Furniture industry
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Furniture industry
Specifics of activity in furniture industry
- High development dynamics.
- Seasonal prevalence of sales, and therefore unequal profit distribution.
- Short life cycle of goods comparing to other industries.
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- Reducing pace of market growth, %:
2005 — 16,3;
2006 — 12,8;
2007 — 11,3;
2008 — 10,9;
2009 — 9,8;
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The following major problematic zones can be identified taking into consideration specifics of furniture industry:
In warehouse facility management
- Low efficiency of warehouse facility use, both own and rented ones due to use of pile type of storing,
- Major inventory items have sizes not fitting in standard module (400 mm Õ 600 mm), which also makes storage complicated and they can be treated as outsized cargo.
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- Inventory costs, mainly re-grading, due to large amount of inventory items, variety of color design, as well as large number of opportunities for packing arrangements of ready products.
- Damage of ready products upon warehousing due to large number of outsized packing..
- Large number of cargo modules used for storing.
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In stock management
- High level of ready products stocks not stipulated by demand
- Upon loading of equipment there is a conflict between production and sales – reason is in optimal production amount upon loading of equipment.
- Large amount of illiquid assets due to short life cycle of the product.
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- Redundant stocks of material and technical resources and furniture due to long-term period of delivery order, as well as limitations of vendors on items change in an order.
- As a rule in case of serial production of goods there is a conflict between production and sales which is explained by a need to set up a portion of production being optimal from the point of view of equipment load.
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In transport management
- High transportation expenses on promotion of ready products within sales channels due to variety of packing places and their physical parameters (length, width, height).
- Idle time of transport in loading and off-loading due to large portion of unpacked transportation and need in manual load of cargo
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- Loss in transportation due to unpacked transportation, and as a consequence, breakage and mechanical damage of cargo during transportation.
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In service maintenance sphere
- Expenses of service maintenance for consumers in substitution of spare parts and components within set time frames of service
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- Large costs of labor and other resources in delivery and assembly of furniture to final consumers
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Our proposals on business efficiency increase with taking into consideration its specifics and most commonly presented problems:
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Based on assessment of our experts, implementation of logistics projects in furniture industry permits increase of efficiency of business taking into consideration of the industry’s specifics, as well as to determine and solve commonly presented problems, and to achieve success in the following indicators:
| Indicator |
Outcome |
| Increase in sales volume |
from 10 to 35% |
| Reduction of order execution time |
up to 50% |
Reaching of demand satisfaction level
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up to 90–93% |
Reduction of delivery terms
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by 25–35% |
| Increase in stock turnover growth |
from 30–40% |
| Reduction of logistics costs (from the current level) |
from 10–20% |
| Planning time reduction |
up to 80% |
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Ìetal trade | Oil production | Furniture industry | Pharmaceutics | Ìetallurgy | Ìechanical engineering | Chemical industry | Power industry
