ERP for Furniture Industry: Streamline Operations and Overcome Challenges

Did you know the furniture industry’s global market size in 2022 was evaluated at $630.55 billion and is expected to reach $1,051.77 billion by 2032? This evaluation clearly states how competitive this industry is. Furniture manufacturing companies always strive to keep up with changing customer demands and emerging trends and technologies to stay ahead of the competition.

We all love personalization in every aspect of our lives, and furniture is no exception. Hence, companies today focus more on manufacturing customized furniture with sustainable materials. This has eventually increased the complexity of the manufacturing process, as keeping track of dynamic customer preferences becomes challenging.

Most furniture manufacturing companies opt for Enterprise Resource Planning (ERP) software to reduce this complexity. ERP software for the furniture industry assists businesses in streamlining their operations and gaining complete visibility into inventory and customer requisites.

In this article, we aim to highlight how ERP software addresses the major challenges of the furniture industry.

What is an ERP for Furniture Manufacturing? 

An ERP for the furniture industry is a software solution particularly designed to meet the needs of furniture manufacturing companies. It consolidates various facets of a company and related data under one roof, ensuring a single source of truth and 360-degree visibility into business operations. Plus, it helps them automate several business processes, improve accuracy, and streamline the entire workflow.

Whether it is order management, inventory management, supply chain management, production planning, or customer relationship management, a furniture manufacturing ERP manages it all from a single frame.

With multiple ERP software available, Odoo stands out from others as it caters to every industry’s needs. It is a suite of business tools required to manage different aspects of a company, including sales, manufacturing, accounting, billing, and e-commerce. Being open-source, Odoo is highly customizable, allowing furniture manufacturing companies to adjust its features according to their needs.

Challenges Faced by the Furniture Industry 

Every industry is filled with uphill battles, and the furniture industry is no exception. Let us highlight some of its major pain points here.

1. Dynamic Customer Preferences 

One of the major challenges for any manufacturing industry is shifting customer needs. In the world of personalization, it is obvious to expect frequent changes in consumer requirements. However, keeping track of these changes, implementing them, and ensuring timely delivery seems intimidating.

Meeting shifting customer demands is directly proportional to a high level of satisfaction and high chances of customer retention.

2. Raw Material Lead Times

In general, lead time refers to the latency between the initiation and completion of a process. In manufacturing, lead time refers to the time between the creation and delivery of a product. Reduced lead times result in improved productivity, streamlined operations, and increased output.

Raw material lead time is the time between placing an order for raw materials and receiving them. Longer raw material lead times pose a significant challenge, as they result in delayed production, increased holding costs, disrupted supply chains, and poor customer satisfaction.

3. Balancing Inventory Management  

Inventory management is yet another typical challenge for every manufacturing industry. As the furniture industry is highly seasonal, managing inventory to meet ongoing customer demands while avoiding an overstock off-season is challenging.

Further, companies have to maintain diverse furniture items. They need to focus on managing inventory efficiently to avoid a shortage of the most popular items and an overstock of less popular items.

4. Resource Wastage 

Furniture companies generally procure raw materials from different vendors across the world. What is important here is the procurement of the exact quantity of high-quality raw materials. Without proper management and traceability, it is challenging for companies to track the stock of raw materials. This leads to the purchase of excess inventory, resulting in the loss of money.

How Does ERP for the Furniture Industry Help Overcome These Challenges? 

ERP is a comprehensive, integrated software solution offering real-time visibility into organization-wide data. It combines dedicated management modules, allowing furniture companies to streamline operations across different departments.

Let us now discuss the role of ERP in the furniture industry.

1. Customer Relationship Management 

Often abbreviated as CRM, customer relationship management is a type of software that helps businesses manage customer interactions and nurture relationships. It centralizes customer data from different communication channels. Customer data may include customer information, order details, purchase history, preferences, etc.

Companies further leverage this data to better understand their customers and cater to each customer’s unique needs. This, indeed, results in improved customer satisfaction and loyalty.

Odoo CRM is a customer-centric tool that meets the needs of every sales team. From tracking leads to closing opportunities and offering ongoing & after-sales support, it manages everything like a breeze. It makes communication effortless, as you can manage conversations with your teams and customers from a single place.

Furthermore, gaining and nurturing leads seem straightforward with Odoo CRM. A unified dashboard with an advanced reporting engine provides real-time insights into your sales metrics. This helps you make smart decisions beneficial for your furniture business.

2. Product Lifecycle Management 

Product lifecycle management (PLM) is a strategic method of managing a product’s entire life cycle, from concept initiation to development, delivery, and disposal. It involves optimizing a product’s different aspects to ensure maximum efficiency.

In the furniture industry, different stages of PLM include ideation, design and development, material sourcing and management, manufacturing and production, sales, supply chain management, and after-sales support.
An effective ERP for the furniture industry can streamline all PLM stages. With this, companies can ensure high product quality, reduced time-to-market, and maximum customer satisfaction.

Odoo PLM is a collaborative version control app that lets you manage the entire process of designing, manufacturing, and selling furniture items. You can efficiently track product variants, bills of materials, and any other revisions made to products. This app unleashes the potential of an enterprise social network to facilitate organization-wide communication and ensure effective change management.

3. Inventory Management 

Manufacturing furniture products requires different kinds of components and raw materials. The stockout of any component or raw material hinders the manufacturing process, resulting in delayed production. Hence, keeping track of components, raw materials, and finished products in real-time is essential.

However, ERP with an inventory management feature allows you to efficiently manage your inventory in real-time. It saves you from stockout and excess stock circumstances by providing alerts and reports in advance.

Odoo Inventory is a modern inventory system that provides real-time visibility into your warehouses, reduces stockouts, and accelerates your operations. It implements smart replenishment strategies, like min-max rules, MTO, or the master production schedule so that you never run into an out-of-stock situation.

Moreover, you can manage specific storage locations for raw materials, components, and finished products. Utilize putaway rules to automatically route products to their ideal storage locations based on the storage capacity and picking needs.

4. Multiple Warehouse Management

It is obvious for a furniture manufacturer to have multiple warehouses. An efficient ERP centralizes data from all warehouses, making it easy for you to manage overall warehouse inventory.

With Odoo’s inventory management, you can manage storage, stock, and replenishments for all your warehouses. You can control incoming and outgoing shipments with customizable routes and push and pull rules. Push and pull rules let you set custom routes to automatically plan inventory transfer to and from different warehouses and locations. With a blazing inventory lookup, you can know the exact location of your products across different warehouses.

5. Supply Chain Management 

An ideal ERP software for the furniture industry takes care of the entire supply chain management, including procurement, vendor management, production, inventory management, and logistics coordination. This ensures that products are delivered to customers on time.

Odoo offers different modules, such as Inventory, PLM, CRM, Accounting, etc., to streamline all supply chain management operations.

6. Purchase Management 

Purchase management involves managing the purchase of goods and services you require from different suppliers and vendors. An ERP solution automates purchase requests, approvals, and order fulfillment with minimal human intervention. This helps maintain accurate vendor relationships and reduce procurement cycle times.

Odoo’s procurement software manages everything, from RFQs to receipts and production variants to vendor management. Automated reordering rules allow you to streamline RFQs (requests for a quote) and purchase orders. In addition, you can optimize procurement with customizable purchase agreements for every situation.

7. Financial Management 

A furniture manufacturing ERP comes with modules to manage and oversee a company’s financial health. These modules let you track expenses, analyze profitability, manage budgets, and monitor the overall financial performance. You can create detailed financial reports providing insights into expenses and profits.

Odoo’s Finance module comes with multiple apps, such as Accounting, Invoice, and Expenses, that help you manage your company’s finances.

• The Accounting app is extremely fast and fully automated. It performs operations in a blink of an eye. With An AI-powered invoice data capture, you experience zero data-entry, reducing manual errors. More interestingly, you can manage invoices and expenses right from your smartphone.
• Invoicing provides all the elements, such as customer details, tax rates, products, etc., required to create an invoice. Plus, it lets you track your invoices with clear status and due dates.
• Odoo Expenses keeps all your expenses organized. Either submit receipts from a mobile app or email an expense; keep submitting them as soon as you receive them.

8. Quality Control and Compliance

In any manufacturing industry, complying with industry regulations and safety standards is mandatory. ERP for furniture manufacturing is usually equipped with a quality control module. It helps you set quality standards and conduct inspections to ensure that all products meet the defined criteria. Besides, it offers insights into non-conformities and potential risks.

Odoo Quality is the best app to ensure product quality throughout its life cycle. Maintain product quality and consistency with recurring quality checks on manufacturing and inventory orders. More interestingly, you can create quality alerts to address product defects, define the root cause, and suggest corrective/preventive measures.

Conclusion 

ERP for the furniture industry serves as a comprehensive solution for efficient customer relationship management, inventory management, financial management, quality control, and supply chain management. It streamlines the entire production process, from conceptualization to development, delivery, and after-sales service.

With furniture manufacturing ERP, companies can ensure real-time visibility into data, improved productivity, reduced manual errors, scalability, and better decision-making. This, indeed, leads to sustainable business growth and increased revenue.

Looking for an Odoo implementation services provider for implementing a furniture manufacturing ERP for your business? Your search ends here at Ksolves, a trusted Odoo Gold Partner! At Ksolves, we have highly experienced Odoo specialists who work relentlessly to understand your requirements and deliver a personalized ERP solution. In addition, with our Odoo consulting service, we connect you with experienced Odoo consultants for a high-end digital solution.