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Ramesh Murthy serves as chief supply chain officer and executive vice president for Bob’s Discount Furniture, one of the fastest-growing furniture retailers in the country. He is responsible for the end-to-end supply chain, including forecasting, planning, inventory management, inbound logistics, warehousing, and distribution. Prior to joining Bob’s, Mr. Murthy held a number of senior supply chain positions at Hasbro Inc., including planning, warehousing, distribution, data governance, and sourcing operations. His background includes leading the North American Consulting Division for Retail and Consumer Goods at Tata Consultancy Services as well as leadership roles at CVS Pharmacy and American Greetings Corp.
David Maloney, Editorial Director, DC Velocity 00:00
Creating a work culture of diversity. Robots are coming to a facility near you. And truck sales are on the rise.
Pull up a chair and join us as the editors of DC Velocity discuss these stories, as well as news and supply chain trends, on this week's Logistics Matters podcast.
Hi, I'm Dave Maloney. I'm the group editorial director at DC Velocity. Welcome.
Logistics Matters is sponsored by TGW. TGW is a leading global systems integrator for automated warehouse solutions. They're a one-stop provider, designing, manufacturing, implementing, and maintaining end-to-end fulfillment solutions for URBN, Gap, Jasco, TVH, and more. Distribution network management is becoming all the more challenging. Master the unpredictable with TGW, a leading global systems integrator. Visit tgw-group.com for more information.
As usual, our DC Velocity senior editors Ben Ames and Victoria Kickham will be along to provide their insights into the top stories of this week. But to begin today: finding enough drivers to move goods is getting more difficult all the time, and there is especially a lack of women truckers, who make up less than 8% of the driver force in the United States. But one company has had very good success at attracting and retaining female drivers. Ramesh Murthy is the chief supply chain officer and executive vice president at Bob's Discount Furniture. That's a nationwide home furnishings retailer. I recently spoke with him about his company's success at establishing and maintaining a work culture where diversity flourishes. Here now is our conversation.
David Maloney, Editorial Director, DC Velocity 01:46
Welcome Ramesh. It's great to have you with us on Logistics Matters today.
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 01:50
Great. Thank you, David, good to be here.
David Maloney, Editorial Director, DC Velocity 01:52
First of all, can you describe in brief what the supply chain for Bob's Discount Furniture looks like, such as what your distribution transportation operations are like?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 02:01
Yeah, so Bob's has five distribution centers around the country serving 164 stores. The distribution centers — three in the northeast, essentially, one in the Midwest, one in California — we run our own distribution centers, we run our own line haul fleet operations, but then that all goes to a series of about 48 depots around the country to serve our customers for the last mile, and our last mile is done with third-party support.
David Maloney, Editorial Director, DC Velocity 02:30
Last mile is obviously very difficult handling bulky furniture.What do you try to look for in a partner for that kind of last mile distribution?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 02:37
So, there's a lot of important things. One of the big things we've done over the last few years is we actually measure our net promoter scores now on delivery. It's a very, very important metric. So, we look for folks who are very customer-service oriented, and we've built into our budgets and plans to make sure the teams have enough people to carry and move furniture, have all the right tools and capabilities. So, generally, you're trying to find some of the, you know, the top last-mile providers that are out there.
David Maloney, Editorial Director, DC Velocity 03:03
You had mentioned tools that enabled that last-mile delivery. What kind of tools do you offer to help those drivers make bulky deliveries?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 03:10
Well, the tools themselves are just basic things like dollies and handcarts. Furniture is one that it doesn't necessarily have a lot of fancy electronic technology, but it's having all of those basic things. We also make sure all of our folks have, you know, the appropriate footwear and things like that — they don't, you know, scuff up the house or mark up the house. We even have, now, in many cases, we put a little red-carpet treatment, we call it. But we put a little red carpet down [on the] threshold to make the customer feel, you know, that, you know, it's very important what we're doing with them.
David Maloney, Editorial Director, DC Velocity 03:39
Sure. Do you have different tools that assist with that delivery, such as routing tools, a notification to the customer when you're coming, those kinds of things?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 03:48
Yeah, we do. So, it's an interesting process. We do have our own routing tools and routing capabilities. So, we have a whole group that does that, you know, as we work through each day, all of our routing, and we're usually routing a few days out. But on top of that, once that routing is done, there's a whole series of messaging that works with the customer. So, you'll get emails from us that your delivery will be, you know, getting scheduled, you'll get emails of when it's going to be, and then you'll actually get text messages, if you've signed up for that, to say, hey, you know, we will be coming today in this time window. And then generally, our folks will call the customer to make sure they're home and also let them know they're on the way about 30 minutes out.
David Maloney, Editorial Director, DC Velocity 04:28
Ramesh, your company was just recently named a Top Company for Women to Work for in Transportation from the Women In Trucking Association. What steps have you taken to attract women drivers?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 04:39
Yeah, so this has been a focus of, diversity and inclusion and all of those elements have been a very important part of our culture from Bob's from the very first day. You know, we've always wanted both our stores and our distribution centers to reflect the communities we work in. But getting women to come join and work in our ranks has been a big effort. Over the last few years, we've been advertising very specifically, and in places like InHerSight and other places where we're very highly recognized for doing that. We make a concerted effort to go to places to find those folks, work with Women In Trucking — that's how we got involved in this particular award this year, as we go along. So, I think those are really important things that we've done early on, and then we have a fair number of folks, you know, everything from our routing director — you know, we talked about routing — all the way through routing managers, admins, our carrier partners, our drivers, they all are reasonable female representation, now, as we continue to drive. Big opportunity for something we have to continue to work on.
David Maloney, Editorial Director, DC Velocity 05:39
You had mentioned that you have a culture that supports diversity. Can you tell us about some of the steps that you've taken specifically to create that diversity?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 05:48
Yeah, so aside from the fact that it's sort of ingrained in how we hire, it's part of our core values. We've got our own diversity and inclusion resource page all the way through. It's something that our HR teams work very closely on. We do a tremendous amount of training with our folks. We measure how we're doing on that. So now, even in our engagement surveys, we actually measure our diversity scores along the way, so it gives us a read on where we are and where we're succeeding where we're not. And we do a lot of, like I said, training on things like unconscious bias, and what is diversity inclusion. It just becomes kind of a natural part of the rhythm of our day.
David Maloney, Editorial Director, DC Velocity 06:24
So, what kind of roles do the women in your transportation network actually do? Are they working in inbound distribution to the stores? You mentioned about the home delivery is primarily done with a 3PL, but do you do any of that also, from your distribution centers?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 06:39
So, we don't do — the actual delivery to the customer is done with our third parties, that's just how we operate, but within everything else, everything from fleet drivers — so today, we're, just little under 10% of our fleet drivers are actually female, as we go through, but then a lot of our service managers, like I had mentioned earlier, folks who are doing our routing, all the folks doing the organization and the planning around what we do are all, are female, in that delivery model. In our warehouses, you know, a number of our warehouse managers, assistant managers, they're all female as well, as we go through. So, we've been trying to continue to drive that everywhere we can,
David Maloney, Editorial Director, DC Velocity 07:24
As my wife could probably tell you, the last thing she would want to do would be moving furniture all day. So, you have a fleet that has a large number of women in it. How do you handle that kind of bulky furniture in making your transportation moves and deliveries?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 07:38
The actual part we do, which is really interesting, our drivers don't have to move any goods, by design, right? So, literally, our drivers are dropping them and leaving them at the depot. The depot teams will bring them on to the depot to get ready for the last-mile delivery. So, that that's the first thing, right? You actually eliminate that step for many of the folks as we go along. Also, almost all of our drivers are, you know, home every day, right? They're not doing long-haul trips. We have, even when we have our longer-haul destinations for our own line haul, we use teams, so that they're going partway and then other teams pick up from there. So, we've tried to make it so that people can be home every day, people don't have to lift the heavy stuff. Those are things that really helped in that regard.
David Maloney, Editorial Director, DC Velocity 08:23
Well, of course, during the pandemic, a lot of people did home improvements —upgraded their furniture, redid a lot of their homes. Has that slowed somewhat, or do you — what's your outlook for 2023 as far as the home furniture market and the delivery expectations you have for that?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 08:39
Yeah, I mean, I think, for us, we are an everyday-low-price retailer, and a high-value retailer. We have a positive outlook on '23. As our CEO likes to say, you know, our business model does well in good and bad times, you know, whether there'll be some, you know, contraction or recessionary behavior in the marketplace. But I think with our value proposition, you know, I spent some time just recently in Vietnam with our merchants, you know, and I look at what's coming into our stores and the products. I'm very optimistic.
David Maloney, Editorial Director, DC Velocity 09:09
When we look at turnover, that's obviously an issue for the trucking industry Ninety percent typically, is the turnover rate. How does that compare with the fleet that you have, and women in particular, that you're hiring.
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 09:20
So, if I told you that what you just described as a turnover rate is slightly under our retention rate for 2022. Our retention rate across our fleet and our distribution centers will be north of 97% this year, which, you know, I think, is a remarkable accomplishment by our team, and so for us, we take it very, very seriously. We do everything from engaging people daily — we have something we call "happy or not," so everyday anyone can just, it's a little setup, they can go in and just give us a happy face, frowny face, neutral face. They can put a quick note to us. It's something that we try to spend a lot of time and pride ourselves on understanding, and in the past year, we've spent a lot of time looking at the marketplace. This is a very tough, it's usually a high-turnover industry, so we've been very, very good at looking at what's out in the marketplace. What do we need to be competitive? How do we make the processes work more effectively, make sure people are paid appropriately? So, you know, it's really paid off. Like I said, we're gonna be in the upper 90%, for retention this year, so I can't be more happy.
David Maloney, Editorial Director, DC Velocity 10:24
That is amazing. Ramesh, what do you consider as being some of the keys for the success that you've had in your transportation operation?
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 10:31
I think it's very, very important for us to keep understanding what makes it good to work with us, and make sure we're always attacking those things that are not right. So, if its processes that make it difficult to work — you know, you asked about tools to move things. All our DCs, you know, they're using, you know, lifts and things like that to help with all that. You know, now we've got some DCs, one DC now, with guide-by-wire technology. We're trying to find those right technologies that'll continue to help us improve our operations, but, you know, we think it's very, very important to the fundamentals well, and I think that's what's helped us this year for sure, and I think will help us as we go forward.
David Maloney, Editorial Director, DC Velocity 11:11
We've been talking to Ramesh Murthy. He is the chief supply chain officer and executive vice president for Bob's Discount Furniture. Thank you Ramesh. We appreciate you being with us today.
Ramesh Murthy, Chief Supply Chain Officer and EVP, Bob’s Discount Furniture 11:22
Thank you, David. It's a good time. Thank you.
David Maloney, Editorial Director, DC Velocity 11:25
Now let's take a look at some of the other supply chain news from the week. And Victoria, you wrote in this month's issue of DC Velocity about how warehouse automation projects for picking are on the rise. Can you share the details?
Victoria Kickham, Senior Editor, DC Velocity 11:39
Absolutely, Dave, yeah. So, in this month's issue of the magazine, I wrote about the increased use of robotics for picking operations in the warehouse. More companies have been investing in robotics and automation to speed and improve this labor-intensive process, so we wanted to take a look at some projects that could serve as examples to the broader industry, especially for those who are just beginning to investigate making these kinds of investments. The examples I wrote about include a healthcare company that is using autonomous case-handling robots for storage and handling of its semi-finished products — they manufacture blood glucose meters — and also a logistics services provider that is using a unique goods-to-person system comprised of autonomous mobile robots, or AMRs, and mobile shelving units to fulfill parts orders for an aerospace-industry customer. The latter project is interesting because the AMRs are programmed to travel through the warehouse to the appropriate mobile shelf, where the parts are stored. The AMR then positions itself under the shelf and moves it to the appropriate picking station, where a worker takes over.
David Maloney, Editorial Director, DC Velocity 12:42
Victoria, those are some good examples, and it certainly seems more and more common to find robots on the warehouse floor. Is this just anecdotal, or are there statistics to back it up?
Victoria Kickham, Senior Editor, DC Velocity 12:53
Yeah, it's both. I mean, we write about these interesting projects all the time, people are always telling us about new and interesting projects, but there is actually some data to confirm the trend. More than half a million industrial robots were installed worldwide in 2021. That was a 31% increase over 2020 and a 22% increase over the pre-pandemic high that was recorded in 2018. That's all according to an October 2022 report from the International Federation of Robotics. I should say this includes robotic projects used in a variety of industrial applications, not just for picking. But even though it's broader, these installations bring the total number of industrial robots and action around the world to about three and a half million. IFR also predicted last year that worldwide installations would increase nearly 10% in 2022. We are seeing a bit of a slowdown this year as the market sort of catches up with pandemic-related demand, and also as the economy slows and companies worry about high inflation and a potential recession. But despite all that, IFR said that annual growth should still remain solid in the mid- to upper single digits over the next three years, so my guess is that there's still a lot of warehouse robots on the way.
David Maloney, Editorial Director, DC Velocity 14:10
Right, it seems that way. I guess it's no surprise that automation continues to make some huge impacts into our facilities. Thanks, Victoria.
Victoria Kickham, Senior Editor, DC Velocity 14:17
David Maloney, Editorial Director, DC Velocity 14:19
And Ben, while we just talked about a healthy robotics market, you've been reporting that it has also been a good year for truck manufacturers. What can you tell us?
Ben Ames, Senior News Editor, DC Velocity 14:27
Yeah, that's right, and this is also a look at hardware, in that sense. You know, we've written a lot in recent weeks, as Victoria had mentioned, about declines in a lot of different segments of the freight sector, such as container imports that fell near a three-year low in February. Similar reports also about air cargo and intermodal and over-the-road trucking. You know, part of the reason for that is that these businesses have always been cyclical, and we're coming off of a big surge of activity during [the] pandemic. Also, of course, the Federal Reserve is fighting inflation by raising interest rates. So, those two things put the brakes on an overheated economy. But despite all that, you know, headwinds we recently heard about, you know, one part of the logistics world that seems to be doing just fine as we head into 2023, and that's truck manufacturers. Now, it turns out that sales and manufacturing for Class 8 trucks, the 18 wheelers, are, quote, healthy, heading into 2023, thanks largely to pent-up demand, and also some elevated carrier profits that happened during that big pandemic rush. Those data points come from the transportation sector analyst firm ACT Research. And ACT pointed out the same thing that we're saying here, that these trends come despite business headwinds. They listed things like a stumbling freight picture, higher financing costs, and increasingly restrictive credit availability.
David Maloney, Editorial Director, DC Velocity 16:01
Ben, did that report mentioned exactly why truck manufacturers may be able to just keep building extra trucks throughout a recession or an economic downturn?
Ben Ames, Senior News Editor, DC Velocity 16:10
Well, mostly it's that pent-up demand, is what ACT Research said, and that's for new vehicles that they weren't able to make in 2022. However, ACT did say that it looks like those truck manufacturers won't be completely immune to economic trends. ACT's president and senior analyst named Kenny Vieth, he said that they continue to expect a recession in the first half of this year, meaning 2023, and that could lead to a decline in 2023 Class 8 truck builds compared to the previous year as those freight markets, you know, increasingly weigh down the momentum that the manufacturers have, particularly heading into the second half of the year. That's because of factors like gradually but persistently lowering freight volumes and rates; higher costs; gradual exhausting, basically, of that pent-up demand. It can't go on forever. But ACT says that it doesn't believe that things like the interest rate hikes we're seeing will be aggressive enough to sharply impact the commercial vehicle manufacturing. Again, that's that robust backlog of orders that Vieth is talking about. In fact, the end of December Class 8 backlog represents the fourth-highest year-end backlog on record. So, you know, despite all the bumps, we're looking for truck builders to stay busy for a while.
David Maloney, Editorial Director, DC Velocity 17:40
Yeah, it certainly does seem that there have been a lot of backlogs we're seeing in a lot of different kinds of supply chain projects, which overall should keep the market pretty healthy in trucking, as well as warehouse and other kinds of areas, too.
Ben Ames, Senior News Editor, DC Velocity 17:52
Exactly, yep, that looks like the trend.
David Maloney, Editorial Director, DC Velocity 17:55
Ben Ames, Senior News Editor, DC Velocity 17:56
David Maloney, Editorial Director, DC Velocity 17:57
We encourage our listeners to go to DCVelocity.com for more on these and other supply chain stories. Also check out the podcast Notes section for some direct links on some of the topics that we discussed today.
And again, our thanks to Ramesh Murthy of Bob's Discount Furniture for being our guest. We welcome your comments on this topic and our other stories. You can email us at firstname.lastname@example.org.
We also encourage you to subscribe to Logistics Matters at your favorite podcast platform. Our new episodes are uploaded each Friday.
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And a reminder that Logistics Matters is sponsored by TGW. TGW is a leading global systems integrator for automated warehouse solutions. They're a one-stop provider, designing, manufacturing, implementing, and maintaining end-to-end fulfillment solutions for URBN, Gap, Jasco, TVH, and more. Learn about how to improve your supply chain operations by visiting TGW at ProMat this March in Booth #S1503.
We'll be back again next week with another edition of Logistics Matters. Be sure to join us. Until then, have a great week.
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