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GDC-TBS and
City Furniture
republished with permission from FURNITURE|TODAY MARCH
23, 2009
City Furniture: A ‘lean’ machine
By Clint Engel
FORT LAUDERDALE, Fla.
Several years ago, when City Furniture President
Keith Koenig’s son Andrew was in college, Andrew became
enamored of Toyota and its automobile production system.
At some point, Andrew — now operations manager for
City — talked his father into taking a trip to Japan
during a school break and started giving him books to
read, like “The Toyota Way” by Jeffrey Liker and “The
Machine that Changed the World” by James Womack, Daniel
Jones and Daniel Roos. Womack coined the word “lean” to
characterize processes that Toyota has been perfecting
now for decades — the practice of continuous improvement
through the elimination of waste.
Keith Koenig’s
reaction to the trip and all this new information was,
“Wow — I’ve been looking for this my whole life.”
|
All
merchandise received and shipped by City
Furniture goes through the main center aisle
of its Fort Lauderdale-area distribution
center, which has undergone a lean
conversion. New signage and floor tape help
direct traffic. |
Today, the 25-store City Furniture is two years into
its lean initiatives, and Koenig said the experience has
been “absolutely transformational.”
“If we had not made the progress through lean that
we’ve made in the last two years, our future wouldn’t be
nearly as bright,” he said. “We’ve been able to manage
the downturn pretty darn well.”
Lean principles have been used by many manufacturers
in the United States and other countries, but it remains
rare to find a retailer so engaged. Indeed, City is most
likely the first furniture store chain to make such a
deep commitment to the shift, said Dave Francis,
director of implementation for Charlotte, N.C.-based GDC
Total Business Solutions, the consulting firm and lean
expert City called in for help.
Francis called City a
“lean success story” and its 909,000- square-foot
distribution center in the Fort Lauderdale area a
“Generation 1 lean warehouse,” in which all the areas
have gone through some sort of lean conversion.
“It’s the first time we’ve ever seen lean in every
department,” Francis said. “It’s a testament to the
focus coming from the top.”
|
City’s chair assemblers work around
a U-shaped table while runners bring them
pieces as needed. The area was the first to
undergo a lean conversion, and the
assemblers’ productivity has more than
doubled. |
For a retailer, lean can extend beyond the
distribution center. City is in the process of bringing
the lean approach to its sales floor this year.
Full
lean implementation can lead to 30% improvement in
productivity and sometimes more — dramatic results that
the Top 100 company already is enjoying.
“And it’s not improvement I came up with,” Koenig
said. “Lean is all about associate involvement,
particularly involvement in ‘kaizen’ events, a big tool
of lean.”
In Japanese, Koenig added, kaizen means “good
change.”
“The way it works is, if you’ve learned lean —
and we have with the right consulting agency helping us
— and learn how to use the lean tools, particularly
kaizen, you can squeeze a lot of waste out of the whole
process.
In the 1996 book “Lean Thinking,” and on the Lean
Enterprise Institute’s Web sites, lean is boiled down to
these five principles:
- Specify value, which is determined by the end
customer.
- Identify the steps in the value stream, which is
every step it takes to create that value, and
eliminate those that don’t.
- Flow, or getting those value stream steps to
flow smoothly.
- Pull, which is making just what the customer
tells you to make instead of forecasting. Or, in the
retail world: delivering or pulling to fulfill
customer orders or near-term expectations of those
orders.
- Pursue perfection, which suggests that that the
process of eliminating waste and cutting time,
effort, cost and mistakes is a continuous one.
 Here’s
how the first lean conversion worked for City in its
chair assembly area. Before the conversion, the
retailer’s assemblers did it all. They retrieved their
carton of parts They opened and laid out the chair
pieces on a table lined with other assemblers, and they
went to work — constructing, then inspecting, leveling
and placing the finished chairs back on a cart to be
loaded in the warehouse. Each assembler was producing
three to four chairs an hour.After a kaizen event, which takes ideas from the
people who are doing the work in the department, and
after subsequent changes in flow, the assembly area took
on a U shape. The “assemblers” now are positioned on the
outside of the U, while “runners” — a new position —
bring the unassembled chair pieces to the team as
needed. The runners uncart the components. After the
chair is assembled and leveled, it moves to a staging
lane, where “handlers” then either prepare it for
inventory, customer pickup or delivery.
As Curtis Walker, president and CEO of GDC, described
it, the assemblers became the “rock stars.” The goods
are brought to them and prepared “so they can spend all
their time on what they do best.” Through the use of
lean thinking and practices, City and GDC created
consistency and a more efficient standard.
The result:
assemblers now build nine to 10 chairs an hour. The new
positions of runner and handler were created using
City’s assembler employees — with some cycling through
the various positions as needed.
 City
has held more than a dozen kaizen events throughout its
distribution center for tasks such as receiving and
staging, repairing, customer pickup, recycling, and
delivery truck preparation and loading. A session even
was held on battery maintenance — which involved
improving how batteries are changed on equipment such as
stockpickers, tuggers and golf carts.
Before these
events, a lot happened to bring City to the place it
needed to be to make the needed changes both in its
operations and business culture.
It started with GDC’s
initiation of the overall lean project and training of
City’s senior and upper-level management team. This
training is a three- to four month process, GDC’s Walker
said.
After that, additional “master training” began for
about 20 key City staffers. These are engineers,
controllers and supervisors — employees that City
considers to be future leaders, who think analytically
and are positioned for growth.
They’re also the people that will enable City to
continue on its lean journey after GDC leaves. The
master training takes about 42 weeks, and lean projects
are implemented along the way, so the team gets a feel
for how easy or difficult a conversion may be. All along
the way, City is aiming to foster a culture of employee
participation so that the changes are sustainable and
the entire team recognizes themselves as part of the
solution.
Walker said most businesses that truly
implement lean will see a 30% to 40% decrease in overall
operations costs. But he also tells clients that for the
first two years, 15% to 20% of that improvement goes
back as an investment in the process, paying for
employees’ time and the consultant’s fee.
“We pay for
ourselves,” Walker said. Francis added that as City’s
sales increase over time, its operating costs should
remain relatively flat because it won’t have to add so
many people or expand its back-end operations.
 “So
it scales very rapidly,” he said. “That cost savings
goes directly to the bottom line.”
GDC also tells
clients that once lean has been implemented for about
six months, it will soon be time to address the sales
side of the business, because the newfound efficiency
will be so evident that sales will need to increase in
order to keep everyone busy. One goal of lean, he said,
is to make people and processes more productive — not to
eliminate people.
In general, it will take about 18 months for a committed
company to achieve lean status, but Walker added that
the true lean thinkers realize it’s never really
completed, and you can count Koenig in that camp.
 “It’s
about cultural conversion to a participative, involved
workforce,” Koenig said. “The results (in terms of both
productivity and morale) are extraordinary, and we’re
very early in the process. We’re only two years into it.
Toyota has been doing it for 50 years and they think
they’re halfway there.”
Even in one of the toughest economic climates, Koenig
said, “I’m more excited about this year than ever
because of lean. This year, we’re going to get into our
sales organization.” City already has held one kaizen
event for sales this year and a half dozen more sessions
are planned.
“If you think about the value stream map
of a sales associate, it’s really interaction with
customers, making presentations and writing up orders,”
Koenig said.
“Sometimes on slow days there’s a lot of
empty time in there. That’s called waste. It’s not
making them money. It’s not making us money, and we’re
going to look at how to eliminate that waste.
“I’m quite
confident we will do it.”
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