Arhaus Furniture Reduces Miles Driven Per Delivery By 40 Percent
By Teresa von Fuchs
When John Roddy, now SVP of Logistics, joined Arhaus Furniture a decade ago he knew the company needed to streamline its processes in order to expand the business. He also knew that technology would be a part of that upgrade process. But he never guessed how dramatically an innovative technology partner would enable the company to improve on its core values while doubling the size of its business.
Founded in 1986, Arhaus' mission continues to be to "provide unique, high-quality, well-designed home furnishings direct to our customers." Part and parcel with that is the company's commitment to service from beginning to end of each interaction.
When Roddy joined the company, those values were strongly in place, though with 15 stores and a growing catalogue business, Arhaus was struggling to meet customer demand. A fulltime staff of eight customer service representatives worked with a dispatcher trying to steer drivers to deliver orders within the four-hour window the company promised its customers. Roddy knew this process, which often required representatives to spend days of playing phone tag to coordinate with customers, could be improved with the right application.
The company had an ERP system that could have been adapted, but "it wasn't friendly, and we didn't want customers to have to interact with a system that wasn't easy to use," says Roddy. "From an operational standpoint, it wasn't as scalable as we now know we needed." Roddy was looking into potential solutions when a member of Arhaus' board told him about meeting the founders of TOA Technologies at a conference.
Roddy says as soon as he gave TOA a call he recognized what has been missing from the other solutions he'd been investigating. Roddy says he had been looking for a technology solution, but what he found instead was a partner that has grown, adapted and even anticipated Arhaus' changing needs over the years.
In the beginning, the solution was designed mainly to relieve Arhaus of the time-consuming process of coordinating delivery schedules with customers. In 2004, with its first implementation of TOA's software as a service (SaaS), that piece of the puzzle was reduced from taking eight full time employees up to three days per delivery, to one dispatcher spending one hour per week per delivery. And the company was able to narrow its delivery window from four hours to two.
"The incredible thing about TOA's technology is that it's a learning system," says Roddy, "As we went along and saw the solution delivering on its promise, we saw all this data rolling in. After a year we sat back down and started using that info to improve route performance."
By 2006, it upgraded the customer and driver interfaces, simplifying them with a color-coded response system. The company also created a huge "dashboard," so that the single dispatcher now watches every route in real time.
With the company's continued expansion, total routes are up to 25 in 14 states with 52 different drivers. In 2007, the company implemented a way to let customers choose how they want to be contacted to schedule a delivery once their purchase is ready, and how they want to be contacted the day of that delivery.
All along, the solution has been learning from the data it collects about the various routes, about how long it takes drivers to perform different types of deliveries in all of the company's different markets, and improving those processes every day.
In that time, Arhaus operations have grown to 36 stores and a booming catalogue and Internet business. The company has decreased its miles driven per delivery by 40%, and increased deliveries per hour by 38%, while increasing its customer satisfaction ratings from 81% 10 years ago to 95% today. The company's overall approval rating for delivery people has reached an industry high of 97%.
Next, Arhaus is rolling out a feature that will send customers a photo of their delivery driver once the delivery time is confirmed. "Our data shows that almost 90% of deliveries are received by females with kids at home," says Roddy, "Giving them a photo of their driver will allow them to feel more secure that the burly guy who just knocked on their door is in fact there to deliver the furniture."
Arhaus is also about to halve its delivery window again, from two hours down to one. And, in another customer-centric and cost saving upgrade, TOA has been working with the company for the past year on making its delivery process paperless.
"Through all these years, TOA has been incredibly diligent about keeping us up-to-date about solution updates and what other customers are able to do with their product; it's refreshing how they've worked to really help us improve our business," says Roddy.
Currently, drivers still use paper invoices to capture customer signatures, and the office still scans all that paper at the end of each day or work week. Roddy estimates the company will save at least $60,000 a year in paper costs alone once the new technology rolls out.
"Most important is how this will allow us to work with customers," says Roddy, "Let's just say that someone's furniture is delivered and it's damaged or they don't like it. It could take us four to five days to sort this out by the time the invoices get back to the office and get scanned, etc. With this last piece, drivers would be able to address any number of customer issues right from the point of delivery."