Steelcase, Inc.
Movement – Around the Office and Around the World

With roots dating back nearly 100 years, Grand Rapids-based Steelcase, Inc. is one of the most successful contract office furniture manufacturers in United States history.  With 14,000 employees worldwide, 35 manufacturing facilities and more than 900 dealers, the Steelcase supply chain had to grow and expand as fast as the company did. 

In recent years, finding ways for Steelcase to make that supply chain more efficient became a top priority for everyone – from senior leadership on down.

At this point, Supply Chain Solutions, Inc. (SCS) entered the picture. 

Steelcase and SCS both recognized that the Steelcase supply chain had reached a turning point.  Its growth, the business effects of 9/11, and customer requirements for on-demand, highly customized office furniture had become more intense.  The need for change was being driven by the demands of a more international dealer base, a group of professionals as dedicated to customer service as they come.  

“We started seeing the path for how we could make a difference once we started interviewing Steelcase’s dealers,” said COO of Supply Chain Solutions Jim Ward.  “They were asking for shorter lead times, and reliable and consolidated delivery of product.  ‘One order, one delivery’ became the mantra that we all embraced before designing a more efficient system for them.” 

In the business of furniture delivery, one can only imagine how important that efficiency is.  At any given time, day or night, something is moving in the supply chain.  It might be a small bolt coming in from China or an entire wall-sized office panel going to a customer in Houston.  The variety, size and scope of product movement are endless.  

Said Joe Verbraska, vice president of transportation for Steelcase, “Everything we do must improve the customer experience.  The supply chain is a big part of that – if we can meet the needs of our dealers, they can keep their commitments to the customer, and ultimately, the customer’s relationship with us is solidified.  The team at Supply Chain Solutions is as passionate about customer closeness as we are, so they were the perfect partner to help us.”

As is often the case, however, there can be unique challenges with a massive project such as this.  

One arose from the large number of manufacturing facilities that Steelcase has. Depending on whether the furniture being made is of steel, wood, plastic and the fabrics chosen, parts can travel between several of the 30-plus facilities before a complete product is made.  This meant that many roads were well-traveled by Steelcase trucks, but not always in the most efficient route possible, and not always full. 

That was the first phase – ensuring that each inbound shipment to one of the Grand Rapids facilities came on a full truck.  In order to make that happen, the SCS team proposed that Steelcase work with one of its competitors who also operates locally.  After all, both companies were bringing in parts from some of the same suppliers.  This collaboration effort was eventually credited for saving Steelcase 35 percent over historical inbound costs.

“That was just the beginning,” said John Benoist, one of SCS’s project managers.  “We really built our relationship with Steelcase during that time, because they only paid us if we were able to save them money.  We proved ourselves, and took a risk because we knew we could help them.” 

A second challenge was Steelcase customers’ demand for one delivery for large orders that came from all over the globe.  To meet this need, SCS developed a new physical distribution strategy for Steelcase.  The answer involved a number of regional distribution centers, two of which are up and running today.  In the future, those centers will serve as more than just central warehouses for the organizing of orders.  They will offer value-added services like light assembly, finishing and other steps that will reduce the need to send unfinished products to other Steelcase facilities for final touches.

The new distribution model has been crucial for Joe Verbraska, who is directly responsible for his team’s financial performance and cost-cutting initiatives.

“Our dealers enjoy the fact that fewer trucks are coming to their facilities,” Verbraska said. “They can clearly see the value of what my team and SCS are bringing to the table.  Our new system is really just getting started, and we expect the improvements to continue making a positive impact for years to come.”

Another part of the puzzle was finding the right technology for suppliers, dealers and transportation carriers to work from.  With the help of LogicTools, SCS was able to test its new North American distribution model for Steelcase, find and fix any kinks in it, and keep the information updated.  LogicTools also assisted in validating the cost savings model necessary to change a large, nationwide distribution system.

“As of mid-2005, Supply Chain Solutions has been working with us for four years,” Verbraska said. “They’ve allowed us so much flexibility without having to invest in technological and human assets that would have cost us a fortune.  Their ideas work, the savings are real, and they have optimized our infrastructure.”

Verbraska also appreciates the SCS team’s creativity and commitment, noting that SCS helped Steelcase become easier to do business with, and brought new ideas to the table with each meeting.

Verbraksa categorized the changes as positive and the savings as dramatic.  “Supply Chain Solutions’ efforts have helped us immensely with improving the customer experience,” he said.  “They had the knowledge and the implementation skills to drive our solution in a shorter period of time.  For that, we are thankful.”