FF&E Risk Analysis: Can Your Process Survive the Next Supply Chain Disruption?

During the COVID-19 pandemic, retailers with large-scale FF&E needs faced unprecedented challenges due to supply chain upheaval. Now that the pendulum has swung back to some normalcy, it may be business as usual.

But with so many unknowns around tariffs, global unrest, and other threats to the status quo, have you taken measures that make you less vulnerable to the next supply chain crisis?  

In the following, we’ll examine three possible risks in your current FF&E process and also explore how consolidating your FF&E can mitigate them. But before we do that, let’s revisit the supply chain pain retailers like you endured just a few years ago. 

(For an overview on the benefits of FF&E consolidation, check out this brief video.)

How supply chain problems reached a peak (and why it can happen again)

The COVID-19 pandemic caused construction, manufacturing, shipping, and delivery delays worldwide while also spawning inflation and labor shortages. And a war breaking out in Eastern Europe only added to the chaos. Retailers needing FF&E for store projects encountered:  

• A ripple effect of delays. Labor shortages and raw material delays cascaded down the supply chain, ultimately upending project schedules in many cases. 

• Increased costs. Soaring raw material prices and reliance on third-party distributors drove up fixture costs—sometimes by 100% or more.

Fixture scarcity. Retailers scrambled to find vendors, some of whom enforced quotas or referred them to costly third-party distributors (see directly above).

So that was then. But the future is hardly free from risk. Consider these potentially disruptive factors:  

• Persistent—and looming—geopolitical conflicts
• Increased frequency of natural disasters and extreme weather 
• Tariff hikes and unpredictable international trade tensions
• The possibility of another pandemic (or even a regional epidemic)

Let’s circle back to where your current FF&E process might leave you vulnerable—and point out how FF&E consolidation can provide a safety net.

Risk 1. You’re over-reliant on factory-direct shipments

Factory-direct, just-in-time inventory strategies have a razor-thin margin for error, even in the best of conditions. But this fact becomes an even bigger liability during supply chain upheaval.

“When you live and die by perfectly timed shipments to store sites, you have no recourse when your manufacturer has any kind of hiccup,” says Phil Vines, Director of Business Development at Store Opening Solutions.

Ultimately, a project schedule you carefully laid out months before could be turned upside down. Now you have to handle a stream of logistical headaches as you scramble to redirect orders and confront the damage from delays, which can include lost revenue you’ll never recoup.

How FF&E consolidation mitigates your risks:

• Build a safety stock. Utilize a dedicated warehouse space to store critical FF&E and create a buffer to supply chain disruptions.
  
• Capitalize on cost savings. Stockpile fixtures when material costs drop to insulate against future price spikes.
  
• Maintain flexibility. Ramp up fixture orders at the first sign of supply chain trouble, reducing the risk of major project delays.

(For related info, check out how FF&E consolidation helped Dollar General open more than 1,000 stores in 2021.)

Risk 2. You rely on single vendors for critical FF&E

If factory-direct, store-specific orders are the norm for you (see No. 1), your risk is compounded when you rely on single suppliers, especially for store-critical fixtures. 

These vendors need to understand your program in great detail and develop production timelines to meet your project schedule. And that means a lot of time-consuming pre-production planning.

But when they face delays, labor shortages, or material shortages, your entire program could grind to a halt. Meanwhile, it may be difficult to pivot quickly because of all the time it takes to onboard a new manufacturer.

How FF&E consolidation mitigates your risks:

• Diversify your suppliers more efficiently. All your vendors have to do is produce fixtures to your specs and then ship them to your consolidator, which makes onboarding multiple vendors a lot easier.
  
• Ensure production continuity. If one supplier falters, others in your stable may be able to step in to keep your program on track.

“If you have two or three manufacturers for an exact fixture,” explains Vines, “when one stumbles there’s a chance another can pick up the slack. So, you’re giving yourself more flexibility when things beyond your control go wrong.”

Risk 3. You lack FF&E-specific expertise

Retailers can lose control over their fixture orders and inventory, especially during a supply chain crisis. And even if you store FF&E in a distribution center or a third-party warehouse, the workers will lack a crucial component: retail fixture expertise. 

For example, “When you’re working with a general warehouse team, they’re not prepared to break down those pallets of FF&E and accurately reorganize them for store shipments,” Vines notes.

This can lead to inefficiencies, misplaced fixtures, and, ultimately, delayed projects—not the outcomes you want, especially in the midst of supply chain disruption. 

How FF&E consolidation mitigates your risks:

• Partner with experts. Consolidators handle FF&E storage, organization, and store-specific delivery every day, which means you’ll have exceptional support, even in turbulent times.
  
• Streamline coordination. Rather than chase down hundreds of inbound shipments, your team has a single point of contact and can easily modify delivery dates and order contents—a crucial benefit during chaotic periods.
  
• Gain unparalleled visibility. Your consolidator’s advanced FF&E inventory system enables you to track all FF&E, set alerts, forecast needs, and have 24/7 access to real-time data.  

Note that you don’t have to dive into FF&E consolidation all at once. Check out this video to learn more.

Take control of your FF&E process before the next crisis

Retail supply chains will always face challenges—but your FF&E process doesn’t have to crumble under the pressure. By implementing FF&E consolidation, you can build resilience, reduce risks, and help safeguard your store project schedule.

At Store Opening Solutions, we’ve been helping retailers like CVS, Dollar General, and Tractor Supply navigate FF&E challenges for over 25 years. Be sure to reach out today to see how your program can benefit from our solutions.