American Signature Inc. knows its supply chain and warehouse operations need a complete overhaul. As Suzanne Kiggin, vice president of operations for the furniture retail chain, bluntly put it: The technology is very old.
American Signature’s current supply chain technology is powerful, as it integrates with the warehouse, delivery and warranty systems, Kiggin said. But, it is outdated and a barrier to growth, customer satisfaction and recruiting top talent to work with the technology, Kiggin told Digital Commerce 360 at Manhattan Associates Inc. Momentum 2023 conference in Phoenix last week.
Inventory accuracy and working with old technology
“Some of the major pain points were inventory integrity and knowing where it was and if it was real,” Kiggin said.
For example, if a shopper wants to order a couch, the associate could look up the inventory level of that couch on his iPad or on the checkout desktop terminal. Often, those inventory numbers didn’t match. These numbers also likely didn’t match the online inventory system.
American Signature always gives shoppers an estimated delivery date for their product. But because it lacked an accurate inventory count, it only met that promise 60% of the time, Kiggin said.
Inventory integrity is important with the furniture category, as the majority of sales for bulky pieces are made in store and delivered to the shopper’s home. Few shoppers buy in store and leave with the product. Kiggin said about 7% of its sales are online, a number it wants to grow.
Kim Huebner, director, store operations said the current supply chain technology is an AS/400 system from the 1980s. She described it as looking like a DOS screen, with function keys and green type, and no graphical interface.
“We were very clear on where we were. That was not the hard piece. The harder piece was defining where we wanted to go and how to get there,” Kiggin said.
American Signature selected and began working on upgrading its system with six of Manhattan Associates’ applications in January 2022. They were: Warehouse management, order management, point of sale, customer engagement, customer service and customer service index reporting suite.
The retailer is currently testing the warehouse management and order management platforms, scheduled to go live in early June. The merchant will test and implement the remaining four applications for the rest of the year and with a go-live date of 2024, Huebner said.
Implementing warehouse management and order management
Of American Signature’s four distribution centers, one of them is currently testing the new Manhattan technology alongside its current technology to ensure everything is functioning correctly. So far, so good, Huebner said.
Training its warehouse employees on the new system only took three hours, and the employees were happy to have a better system, Huebner said. American Signature decided to train employees with bite-sized short videos, instead of long handouts to read. It took about a week, or roughly 40 hours, to train its middle group of above entry entry-level employees. It took roughly 40 hours to train its warehouse leaders on the new system.
American Signature will measure the success of these systems by how much its labor management standards at the distribution center are maintained or improved, she said. These metrics include speed of picking, speed of processing and speed of loading.
“Time is money,” Kiggin said.
With the improved system, the goal for American Signature is to meet its delivery promise at least 85% of the time, Huebner said. While 100% is really the goal, the retailer factors in changes that a customer makes after purchase, such as changing a design element on a custom-made piece of furniture or choosing to switch the delivery date because of their own personal circumstances.
Getting buy-in from employees on the new system
As a family-owned company, Kiggin said it was important to American Signature’s management to incorporate many employees in the overhaul process. This included the end-users of the product.
For all of its new systems, American Signature is pulling employees out of their day jobs to put them on the project. This helps ensure that employees using the software can make it the most functional for their jobs, Huebner said. This also helps with buy-in when the systems go live and some employees might be resistant to change.
American Signature gives continual updates to warehouse managers not directly involved in the project. They can still voice their opinions, Huebner said.
Kiggin would not reveal the overall cost but says it is “way over” $1 million.
“It’s a significant investment. And it’s worth every penny,” Kiggin said.
Kiggin described it as a long-term investment, as the Manhattan technology will continue to update and improve alongside the American Signature business.
American Signature is the parent company of Value City Furniture and ranks No. 592 in the 2023 Digital Commerce 360 Top 1000.
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