Ashley Furniture Steers Clear of Outsourcing Deliveries

ARCARDIA, WI -- Bucking the trend toward outsourcing trucks and drivers, Ashley Furniture makes it own truck deliveries, adding profits through its handling of logistics.

Ashley Furniture Industries, the largest maker and retailer of furniture in the U.S. owns and operates about 800 trucks and delivers almost all of its products from factories to stores. Rather than viewing the delivery process as an expensive burden better left to outside experts, the company has turned logistics into a competitive advantage and makes additional money by loading up its trucks on return trips.

Ashley says its drivers are more reliable than third parties would be. Todd Wanek, CEO of the family-owned company, recently told The Wall Street Journal, "We think it is a core competency."

Its fleet delivers an exceptional product in that furniture comes in all sorts of odd shapes and much of it is fragile. It's like arranging pieces of a jigsaw puzzle, and if not done right, damage is likely. Ashley's drivers get paid extra to load and unload trucks; their average earnings are more than $70,000 a year.

Ashley employs about 3,000 people in transport and warehouse functions, nearly one-fourth of its total U.S. head count. Its distribution centers feature specially designed racks to speed loading, and after trucks deliver their furniture they carry loads for other firms for a fee. Its drivers are called, "Ashley Ambassadors" because they are expected to become friendly with retailers, creating goodwill and resolving problems.

According to supply chain consultant Mark Pearson of Accenture, Ashley's approach isn't typical, and most manufacturers switching to a third-party transport service expect greater reliability and savings of at least 10%.

Ashley's competitor La-Z-Boy Inc., the nation's second-largest furniture maker, is expanding its own truck fleet, though it still relies heavily on outside contractors. Echoing a sentiment heard among many U.S. manufacturers, a company spokeswoman says building a fleet will be a slow process. Perhaps the biggest problem is it's tough to find experienced drivers.

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