material. 

ISM and the State of Procurement Supply Chain Professional

Bob Ferrari , executive editor at Supply Chain Matters recently interviewed Tom Derry, CEO of the Institute for Supply Management (ISM). The professional organization provides procurement, supply industry professionals, and organizations with extensive education, research, publications, and highly regarded certification. Most readers may be familiar with the often cited ISM PMI Index (Purchasing Manager's Index) which compiles various supply chain activity indices among various industries, focused on excellence in supply management. Derry indicated that because of increasing global interest and demand, CPSM (Certified Professional in Supply Management) certification exams are offered in five languages with nearly half of applicant interest coming from outside the United States. This is encouraging news for global demands of recognizable skills and standards.

Derry suggested hot topics currently on the minds of sourcing and procurement community include macroeconomic uncertainty reflected in volatility of commodity prices and where they may be headed. Another issue is top-line revenue growth, especially since demand has been slacking in mature economies while some industries are discovering slow to no growth among emerging economies. Derry described the supply chains becoming "globally local," where cost-opportunistic production is sourced closer to the end-customer and can be catered to specific regional market and consumer needs. It is about the understanding of what is the total cost of sourcing to support both lower-cost product strategies and leveraging the most promising local markets.

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