Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
There's no way around it. Moving a big couch or dining room table or armoire into, through, and out of a distribution center is necessarily a cumbersome process.
And when you multiply that task by, say, a million items per month, it starts to sound like a monumental material handling challenge. But for retailer American Signature Inc., moving all that furniture is no problem. In fact, it's all part of the daily routine.
It hasn't always been that way. A few years back, the company was struggling to find a way to move large furniture items that wasn't awkward, slow, unsafe, or damage prone. In 2008, it finally hit upon a solution. Today, the retailer is able to whisk even the biggest and bulkiest items through its Ohio and Pennsylvania facilities at double the rates it achieved in the past.
Growing pains
What started the company down this road was growth. Since its founding in 2002, the Columbus, Ohio-based company, which operates both the American Signature Furniture and Value City Furniture chains, has undergone rapid expansion. Today, it has some 125 stores in 19 states.
To serve these stores, the company operates five distribution centers—located in Ohio, Virginia, Georgia, Indiana, and Pennsylvania. The DCs, which range in size from 300,000 to 600,000 square feet, only stock about 4,000 to 5,000 SKUs apiece, but they carry vast inventories in order to fill store orders rapidly.
The DCs are high-volume operations—collectively they handled about a million pieces of furniture and other goods in December, which is just a bit above normal, according to Todd Deutsch, the company's director of DC inventory systems and continuous improvement. And because every piece is handled by a person, order fulfillment at these sites is a labor-intensive process, he adds.
So when American Signature began preparations for a center it planned to open in York, Pa., in 2008, it made material handling efficiency a priority.
The company quickly homed in on the equipment used to move furniture around the facility. American Signature had tried various approaches in the past, including carts the company built in house at its Indiana DC. But none of these devices proved satisfactory, Deutsch says. "The carts were either not well built, or they were too good—too heavy and too bulky and hard to move around. We found ourselves struggling."
Call in the engineers
To find a better solution, the company turned to a specialist in engineered material handling carts, Cleveland-based K-Tec Inc. Working in conjunction with American Signature, K-Tec's engineers developed special carts to meet the furniture company's requirements. Among other attributes, the decks feature rolled panel construction to maintain rigidity under full loads (typically 1,200 to 1,500 pounds) while keeping tare (unloaded) weight to a minimum. (Lighter tare weights help reduce the push force required to manually move loads safely within an accepted ergonomic range.) The carts, which also feature specially mounted caster rigs and a high-strength coupling system, are engineered to slide onto the forks of the person-up order pickers used in the DCs, easing putaway or loading for the workers operating those vehicles.
Their use is fairly straightforward. When a truckload of incoming merchandise is due to arrive, drivers on tuggers stage the carts at the receiving docks according to directions from American Signature's homegrown warehouse management system (WMS). Once the truck arrives, warehouse associates manually load goods from the trailers onto the carts for putaway. As part of the process, they attach inventory labels and scan the labels' bar codes.
A driver on a tugger then moves the carts in trains to the locations designated by the WMS. There, workers on order pickers take over, moving the carts to the putaway location and placing the furniture on cantilevered racks designed for the purpose. (Case goods are stored on standard racks.) At the rack location, the worker scans the goods a second time. "That lets the WMS know exactly where it is," Deutsch says.
The order fulfillment process works much the same way, only in reverse. When orders come in from the stores, the WMS automatically builds a trailer for each store. (Most stores receive a full trailer load each day—a few receive two.) At the same time, the system issues picking instructions. Following those directions, workers on order pickers load the furniture onto the carts, which are then moved to shipping by tuggers. It takes 30 to 40 cart-loads to complete a trailer, Deutsch says.
At the dock, workers floor load the outbound trailers for the stores. The trucks are all hand loaded, but the company has come up with several strategies for making loading easier, Deutsch says. "For example, we try to pick upholstery first to help build a tighter load, keeping big cube items together in the nose. Then we fill in case goods. There's an art to loading furniture."
A cut above
American Signature is currently using the original K-Tec carts in its York DC and a newer, lighter version at its Columbus, Ohio, facility. Both models represent a vast improvement over the old system, company officials say.
"The difference is night and day compared to what we did ourselves," Deutsch reports. "The carts are much better balanced, and they're lighter than the carts we [designed]." He adds that the K-Tec units are quieter too.
The carts offer operational advantages as well. Their low deck makes loading and unloading easier for workers and has cut down on damage to furniture. And because the carts are detachable, drivers can drop them where needed rather than waiting for them to be loaded or unloaded.
Taken together, those advantages have added up to significant productivity gains, says Larry Tyler, K-Tec's vice president of sales and marketing. He reports that the DCs using the carts were able to double output without doubling staffing.
But perhaps the best endorsement of all is American Signature's future plans for the carts. The company says it expects to expand their use beyond just the York and Columbus sites to all of its DCs.
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
Chinese supply chain service provider JD Logistics today announced plans to double its overseas warehouse space by the end of 2025 as part of the company’s broader global supply chain strategy to meet the growing demand for cross-border logistics solutions.
As part of that effort, the company will also expand its network of bonded and direct-mail warehouses. That would mark a significant expansion since JD Logistics—which is the logistics arm of JD.com and is also known as “JingDong Logistics”—currently operates nearly 100 bonded, direct mail, and overseas warehouses. Those facilities total about 10 million square feet in markets such as the U.S., Germany, the Netherlands, France, the U.K., Vietnam, the UAE, Australia, and Malaysia.
Specifically, JD Logistics said it is focused on expanding its presence in Europe and the U.S., establishing collaborative supply chain networks capable of delivering fulfillment services within 24 hours in several regions. In support of that, the company plans to increase its international cargo flights from China to destinations such as Malaysia, South Korea, Vietnam, the U.S., and Europe to enhance cross-border transportation services. It will also explore the development of self-operated transportation and delivery capabilities overseas.
The market for environmentally friendly logistics services is expected to grow by nearly 8% between now and 2033, reaching a value of $2.8 billion, according to research from Custom Market Insights (CMI), released earlier this year.
The “green logistics services market” encompasses environmentally sustainable logistics practices aimed at reducing carbon emissions, minimizing waste, and improving energy efficiency throughout the supply chain, according to CMI. The market involves the use of eco-friendly transportation methods—such as electric and hybrid vehicles—as well as renewable energy-powered warehouses, and advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI) for optimizing logistics operations.
“Key components include transportation, warehousing, freight management, and supply chain solutions designed to meet regulatory standards and consumer demand for sustainability,” according to the report. “The market is driven by corporate social responsibility, technological advancements, and the increasing emphasis on achieving carbon neutrality in logistics operations.”
Major industry players include DHL Supply Chain, UPS, FedEx Corp., CEVA Logistics, XPO Logistics, Inc., and others focused on developing more sustainable logistics operations, according to the report.
The research measures the current market value of green logistics services at $1.4 billion, which is projected to rise at a compound annual growth rate (CAGR) of 7.8% through 2033.
The report highlights six underlying factors driving growth:
Regulatory Compliance: Governments worldwide are enforcing stricter environmental regulations, compelling companies to adopt green logistics practices to reduce carbon emissions and meet legal requirements.
Technological Advancements: Innovations in technology, such as IoT, AI, and blockchain, enhance the efficiency and sustainability of logistics operations. These technologies enable better tracking, optimization, and reduced energy consumption.
Consumer Demand for Sustainability: Increasing consumer awareness and preference for eco-friendly products drive companies to implement green logistics to align with market expectations and enhance their brand image.
Corporate Social Responsibility (CSR): Companies are prioritizing sustainability in their CSR strategies, leading to investments in green logistics solutions to reduce environmental impact and fulfill stakeholder expectations.
Expansion into Emerging Markets: There is significant potential for growth in emerging markets where the adoption of green logistics practices is still developing. Companies can capitalize on this by introducing sustainable solutions and technologies.
Development of Renewable Energy Solutions: Investing in renewable energy sources, such as solar-powered warehouses and electric vehicle fleets, presents an opportunity for companies to reduce operational costs and enhance sustainability, driving further market growth.
The clean energy transition continuing to sweep the globe will give companies in every sector the choice to either be disrupted or to capitalize on new opportunities, a sustainability expert from Deloitte said in a session today at a conference in Orlando held by the enterprise resource planning (ERP) firm IFS.
While corporate chief sustainability officers (CSOs) are likely already tracking those impacts, the truth is that they will actually affect every aspect of operations regardless of people’s role in a business, said John O’Brien, managing director of Deloitte’s sustainability and climate practice.
For example, regulatory requirements on carbon emissions are expanding in every region, which means that even if a specific company doesn’t have to change its own practices, it will almost definitely need to flex to accommodate its partners and suppliers as they track scope 3 emissions or supply chain practices.
Likewise, companies are starting to challenge the classic concept of “force majeure” events than can cancel service providers’ contractual duties due to unforeseeable weather events. As the new argument goes, extreme weather patterns increasingly occur in accordance with climate scientists’ forecasts, so those hurricanes and wildfires are in fact foreseeable after all.
But one strategy for coping with the cost of those changes is to mine the power of the data that most companies will soon need to collect as part of their evolution. Instead of simply tracking its trucks to trim their routes and emissions, a transportation company could use the same data to manage their maintenance and fuel consumption.
“The climate management transition is going to be a massive disruption, but with that comes massive opportunity,” O’Brien said from the keynote stage at the “IFS Unleashed” show. “Don’t waste compliance efforts just on compliance, use it to create new value. You’re collecting all that new data, so use it!”
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.