Retailers of all stripes have found themselves on a roller coaster ride over the past few years, thanks to fluctuating consumer demand and heightened expectations. But for home furnishing companies like Bob’s Discount Furniture, those challenges have been just the half of it. These furniture retailers have also faced escalating problems finding warehouse workers and fleet drivers.
Yet finding and retaining employees has not been much of a challenge for Bob’s, even during the depths of the pandemic. As for why it’s succeeding where others have failed, Ramesh Murthy, the company’s chief supply chain officer and executive vice president, says it all comes down to a culture that emphasizes diversity.
Murthy himself is responsible for maintaining that culture within the retailer’s end-to-end supply chain, where he oversees forecasting, planning, inventory management, inbound logistics, warehousing, and distribution. Prior to joining Bob’s, Murthy held senior supply chain positions at Hasbro, Tata Consultancy Services, CVS, and American Greetings. He recently was a guest on **{DC Velocity’}s “Logistics Matters” podcast, where he explained how his company’s focus on diversity has helped it achieve supply chain success.
Q: Could you tell us about the supply chain for Bob’s Discount Furniture, including your distribution network and transportation operations?
A: Bob’s has five distribution centers around the country serving 164 stores. The DCs include three in the Northeast, one in the Midwest, and one in California. We operate our own distribution centers, and we run our own linehaul fleet operations. All of our merchandise is sent from the distribution centers to one of 48 depots around the country, from which we provide last-mile deliveries. Our last-mile deliveries are done with third-party support.
Q: Last mile is obviously very difficult when handling bulky furniture. What do you look for in a partner to handle customer deliveries?
A: There are a lot of important things to consider. One of the big things we’ve done over the last few years is to start measuring delivery performance via net promoter scores [a market research metric based on a single survey question asking respondents how likely they’d be to recommend a product/service to a friend or colleague]. It’s a very, very important metric. So, we look for folks who are very customer service-oriented. And we’ve built [funding] into our budgets and plans to make sure the teams have enough people to physically move furniture and that they have all the right tools and capabilities. So generally, we’re trying to find some of the top last-mile providers out there.
Q: You mentioned tools that enable that last-mile delivery. What kind of tools do you offer to help those drivers make “big and bulky” deliveries?
A: Well, the tools themselves are just basic things like dollies and handcarts. We also make sure all of our folks have the appropriate footwear so they don’t scuff up the customer’s floors.
And in many cases, we even give our customers what we call the red carpet treatment: We put down a little red carpet across the threshold to make the customer feel that it’s a very important delivery for us.
Q: Do you also have technology tools that assist with those deliveries, such as routing tools and notifications to alert the customer that a truck is on its way?
A: Yes, we do. We have our own routing tools and routing capabilities. On top of that, we have a whole messaging system that keeps customers in the loop. They’ll get emails to notify them that the delivery is being scheduled as well as emails telling them when the delivery will take place. And if they’ve signed up for the service, they’ll also get text messages saying we will be coming today within this particular time window. And then generally, our folks will call the customer when they’re about 30 minutes out to make sure they’re home and to let them know they’re on their way.
Q: Bob’s Discount Furniture was recently named a top company for women to work for in transportation by the Women In Trucking Association. What steps have you taken to attract women drivers?
A: This has been a focus of our diversity and inclusion programs. And all of those elements have been a very important part of our culture at Bob’s from the very first day.
We’ve always wanted both our stores and our DCs to reflect the communities we work in. But getting women to join our ranks has required some effort. We make a concerted effort to go to places to find those folks, like working with Women In Trucking.
Today, we have reasonable female representation in a number of areas in our business—everyone from our routing director all the way through our routing managers, our administrators, our carrier partners, and our drivers. And we continue to work on that.
Q: You mentioned that you have a culture that supports diversity. Can you tell us about some of the steps you’ve taken to create that diversity?
A: So, aside from the fact that it’s sort of ingrained in how we hire, it’s also part of our core values. It’s something that our HR teams work very closely on. We do a tremendous amount of training with our folks. We measure how we’re doing on that. So now, even in our engagement surveys, we actually measure our diversity scores along the way. It gives us a read on where we are and where we’re succeeding and where we’re not. And we do a lot of training on things like unconscious bias. It just becomes a natural part of the rhythm of our day.
Q: What kind of roles do women perform in your transportation network? Are they working in inbound distribution to the stores? You mentioned that home deliveries are primarily done via third parties, but do you make any customer deliveries from your DCs?
A: No, all of the actual customer deliveries are done by our third parties. That’s just how we operate, but our own fleet drivers do everything else.
Today, just short of 10% of our fleet drivers are female. But then a lot of our service managers, the folks who are doing our routing and planning, are female. In our warehouses, a number of our managers and assistant managers are female as well. So, we’ve been trying to continue to drive that everywhere we can.
Q: As my wife would probably tell you, the last thing she’d want to do is move furniture all day. So, you have a large number of women working in your warehouses and your fleet. How does that square with the need to pick bulky furniture in the warehouse and then move it via truck?
A: Our drivers don’t have to move any goods—and that’s by design. Our drivers are leaving the goods at the depot, and then the depot teams will bring them in to get ready for the last-mile delivery. So that’s the first thing, right?
Then there are several other things we do to make these jobs more attractive. For instance, almost all of our drivers are home every day. They’re not doing long-haul trips. Even when we have our longer-haul destinations, we use teams for our linehaul so that they’re traveling part of the way, and then other teams take over. So, we’ve tried to arrange it so that people can be home every day and they don’t have to lift the heavy stuff. Those are things that really help in that regard.
Q: Employee turnover is a huge concern for the trucking industry, where annual turnover rates run as high as 90%. How does your fleet compare?
A: What if I told you that what you just described as a typical fleet’s turnover rate is slightly under our retention rate for 2022? Our retention rate across our fleet and our DCs is just north of 97%. I think that is a remarkable accomplishment on the part of our teams.
We take retention very, very seriously. We engage people daily. They can go in and just give us a happy face, frowny face, or neutral face, or they can put in a quick note to us. It’s something that we try to spend a lot of time on and that we pride ourselves on doing.
In the past year, we’ve spent a lot of time looking at the marketplace—and particularly at what we need to do to be competitive. How do we make the processes work more effectively, make sure people are paid appropriately? Those efforts have really paid off. I couldn’t be happier.
Q: What do you consider to be the keys to your transportation operation’s success?
A: I think it’s very important for us to keep trying to determine what makes us a good company to work for and make sure we’re always addressing those things that are not right. Maybe it’s processes that make it difficult to work. You asked about tools to move things earlier—all of our DCs are using lifts and equipment like that to help move products. We have one DC now with guided-by-wire technology. We’re trying to find the right technologies that will continue to help us improve our operations. But it’s very important to stay focused on the fundamentals. I think that’s what’s helped us this year, for sure, and I think that will help us as we go forward.
Q: During the height of the pandemic when people were stuck at home, a lot of them bought home furnishings. Has that slowed with the uncertain economy? What’s your outlook for the rest of the year, and how might that affect your expectations for your delivery operations?
A: We are an everyday-low-price retailer and a high-value retailer, so we have a positive outlook on the rest of 2023. As our CEO likes to say, our business model does well in good times and bad.
