Taking greater control of inbound logistics is an opportunity to not only reduce costs, but also to forge more collaborative relationships with internal groups, suppliers, and transportation carriers, which ultimately results in “smarter” business processes that benefit all parties.  One opportunity to do this lied in the inbound logistics departments of two competing office furniture manufacturers.  This is the story from Haworth’s perspective.    

Inbound Logistics: A Catalyst for Supplier Collaboration

Everyone is talking about collaboration these days, and few people question its importance, but determining a good starting point has been a challenge. Companies such as Steelcase, Haworth and Trendway, in the office furniture sector, with the help of a third party enabler, Supply Chain Solutions, Inc., have focused on their inbound logistics operations as a means to collaborate more effectively with suppliers and each other to achieve reduced cost and to support service requirements.

While the primary goal has traditionally been to lower transportation costs, these companies are taking a more holistic perspective in hopes of creating supply chains that are more responsive and cost efficient.

Taking greater control of inbound logistics is a top priority for many manufacturers and retailers as they look for cost-improvement opportunities in response to the struggling economy. Companies have historically focused on their outbound operations because it’s the customer-acing side of the business, while control of inbound operations was generally relinquished to suppliers. But now that outbound operations have been streamlined and extracting additional benefits has become more difficult, companies are turning their attention to the inbound process, and they’re realizing that plenty of money is being left on the table. Additional benefits include:

• Support lean manufacturing
• Increased compliance with routing guides
• Mode Conversion and Freight Consolidations
• Less Inventory due to better visibility of inbound shipments
• Improved supplier relationships
• Better alignment of logistics operations via appointment scheduling
• Increased asset utilization via inbound to outbound continuous moves

While some larger companies have forced the change on their suppliers, others are proceeding in a more collaborative manner to create stronger relationships with their suppliers and transportation providers, which ultimately results in “smarter” business processes that benefit all parties.

Haworth

Designers at Haworth sit at their cubicles and think about ... more cubicles. The company is one of the top office furniture manufacturers in the US and offers a full range of furniture known for its innovative design, including partitions, desks, chairs, tables, and storage products.  Haworth is owned by the family of Gerrard Haworth, who founded the company in 1948. The company sells its products in more than 120 countries worldwide through more than 800 dealers.

Though the company has a reputation for being efficient, the soft market for furniture has hit Haworth as hard as its competitors, compelling a need to look at all aspects of cost reduction.. Haworth relied mostly on its suppliers and manual processes to coordinate inbound transportation, but the company realized the immense savings potential from optimizing its inbound supply chain.

Supply Chain Solutions, Inc. was selected as a service provider to Haworth based on a number of factors, including affordability, ease of system integration, its inbound office furniture expertise, and ability to provide end-to-end visibility. The first phase of the partnership, which included an inbound transportation collaboration pilot with Steelcase, took only one month to complete. The second phase, which is currently underway, includes adding additional collaboration suppliers and carriers with Steelcase, as well as bringing Trendway into the project.

Jeff Miller, purchasing manager at Haworth notes, “The primary driving force behind the project was to facilitate both internal and external collaboration to significantly reduce our costs and support our lean initiatives. We used Supply Chain Solutions, Inc. to bridge the procurement and transportation silos across our operations to drive-real-time decision making.  Many of our teams were involved in the selection process, giving them a stake in the project’s success.”  

Suppliers and carriers, although they recognized the project would also facilitate their activities, initially feared they would need to invest in IT or dedicate resources to the effort. These concerns were quickly alleviated when they were introduced to the Supply Chain Solutions, Inc. web support tools, which simply require a Web browser and an Internet connection. To date, Haworth has realized savings via better utilization of resources and fewer expedited shipments, and the company expects to achieve ROI in less than six months.

Now Expanding Globally

After witnessing the benefits of the domestic collaboration, Haworth is now looking into the idea of expanding the process globally.  As more and more sourcing initiatives take place overseas, it is only natural to share the capacity of ocean containers as well as the inbound flow of goods once the products arrives on U.S. soil.  Along with the concept of Global Collaboration, Supply Chain Solutions’ Global Supply Chain Experts allow companies that do not have a significant amount of overseas volume to take advantage of rate structures, overseas consolidation networks, and domestic deconsolidation centers.  Moreover, the ability of Supply Chain Solutions to have one central visibility website for the total global supply chain makes process management much simpler for everyone involved.