Fingers crossed at MFI
Winter sale to test new system
Pre-Christmas orders over the next few weeks will test whether furniture retailer MFI has done enough to address the supply chain problem which have hit sales over most of this year.
MFI said it has been working in conjunction with its IT partners to improve the performance of its supply chain systems over the past two months.
The group’s Howden Joinery business has traded successfully through its busiest period, while the UK retail arm has halved the proportion of incomplete deliveries over the last four weeks, averaging half the level of September this year, 04 and running at the same levels as last year.
MFI launched a supply chain upgrade in March to replace systems, some 20 years old, which “were not designed to accommodate the complex requirements of home delivery in UK retail or the range of products now sold.”
Technical problems with the new system hit stock availability and meant longer delivery lead times for bought-in products. Further problems arose in August, highlighting the need for better data quality and more accurate inventory forecasting.
Actions taken have included improving stock availability, increasing the effectiveness of home delivery and fulfilling incomplete orders, and boosting system performance. As a result, average bed delivery times have been cut from five weeks to two weeks, and first time availability of appliances has now reached 91 per cent.
MFI said it is well positioned commercially for its winter sale, but warned that “pre-testing cannot eliminate entirely the possibility of new problems occurring when the system is operating at increased levels on a daily basis for a protracted period”. It expects home deliveries over the next two weeks to reach the daily rate required for the winter sale, “testing the system’s capability to operate deliveries at this level.”
The group’s overall trading performance for the current financial year is in line with management expectations. A stronger performance at Howden Joinery balancing the shortfall in UK Retail, which is mainly the the result of lower than expected sales of kitchen cabinets through the Hygena @ Currys offer.
MFI’s vulnerabilty has seen it linked to takeover rumours over recent weeks, with retail group GUS named as a potential buyer.
