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1. Background Information:
E retailing of the furniture has become one of the most emerging areas in the furnishing industry. There is a rise in the popularity of the online furniture market place and the sales of the private label. These factors along with the preferences of the customers to purchase the multi-functional furniture are driving the market growth of the online furniture business. The home furniture market has witnessed steady evolution in the past few years due to the shift in the perception of the customers to purchase the furniture from the organized brands rather than developing the furniture from the carpenters. Another reason, which has led to the rise in the market growth of the branded furniture particularly the online furniture, is the increase in the knowledge of the designs, raw materials and the pricing among the customers (ETRetail.com, 2017). Personalization and the consultation services that are offered by the online furniture retailers are one of the main attractions for the customers to purchase furniture online retailers. But there are also various challenges that are faced by the online furniture retail business law organizations. There are logistics challenges that are faced by the retailers in the online furniture business which is hampering the expansion of online furniture industry. Also there are concerns regarding the quality of the products sold on internet among the minds of the customers (Newsvoir.com, 2017).
In the furniture industry there are many concerns like it is not possible for the customers to compare the products manually from the different stores, travelling to particular stores is quite a challenge for the people who have to go to office and they do not have enough time (Christopher, 2011). Also checking the availability of the products manually in the stores is a big issue in the tier-I and metro cities. Further there are also chances of late deliveries when the consumer purchases the furniture manually. All these factors has led to the rise in the popularity of the online furniture stores among the consumers.
In the success of the e-commerce business the proper management of the supply chain and the proper logistics management plays a very crucial role and they are also important for the successful mitigation of the different issues that might arise in the business. In these kind of business, the lack of proper labor and raw materials could create quality issues which could hamper the perception of the consumer regarding the organization (Christopher, 2011). Also, as in these kinds of businesses the prices are already declared thus, if there is any rise in the cost of the final product than that has to be bared by the organization itself which could create an issue of survivability for the company (Retail.franchiseindia.com, 2017). Thus, seeing the lot of stakes in the business it is important that the organizations comply with the strict guidelines regarding the manufacturing of the furniture and also equally pay attention to the logistics of the raw materials and the finished goods. Thus, in this research paper the information system of the logistics function of the online furniture retail organization is analyzed.
2. Business Model:
The online retail furniture business model which has been presented in this research paper mainly draws its inspiration from the online furniture business that are present in the US and Australia on the manner in which they make furniture and deliver it to the customers. In this research study not much has been stressed upon the customer selection process and the internal logistics as most of the online furniture retailers have their own business models which are basically based of the segment of the customer they are targeting and the area where they mostly serve.
This paper is generally concentrated on the supply chain and the logistics function of the online furniture retail business. In the below given figure, the interdependency of the different system that are associated with the supply chain and the logistics function of the online furniture retail business. These systems will generally comprise of the customer booking, material requirement planning, sales management, warehousing and quality control, manufacturing of furniture, distribution of furniture and payment system.
Upstream- - - - - - - - - - - - - - - - - - - - - - Internal - - - - - - - - - - - - - - - - - - - - - Downstream
2.1 Customer Booking:
For the purpose of booking furniture it is important that customer is registered into the customer database of company so that the credentials of the customer could be easily verified by the system. Once the credentials of the customers are verified with the customer database, the customer enters the login details in the website for initiating the selection of the product design. There will also be scope in the system to chat or make video call to talk with the expert to finalize the design of the product which the customer wants and ask any query. Then the customer can select the specification of the furniture which he wants to order like the type of wood, dimensions of the furniture, color of the furniture and there will option for the customer to select the price range and relevant design for the furniture. Once the customer has entered his preferences, the program will search the data to give appropriate designs, which are relevant according to the needs of the customer.
In case the customer wants to change the dimensions and other parameters, he/she can do that till he did not get a relevant design or product as per his/her satisfaction. The system will also give an option to fix a visit by a design expert in case the customer wants to make a customized furniture or if he is not satisfied with the choices of design that are available on the website.
The system also offers the customer the opportunity to select his/her own material from the list provided and the design of the product that he/she wants. The system will then automatically generate a 3D model layout of the product as per the specifications that have been entered by the client. There will also be a budget estimator which will help the customer to analyze the cost of the furniture. Once the buyer is satisfied with the product he is redirected to material requirement pageThe business model for the online furniture company presented in this research study allows the customer to participate actively in the design selection process . This gives freedom to the customers to select their own design, materials to be used, colors and price range. It also gives the opportunity to ask for an design expert meet in case he/she is not satisfied with the design shown by the database.
2.2 Material requirement planning:
For the purpose of this research study it is assumed that all the designs in the database are already checked and verified by a design expert for the structural safety and longevity of the furniture. It should be important to ensure that the design of the all different types of furniture follows the highest standards and benchmarks in the industry and there should be no copyright infringement. The material that will be required for the manufacturing furniture could be easily determined by the budget from the design of the furniture or the specifications that has been entered by the customer. Once the inventory levels are checked then the purchase order is generated.
2.3 Sales Management:
On the basis of the purchase order list, the suppliers are contacted to get a suitable quote. As there are different prices for the different supplies and also there are variation in the prices of a single supply given by different suppliers thus, it becomes important to ensure that best supplies are selected at the lowest possible which meets the level of satisfaction of the customer and is also profitable for the business. The organization might decide to set up a long term partnership with the trusted suppliers which will help them to get discount on good quality material and also will help to speed up the procurement process. Once the suppliers are selected the purchase order is send to them and sales invoice is collected. Then the payments are accordingly sent and receipt and supplies are collected.
2.4 Warehousing and Quality Control:
When the supplies are received then they are sent to the warehouse where the quality control supervisors will check the quality of the supplies and accordingly the goods are accepted and sent to inventory. In case there is any loss or if the quality of the supplies does not match with the quality mentioned in the contract then the supplies are returned to the supplier. Otherwise it is entered into the stock data. Then the computer program check whether any order is pending for a particular supply and if there is a pending order then the material is forwarded to manufacturing system or else it is stocked in the inventory. Once the furniture parts are manufactured they are again sent to warehouse where they are stocked before they are sending to the final assembly section where they are installed and packaged in a proper manner before moving to distribution system.
2.5 Manufacturing of furniture
On the basis of the specifications of the customers and receiving the inventories from the warehouse, the manufacturing process of the furniture starts. The manufacturing process takes place in part wise manner where each part of the furniture is manufactured at a single time. If there is shortage of the supplies than the additional materials could be ordered.
2.6 Distribution of furniture
Once all the parts of the furniture is completed then the product is transported via load carriers to the given address of the customer along with helpers to help the customers in order to install the furniture. Once the customer receives the furniture, the he signs the receipt and feedback form, and then the proceeds to the payment option.
2.7 Payment System:
The payment will be made online using card or internet banking facility. After the distribution of furniture there will be its payment.
1.Christopher, M. (2011). Logistics & supply chain management. 1st ed.
2.ETRetail.com. (2017). ‘We operate in a very unorganised scenario’ - ET Retail. [online] Available at: http://retail.economictimes.indiatimes.com/news/home-and-decor/furniture-and-decor/we-operate-in-a-very-unorganised-scenario/42349618 [Accessed 18 Mar. 2017].
3.Newsvoir.com. (2017). Rising Popularity of Online Furniture Marketplace and Private Label Goods Sales along with Customer service Preference to Buy Multi-Functional Furniture to Drive the Market Growth: Ken Research. [online] Available at: http://www.newsvoir.com/release/rising-popularity-of-online-furniture-marketplace-and-private-label-goods-sales-along-with-customer-preference-to-buy-multi-functional-furniture-to-drive-the-market-growth-ken-research-6552.html [Accessed 18 Mar. 2017].
4.Retail.franchiseindia.com. (2017). Furniture & Home decor is driven by variety and eCommerce has the space!. [online] Available at: http://retail.franchiseindia.com/article/sector-watch/home/Furniture-Home-decor-is-driven-by-variety-and-eCommerce-has-the-space.a3543/ [Accessed 18 Mar. 2017].