In the latest sign of the post-pandemic disarray in the US economy, even companies that have built national supply chains are facing extreme shortages of goods and labor.
Furniture chain Room & Board Inc. buys more than 90% of its products in the United States, with its nearest supplier located about 4 miles (6.4 km) from its Minneapolis headquarters, unlike many. of its competitors, whose supply chains can be traced back to factories in China.
“We are falling short of our ultimate goals,” said Bruce Champeau, President of Room & Board.
Robert Arbaugh bought a kitchen table, four chairs and a couch from Room & Board last year after moving into a condominium in Philadelphia. His furniture was due in a month. Instead, it took six, spread over five deliveries.
“I had nothing to sit on,” said Arbaugh, who works for a pharmaceutical company. He said he was considering canceling the order but other retailers were reporting similar delays. The final piece, a brown leather accent chair, arrived last month.
It’s a tough time to buy a sofa. Manufacturing and shipping delays delayed delivery times across the industry by several months. This has limited the ability of many manufacturers to capitalize on demand. IKEA is running out of furniture in some US stores, and a Design Within Reach promotion offers discounts on purchases of in-stock items. Some furniture buyers have expressed frustration with long waits online.
Like many businesses, Room & Board and its suppliers largely closed their doors last March when the pandemic hit the United States. The retailer was quickly inundated with orders as people stuck in their homes upgraded their living rooms and purchased new outdoor dining sets.
Demand has not weakened. Consumer spending on furniture and appliances in the first quarter of this year remains nearly 30% higher than this period in 2019, before the start of the pandemic, according to federal data.
Room & Board forecasts sales of $ 650 million this year at its 19 stores, up from around $ 500 million in 2020. The company estimates revenue would have reached $ 700 million this year if it weren’t for its supply chain. not that complicated.
A neighboring supplier, Minneapolis-based Bell Manufacturing and Services Inc., has increased its workforce by about a fifth to 135, but demand for its metal tables and shelves has more than doubled. Orders can take up to 20 weeks to ship, up from five weeks before the pandemic.
“Our current orders go way beyond what we can produce now,” said Judy Bell, vice president of Bell.
Another bedroom and board supplier, Loll Designs, based in Duluth, Minnesota, changes production schedules based on the colors of polyethylene it receives into Adirondack chairs. Winter storms in Texas earlier this year disrupted production of many petroleum products.
A supplier told Loll Designs in May that the resin he needed to make red polyethylene would arrive a day late. This quickly translated into production delays at Loll Designs and possible shipping delays for Room & Board customers. The retailer says it won’t ship a bright blue Loll chair until November.
“It’s pretty regular day-to-day,” said Nate Heydt, who heads business development at Loll.
Room & Board added new domestic manufacturers to its production network to reduce backlogs and research more. He also urged suppliers to increase capacity, telling them he expects demand for home furniture to remain strong even as people return to offices, restaurants and hotels.
Gene Wilson, the company’s head of merchandising, traveled to Grand Forks, North Dakota in February to convince Wood-Products Inc., a manufacturer of wood dressers, cabinets and other furniture , to add machines and a second shift.
“They are at the point where they will soon hit a capacity cap,” Wilson said.
Wood-Products Managing Director Mark Cutshaw decided to invest in higher production. The company has added a second shift where workers apply stains to furniture. Wood-Products also hired its first human resources manager, added benefits and increased starting pay to around $ 15 an hour.
Food trucks were brought in on Thursday to spice up lunch options for workers. One recent week, the Bratwurst Kings truck made bites of potatoes topped with meat and cheese, a dish he calls “redneck nachos”.
Wood-Products also got Room & Board to agree to increase the wholesale prices it pays for Wood-Products furniture, in part to reflect record lumber prices. Room & Board has stated that it will not change the prices from those shown in its catalog.
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Other retailers and manufacturers have brought supply chains back to the United States from overseas in recent years, in an effort to simplify their operations and attract customers by pledging to support domestic jobs. More companies have done so during the pandemic, as travel restrictions and export embargoes have plagued global trade. Some barriers to international trade are rising as cases of Covid-19 rise at manufacturing plants in Asia.
Despite the recent challenges, Room & Board’s Champeau said he believes sourcing all of the company’s furniture in the United States is a better strategy over time.
“We can control the quality much more efficiently,” he said. “We can offer more choice and personalized options. “
Write to Austen Hufford à [email protected]
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