Intro/Outro (00:03):
Welcome to Supply Chain. Now the voice of Global Supply Chain Supply chain now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today’s critical issues, the challenges and opportunities. Stay tuned to hear from Those Making Global Business Happen right here on supply chain now.
Scott Luton (00:30):
Hey, good morning, good afternoon, good evening, Scott Luton and Greg White here with you on Supply Chain. Now welcome to today’s episode, Greg. How you doing?
Greg White (00:39):
I’m doing very, very well. So folks we’re gonna talk to, I know from way back, so I’m pretty excited to see what’s going on there.
Scott Luton (00:48):
We are too. Uh, got a great conversation teed up here today, we’re gonna be diving into the furniture industry and talk with a business leader that’s had quite a journey. Andrew Koenig, c e o, with City Furniture. Andrew, how you doing?
Andrew Koenig (01:01):
I’m doing great, Scott. How you doing, bud?
Scott Luton (01:04):
Wonderful, wonderful. I’ll tell you, we have been, uh, Greg, we have been, uh, hitting, uh, Homer’s left and right with some of these interviews. And, uh, Andrew, your reputation, uh, your ears been burning a lot. I’ve heard a lot about you. So I’m looking forward to, to learning your story firsthand. Before we get into furnace industry and even supply chain auto racing, what, what do auto racing Andrew have in common, you think?
Greg White (01:28):
Uh, the Miami Grand Prix, for sure. <laugh> right down there. Yeah.
Scott Luton (01:32):
Well, so Andrew, we’ve done a little homework on the front end. Rumor has it, you are becoming a huge F1 fan. Tell us a little bit about the sport, uh, and how you got hooked on it.
Andrew Koenig (01:43):
I’m, I’m like, uh, many Americans that recently have fell in love with, uh, F1 thanks to the recent Netflix series, uh, race to Survive, I believe that’s the name. Uh, but, um, I just fell in love with it. And when they were coming down here, uh, you know, we, we believe at Citi to be strong partners with the community and the sporting events and the sports teams are, are really some of the best times when our community gets together and has some fun. So, uh, we reached out to them. They’re, they happen to be, uh, existing partners with ours, the Miami Dolphins. So, uh, long story short, we did a huge deal with them, uh, to furnish tons of their villas all across the entire, um, you know, complex, basically. And, uh, and, uh, so yeah, we’re, we’re good partners. I love, I love race. I love the competition. I love the Heatedness. And, you know, the, the precision, the focus, the preparation, the hard work, the technology. There’s just so many cool things. Uh, you really learn behind the scenes in that net, but like, series that, um, just made me love the sport. Yeah.
Scott Luton (02:45):
And the teamwork, uh, especially in the, in the Pit, when they stop for like two seconds, it seems Greg. Mm-hmm. <affirmative>. Are you a big F1 fan too?
Greg White (02:53):
Probably not as big as as Andrew, but yeah, I, so I’m a big Aston Martin fan, and they just got back into the sport a couple years ago, and they’re starting to get their feet under them. Sure. I love watching it.
Scott Luton (03:05):
Well, uh, so, and that, and that the, uh, reality series on Netflix has hooked a lot of folks, as you mentioned. Andrew, one more question about sports, uh, and not F1 racing. I, I’m still trying to get into that, but baseball, um, that 97 Florida Marlin’s team. Oh, yeah, man, Don tr I think Dontrell Willis is on that team. I think Chucky Carr was the guy that could, you know, get from first to, to home in like two seconds. Uh, and they, they won it on, right?
Andrew Koenig (03:34):
Koine, Jeff Koine. He’s like, that’s
Greg White (03:36):
Right. I forgot about that.
Scott Luton (03:37):
He was like, Mr. Marlin. Uh, he’d, he’d been in the organization so long, right?
Andrew Koenig (03:42):
Still is. He is really
Scott Luton (03:44):
Well.
Andrew Koenig (03:44):
Oh, yeah. He, he’s big in the community down here. He’s a good dude.
Scott Luton (03:47):
Okay, wonderful. Well, hey, we’re gonna have to have you back for our sports focused show. Uh, but for now, Greg, we gotta dive into what’s a great story out, um, across supply chain, across across the furniture industry, and a lot more. Uh, so I wanna start Greg and Andrew. Andrew, tell us about City Furniture now. Give us a sense, especially for kind of setting a table a bit, a feel for the organization and its footprint.
Andrew Koenig (04:14):
So, so the way like I, uh, describe Citi is, um, started in 1971. Uh, my father and my uncle, a couple of hippies, um, um, natural entrepreneurs. Uh, they sold yo-yos on the street corner, saved up money as a bellman, uh, to open up our first waterbed store. And it was the seventies and Waterbeds were cool then. So, uh, waterbed City started and, uh, grew a really nice business up until the late eighties when all of a sudden though, uh, waterbeds started getting outlawed and, uh, um, you know, especially on the second floor above apartment buildings. And, uh, early nineties, we transitioned into City Furniture, a full line home furnishings retailer, uh, to the right of us was Rooms to Go, which was a, a new startup, uh, essentially that came down from the Northeast and to the left of us was the number one furniture retailer in the country called Levitt’s Furniture, if you remember them. Oh, yeah.
Greg White (05:08):
Um,
Andrew Koenig (05:08):
And, you know, fa Fast forward, we’re, we’re City Furniture to this day is, is the number one home furnishing, uh, retailer in South Florida. We’ve now expanded into Central Florida, uh, both Orlando and Tampa. So we got about 3000 strong, uh, about 35 stores. Um, and we have four distribution centers throughout Florida, two different headquarters, one here in Tamarack, a little west of Fort Lauderdale, one in Plant City. We’re, we’re all about letting our corporate office folks work from wherever. Of course, we got our stores in our, our warehouses where everybody’s pretty much positioned at there. Um, so we got a lot of people, a lot of stores, a lot of sales team, a lot of operational focus, um, and, um, we, we focus in the starting price point, uh, PR product lineup, um, all different various trends, pretty much all the popular trends. And then we’ll, we’ll go up in price points to what I like to say, like a lower high end.
Andrew Koenig (06:04):
Think of like a B bmw. We’re not gonna sell Aston Martins <laugh> or Ferrari. Uh, but, but we’ll have really beautiful step up product that can compete with the Williams Sonomas, the rhs, but be affordable, but still very stylish. And from a supply chain standpoint, we actually have it all in stock. And, uh, that’s something, you know, my uncle was always strong about just making sure we satisfy that customer as soon as possible. So we’ve been doing same day delivery since 2001 way be way before Amazon made it cool. Um, and, uh, you know, we have customer pickup, and so we’re all about fulfilling that customer as fast as possible, whatever price point, whatever style, whatever trend they wanted, uh, a a as quickly as possible.
Scott Luton (06:45):
Okay. So, Greg, uh, before I, uh, follow up on the question with Andrew, one question for you, Greg. Did you ever have a waterbed? Going back to earliest part of Andrew’s answer?
Greg White (06:55):
Uh, I did by marriage. I, I got a waterbed by marriage. Yes. My fiance now, now wife, uh, had a watered, and it was the old fashioned kind with the Woodside and no baffles in the mattress. Yeah,
Andrew Koenig (07:08):
The wavy one. Yeah.
Greg White (07:10):
Um, well
Scott Luton (07:11):
Speak to, uh, Greg, speak to, uh, we got a lot, we got a good feel of the organization. Yeah. And the Andrew’s response. What comes to your mind?
Greg White (07:18):
Well, I’m afraid I’m gonna give away, um, the next question. Okay. Which is what might surprise our listeners. So I’d love to hear his answer first so I don’t steal anyone’s thunder. Okay.
Scott Luton (07:30):
There’s
Greg White (07:30):
A couple things out there that are really super unique about the furniture industry that I bet a lot of people don’t know,
Scott Luton (07:36):
Andrew, speak to that. Uh, you know, a lot of folks may, a lot of our listeners perhaps may not be real familiar with the furniture industry, especially in insider’s view. What might surprise him,
Andrew Koenig (07:46):
I think, uh, um, how, how adept we are actually in technology, uh, specifically when it comes to augmented reality. Uh, we put a, we put a lot of time and energy into making sure that all of our products online are, uh, 3D viewable. And there’s a lot of retailers like us throughout the country. So, you know, the, the ability to, you know, use technology to see product in their home before they buy. That’s, that’s typically something our, our customers even now don’t, don’t realize that we have that capability, uh, that they can do. So. Um, and we have some even more, uh, pretty sweet technology coming that’s just gonna really blow, blow up and revolutionize the ability for customers to view products, view entire room settings, uh, from the comfort of their home or from their cell phone. So, um, I, I’d say one thing that comes to my mind, I think listeners would not know is that we, we, we got a pretty cool, what we call xr, uh, like an a a customer experience, reality options, that they can, uh, really see some products in their home.
Scott Luton (08:47):
Okay. Uh, Greg, now that we’ve put the question out there, what <laugh>, what else would you add?
Greg White (08:53):
Yeah, well, I think, I think the complexities of the furniture industry and the way that Citi and other modern retailers have really revolutionized it, right? I mean, Scott, you and I talked about going to Hickory and ordering furniture that you didn’t get for three or six or nine months, right? Right. And if you wanted a particular pattern that wasn’t in the store, well, often, even if it was in the store, you would still have to wait weeks or months to get it. So that is a huge, that, and, and doing that so long ago was a huge step for the industry, the ability to deliver it immediately. And, um, when you see a city store, which is essentially a warehouse with a display room, right? Uh, showroom, right? Um, I mean, they’re, you could actually walk out of there with, with a, with a couch or the entire room or whatever they
Scott Luton (09:41):
Suite, right? Yeah. Nice.
Greg White (09:44):
I think that’s a huge, I know that’s old hat for you, Andrew, but I think there are probably are, are a lot of our listeners who don’t know that you ever had to do that. You ever had to wait weeks or months for furniture. And, um, in 2001, that was a huge revolutionary change. The other, uh, thing about furniture that is I think the, these guys have really revolutionized is the notion of treating a retail store like a typical re retail store. Even other, you know, we did, we dealt at Blue Ridge with a lot of, of furniture brands, but a lot of them, they could deliver it in a day or something like that, but it still wasn’t in the store. It wasn’t a part of the forward inventory as we called it. And, um, I think that’s a, a really smart thing to do because even in the relatively small regional area that, that Citi operates in, um, it gives them a huge advantage, just enormous, even over some other local or national chains in their markets.
Scott Luton (10:47):
Andrew gets you to respond there before we move forward with, uh, we’re talking about your journey here in a second.
Andrew Koenig (10:51):
Yeah. It’s, it is, I take it for granted, uh, you know, just, and I think our sales team does too, and yeah. Eventually our, our customers. But yeah, it’s a logistical, logistical, uh, uh, big challenge to get all that product here to, you know, have, you know, nearly 90% in stock to go into, you know, a Memorial Day weekend and, and satisfy that within, you know, a day or even, you know, same day or customer pickup, you name it. So, um, it, uh, you, you’re absolutely right. It’s, it’s, it’s an enormous challenge. I’m real proud of the team, and, and over the last few years, we’ve actually expanded our product, uh, skew count substantially. That’s helped satisfy more demand and get more business, but it, it does make the, uh, create some gray hairs on our supply chain. <laugh>,
Greg White (11:38):
That’s a big investment to have all that inventory forward. I mean,
Andrew Koenig (11:42):
Yeah, we, I mean, I told you we have four distribution centers. I mean, literally south of Orlando, right? You know, that’s, that’s, that’s, that’s unusual. But if, you know, we believe if you, you got the product, take that customer outta the market as quickly as possible, they’re happy, the salesperson’s happier. And, you know, we all know happy customer tells, you know, six, eight, you know, however, however many people nowadays, and, uh, just drives more word of mouth business.
Scott Luton (12:08):
So, Greg, where are we going next, uh, with Andrew Kig?
Greg White (12:12):
I, I know a little bit, only mostly from reading, by the way, congratulations to your dad on the Horatio Alger, uh, award recently. Thanks. Um, but I know you guys had a very specific methodology of having even family members work their way through the organization. Um, and, and, uh, I understand that in 2006 you started in the receiving department. Were you really unloading furniture from containers? I mean, really?
Andrew Koenig (12:38):
Oh, yeah. Oh, yeah. Really
Greg White (12:40):
<laugh>,
Andrew Koenig (12:41):
Yeah. I wouldn’t have, I wouldn’t gotten any respect from the team if, you know, I didn’t, you know, shoulder to shoulder, uh, with, with, um, you know, the receiving team. So definitely started there, worked all the different departments and operations when the time was right, you know, I would, you know, you know, try to take on the next role, team leader, then supervisor. And it was an amazing journey. I’m so glad I started in operations and, you know, I, I love our people so much, uh, in, you know, to, to start in the warehouse was probably the best thing because like, I just respect our receiving team, everybody and operations tremendous, like so much more because, you know, I’ve, I’ve done all that work with them and, and to my, to this day, some of my best relationships at Citi.
Greg White (13:26):
I think if you did Undercover Boss, it wouldn’t be as big a surprise when you got into the operations of it because of that. I mean, it’s kind of the inverse of that.
Andrew Koenig (13:33):
Yeah. I, I don’t wanna be rude to Undercover Boss, but I could never do that because my people know me. They’d know me if I wore a purple wig, red wig a a beard. You, they have my cell phone numbers. I don’t, I don’t, they, they know when I gain like three pounds, they’re like, oh, you gained a little weight. They know when I lose a couple weight. Like, that’s awesome. They’re, we’re, we’re so tight that, you know, it’s that that couldn’t never fly
Greg White (13:57):
<laugh>. So tell us a little bit about that and a little bit about some of the like leadership lessons or business lessons that you learned from that process.
Andrew Koenig (14:05):
Yeah, so, so I think I, I was very lucky to just watch my father just be just a good family business owner and, and treat people, right? So, you know, uh, we’re, we’re, there’s no secret sauce. It’s just have great relationships. You know, we’re, we, we subscribe to a lot of the Dale Carnegie methodology, know people’s name, have relationships, you know, really authentic personal relationships. I, I probably have a, a f a a city event in my house every other week, inviting 20 people over. And I mean, these people become just, you know, we’re just so tight and we’re going to war every day, whether it’s through Covid or or 2008 recession. Who, what? It doesn’t matter. We’re, we’re just, we’re so strongly connected. We know each other. We trust and respect each other. And if you can get all that personal stuff behind, now, let’s go solve some problems.
Andrew Koenig (14:55):
You know, whether it’s making the company safe for better quality, better on-time, delivery, whatever. We’re just, we’re working together. We already know who each other. There’s no egos. There’s no titles. Like, let’s solve some problems. Let’s make this company better. And then, you know, my dad was really good about rewarding and giving back to the team, you know, when we had milestones. And my mom was awesome about making us celebrate those wins and, and having big parties. I mean, you know, we’ve set Fort Lauderdale records for like, best parties for businesses in Fort Lauderdale’s. Some of these invoices might make you fall outta your chair. But, but we, we, we believe in having fun. I think, I think just, we just hit our 50th anniversary this past July, and we had a 2000 person party at the signature Grand. And, um, I mean, to this day, you know, people are still talking about it and saying, this is the greatest company ever. And, and I, I, I’m just so proud of that. Like, you know, I, I don’t need any more. I’m, I’m beyond blessed, so is my dad. My dad still lives in the same house for 30 years. So it, it, you know, it’s just all those little natural characteristics that, you know, we’re, we’re not a business. We’re, we’re a family. We’re a team trying to make it happen every day.
Greg White (16:03):
I love that. Make everyone part of the family in the family business
Andrew Koenig (16:07):
Trying,
Scott Luton (16:08):
I’m gonna tell you the last two minutes and we are recording it. That should be shattered from the mountaintops, uh, your view on, uh, the people that make it happen and how we all stand on the shoulders of those giants, Andrew, Hey man, we, I think we’re second cousins in, in terms of a worldview for that. Cause that’s the important stuff. Uh, since you talked about your father and, and of course you’re, you’re now c e o Kenia, uh, and we’re gonna talk about your lean thinking here in a second. But what’s one thing you touched on how you and your father really view, um, the culture and the family and, uh, and, and a lot of similarities there. What’s one thing you think is a little bit different in terms of how you lead versus how your father did?
Andrew Koenig (16:45):
So, it, it would probably go back to my lean training and development where I think in the, I think in the eighties and nineties and early two thousands, you know, leadership was expected to have all the right answers to every question. Um, I, I empowered the bejesus outta my team, and, you know, I’ve, I’m, I’m more focused on making sure the right people in the room. We, we, we are, we are trying to solve the right problem. Um, I’m supporting them. Whereas I would say, you know, maybe the old school leadership style was a little top down. Yeah. And, and I think he’d be okay with me saying this. Like, I think our batting average is much higher. Okay. Cause methodology of solving problems is more team-based. And, you know, I’ve, you know, I, if I don’t see the right people in the room solving a problem, and I see it’s too, too much leadership, not people doing the work or, you know, where’s hr, where’s tech, you know, you know, I’m, I’m very cognizant on, on making sure we have the right system and teamwork and, you know, and he was just, and I think that was just a general generational thing.
Andrew Koenig (17:47):
Right?
Scott Luton (17:47):
Right. Yeah, I completely get it. And we’re gonna dive more into lean thinking, uh, Greg, get you to comment really quick. O one of the themes that I’m hearing through Andrews answers thus far is empowering the team to, you know, be successful, solve problems. You know, uh, I love that message. Your thoughts, Greg.
Greg White (18:04):
I think that’s an incredible message, but I, I also think we have to acknowledge to Andrew, to your point, is that business complexity evolved over the years. When your dad started the company, there was no tech department, right? <laugh>, I mean, right. There weren’t, there weren’t a lot of departments, there weren’t a lot of metrics and data and all of that information available. You really had to go by your gut. I mean, I think if there’s anything I, I’ve seen from the, the, uh, now ascended management team at Citi, it was that they were much more metric and much more process oriented because you, you couldn’t be when Keith started the company, right? There just was not, not enough infrastructure to do that. And I think it’s a natural evolution of business. Yeah. And I, I think your dad would a hundred percent agree with your assessment, be very proud of how you, you guys together. And now you run the company, because it has been <laugh> it has been a 52 year evolution of the business environment, right? So it’s a dramatically different world now than it
Andrew Koenig (19:06):
Was then.
Scott Luton (19:07):
So, Andrew, you mentioned, uh, lean thinking, uh, from what we have uncovered, you were given the great fortune to study lean thinking, lean philosophy at Toyota headquarters in Japan, no less what a special, uh, experience that must be. And, and since then, as you mentioned, you’ve brought that lean thinking the city furniture in about 2007. Um, two part question. Hey, talk about how cool it was to study lean there in Japan at Toyota, and then talk about how that has impacted organization ever since.
Andrew Koenig (19:38):
So the, the story goes, um, I read a book called The Machine that Changed the World in about 2003. And in my, in my class, you know, the book really highlights that they’re programmed differently. They got a, a different culture. They, they have a, what they called the Toyota Production System. And what I like to say is just the system of working together to solve problems. And, um, so read the book, called Keith my Father, and said, Hey, I know you know Jim Moran, who was JM Lexus, uh, Southeast, uh, Toyota distributor. I said, I need, um, a tour, uh, for and over in Japan, and I need you to hook me up. Call the guy, you know, and long story short, he did, and Jim Morran, uh, got me just one of the most amazing tours my entire life and, uh, behind the scenes education of what I read in the book, got to see it with my own two eyes.
Andrew Koenig (20:28):
And then I just became an absolute like zealot disciple, read everything on Toyota, um, just been a subject matter expert. So that was in 2003 ish, came back and I tried to convince Keith, my father, to go apply lean Thinking to our business. A lot of our business was ran differently at that time. Uh, he didn’t listen for several years, not until, uh, the Great Recession was looming its head. And that’s when, when he really started to see waste. And, and he was so good. I mean, I, every birthday, father’s Day, Christmas, uh, yeah, I don’t, I don’t care what holiday was, I was dropping off lean books on his desk. And he read ’em all. He read ’em all. But, you know, if you run a business for 40 years doing it differently, it’s really hard to change your mindset. Not until that recession really was coming at us hard that, uh, he was like, okay, let’s, let’s, let’s do this lean thing.
Andrew Koenig (21:19):
Let’s do this lean journey. And since then, for the last 16 years, he’s been our, our, been my biggest supporter to transform our culture. And, um, so, you know, fast forward now, I, you know, all the metrics are better. Uh, all the safety quality customer sat, we had a record CSAT levels, you know, record growth of over the last 14 years. Um, just, just all the numbers are insane. And, uh, I’m, I’m, um, I’m more excited that our culture’s just super strong. You know, you could be one day in our culture making ideas, giving ideas and improving your work immediately, and, uh, making our business better. So it’s, it’s awesome.
Scott Luton (21:53):
So Greg, I’ll get you your comment in just a second, but I got quick follow up question. Cause as you talk about, uh, lean thinking and you talk about the ability to see waste, which is at the core, uh, you, and you touched there at the end of your response on culture. So it sounds like your team, if I, if I’m tracking with you, your team has really come to be able to see and identify waste, and then you’ve got that force multiplier effect. Is that right, Andrew? Yeah.
Andrew Koenig (22:17):
I mean, it’s when, when you learn about Toyota and the difference between companies that have applied lean, uh, versus Toyota, you know, most organizations are just missing the people and the culture element. Toyota executes that so well, so that when it, when the time gets tough and we gotta solve some problems together, you know, all that people stuff solved. So we can just get to solving problems. And, you know, 16 years ago when we started on our journey, lot of egos, lot of, lot of, Hey, this is my, you know, call not anyone else’s call. And, uh, uh, we had to flip that culture completely on its head. And to this day, Keith, Keith and I and our Amman senior team, you know, we’re really focused, what we say is we’re focused on building systems, not working in the systems with our people. How to create the, the systems and the culture and the process improvement so that we can take our team to the next, uh, level. Versus we don’t need to be the superheroes coming up with all these genius ideas. And if you can get 3000 people every single day solving problems, it’s gonna be hard to catch up to you.
Scott Luton (23:16):
Greg, I know you’re topping it a bit. Uh, your thoughts, Greg?
Greg White (23:19):
Yeah, very simple. Two things. One is he saw the recession coming and acted then not after it had impacted or, you know, potentially damaged the company. I think that that is a lesson that every, every single manager of any company should embrace because it takes guts to do that. Because think about how long we’ve been predicting recessions here and there, there and everywhere. What if you’re wrong? Mm-hmm. <affirmative>. And you’ve done all that. I think in that particular case, you’re safe, right? Cuz all you did was make your company more efficient. But still, that’s a risky transition. And especially as Andrew said, you said, having run the company for 40 years at that time in a very, very particular way. And I think the other is this notion of all of putting all of these brains together, right? I mean, when we talk about technologies like ai, it’s not bigger brains or faster brains that makes AI better. It’s more brains, the new generation of, of artificial intelligence, these generative, um, adversarial networks. That’s, that is two or more AI brains arguing with one another until they determine what’s right and what’s the appropriate solution. So that’s exactly what, you know what this is. You use more of those minds to solve those problems. They’ll be more effective and more rapid solutions.
Scott Luton (24:41):
You know, as you shared that, uh, Greg, we’ve talked about this moving forward. Andrew, I’m not sure if you’ve seen this movie her, I think it came out in 2013, it’s got Joaquin Phoenix. And I’m not gonna give away the ending, but as you were just talking about all the more brains and, and, uh, and disagreeing ra you know, and then agreeing on something and you’re moving ton faster, folks, if you’re all about, uh, this digital age and the AI air we’re living in, go check out that movie cuz it’ll blow your mind. Andrew, have you ever seen her with Joaquin Phoenix?
Andrew Koenig (25:09):
I have not, but I, I look forward to it. Very good.
Greg White (25:12):
Oh, basically falls in love with Siri <laugh>.
Scott Luton (25:15):
That’s right. Yeah. Along
Greg White (25:16):
Before, and by the way, not ai, just to be clear, but good point. Um, but kind of this, um, advanced principle on that. Yeah.
Scott Luton (25:25):
Yes, yes. To your other point, Greg, as ahead of its time, you know, 2013, this is long before we were thinking about some of these things. It was 20, yeah. 2013. Can you believe that?
Andrew Koenig (25:34):
What One thought. One thought. Yes. So if you think about, like, something hit me many, many years ago, which is like, you know, it’s, it’s our team versus the competition. You know, we’re, we’re, and by the way, we love our industry. We love, we respect all of our competitors, and they’re, you know, we’re, we’re very blessed. It’s a great industry, but we win.
Scott Luton (25:52):
Wanna beat win.
Andrew Koenig (25:53):
Yeah. We all wanna win. We all wanna win. But something hit me, you know, years ago and, and I, I give credit Toyota open up my eyes. It’s just like, it’s our people versus theirs. I remember asking this, you know, learning this really, uh, sophisticated problem solving methodology. And, um, uh, the person had Toyota, I was like, so all right, I learned this, you know, this is cool. Um, and, but they were like, great, now you have to get your whole company to learn it. Mm-hmm. <affirmative>. And I was like, my whole company, no way. No way. Only a few of us can know this. And fast forward, like, you know, we’re on that way. Like we’re, you know, it’s, it, we’re on a journey to create an army of problem solvers. Whether you’re a day in receiving department, you can be, you can learn this methodology actually. Uh, or you’ve been a senior vice president or a C-suite member. You know, we’re teaching the same problem solving skills to everybody in our company. And, and we’re, I love what I’m seeing with our company because we’re just, we’re getting a little closer to everybody’s a problem solver, and that that’s gonna be hard to beat.
Scott Luton (26:50):
Hmm. An army of problem solvers. I love it. It’s like a ti of wave. Uh, all right. So let’s talk about, uh, some of your priorities. Uh, my hunch is that you always see opportunity. Let’s just kind of how you’re striking me, Andrew, and I bet more and more to teams is, is geared the same way. So talk to us, if you would, about city furniture’s priorities when it comes to supply chain performance now and, and some of the, some of the areas maybe you wanna improve in.
Andrew Koenig (27:15):
So, so it kind of starts with our vision. And, you know, we have some very lofty, you know, vision targets. I mean, you could probably imagine, you know, being, you know, number one in home furnishings, retail, you know, uh, high, uh, the highest level of NPSs scores in all of home furnishings, eventually retail, you know, green, you know, positive or, uh, uh, co carbon neutral, you name it. So, so I guess, you know, trickle that down into the supply chain world. They have all the KPIs that you guys are familiar with. We always category our KPIs into safety, quality, customer performance, and teamwork. Performance is financial teamwork. Think of as like culture. So, but it always starts with safety. So we’re, we’re pushing our supply chain team. They’ve worked their butts off to make sure that all of our products that we develop all across the world are always up to compliance and really ahead of compliance. So that’s just one example. Quality. We’re always trying to drive down our defects, you know, whether they get here or whether it’s warranty issues in the customer’s home, even though it’s wear and tear. And you’re, if you’re like me, I sit in the corner of my sectional for three years and, you know, hey, we still gotta fix that issue, even though I, you know, the, you know, me or the customer doesn’t move too much from the same spot.
Scott Luton (28:25):
<laugh>, Andrew, hey, really quick, my dear wife, Amanda calls that the cozy corner, and she’s laid claim to that since the time we had our furniture delivered. So, uh, but you’re, as you were saying,
Andrew Koenig (28:35):
You know, we, we, from a financial performance side, we always want the, you know, the lowest amount of inventory, right? To get the highest amount of return on investment, highest sales dollar amounts on time delivery. We measure all that first time completion percentages. And then culturally, we wanna make sure our supply chain team is really well crosstrained, you know, they need to be learning, uh, you know, uh, Greg generative ai and h how it could apply to their jobs and, and, and where they can, uh, uh, apply, uh, apply it to make themselves more efficient, productive, more accurate. Mm-hmm. <affirmative>. So, uh, you know, there’s a lot of cross-training there, or just monitoring their morale. So it, it’s not rocket science. We put goals up on the wall and we work together to achieve them.
Scott Luton (29:16):
Hmm. Greg,
Greg White (29:17):
I don’t know. I mean, I, I all, I, what I recall in, in the, the little work that I did, you know, my job was basically to be the pony and the dog and pony show when, when we started working with Citi. But I heard a lot of, of, a lot of this sort of thing, and I don’t know, I don’t remember Andrew, I don’t remember what year it was. It was probably six or seven years ago that you guys actually, um, bought from us. But I remember hearing a lot about it, and I, I just think that this is such a consistent story of preemption, right? Of vision. And I don’t mean just far out vision of, of the ability to see what is coming practically in, in the business and then doing something about it when you see it, not when it impacts you. And I just, to me, that’s, that jumps out at me right here. Sorry, I know that’s off topic for the answer to the question, but that’s, this, this kind of is culminating this feeling around the culture and the operations of this organization. You,
Andrew Koenig (30:16):
You’d be proud, um, that team, uh, you know, I’ve, you know, you’re not supposed, you’re supposed to love everybody, right? Uh, but since this is a supply chain show, I’ll say supply chain has been like the, the biggest outperformer since the pandemic. Um, you know, we hit record levels sales because of just their proactive forecast. So you, you love this. So March 15th, when the world was shutting down, we forecasted sales to drop 85% the following month, 15 days later. And, um, in that first week, we saw when our stores got forced to be shut down, we saw in the data our supply chain leaders did. Um, and analytics teams saw in the data that, wait a minute, sales aren’t dropping, sales are slowing. Yes, for sure, but they’re not as significant. That led to the assumption that wait a minute, people are gonna be home, they’re gonna buy more.
Andrew Koenig (31:07):
And we were one of the only furniture retailers that I’m aware of in the, in the country, uh, that didn’t turn off their supply chain, meaning. So if you think your stores are shutting down, why, why keep buying inventory? Um, so we, we didn’t turn it off. Remember our suppliers in those early days of late March, early April, they were like, Hey, you’re, you’re still ordering, uh, everybody else turned off their orders. Is this an accident? We go, now, keep it flowing. And, uh, um, because our inventory levels were 95% probably, you know, may, June, when people were at home and they were all like, what are we doing? And, uh, I, I gotta fix the patio. My wife gave me three or four projects, <laugh>, um, you know, we, our sales just actually grew 20% that year, and, uh, the following year was almost 50. And, uh, and I, I give it all because of supply chain, proactive planning, visual management systems, you know, but they had, they had their guts too. So got a lot of great forecasting and I, and because of that, they’ve been the all stars since the pandemic. I don’t know if we can officially call the pandemic over. I think so, but, uh, but they, they’ve crushed it. They, you’d be proud.
Greg White (32:13):
That’s awesome. Uh, and that is a very rare story. So that’s two preemptive strikes by this organization. And it, and it goes back to what Scott, you and you Andrew, have been talking about, and that is this whole empowerment of the entire organization. They knew they weren’t gonna get their head chopped off if, right, if they’re wrong, if their opinion was equivalent to anyone’s, if that’s what they saw in the numbers. So there are a lot of lessons here, folks. Listen very carefully
Scott Luton (32:43):
And take lots of notes. I’m on page 16, rewind, rewind,
Greg White (32:45):
Rewind.
Scott Luton (32:46):
Right? All right. So I gotta shift gears for the sake of time. Uh, Andrew, really have enjoyed your story and really, you know, your passion as you tell this story and tell your company, you know, what y’all are doing. I mean, it, it, I don’t know about you, Greg, but it’s, it’s like blowing out my monitor. Just, it, it, it’s like you wear these truths on your, on your sleeve, and I bet you’re a great c e o to work for, is my hunch. Um, let’s talk about corporate responsibility. Uh, I understand that you and your team there at City Furniture really prides itself on corporate responsibility. I want to talk about, uh, this 5% giving pledge, and what is that? And tell, talk to us about the, so what there,
Andrew Koenig (33:26):
So the, the 5% Giving pledge starts back where my, my father and my uncle were very, uh, religious guys, very always about giving back, writing anonymous checks to, um, you know, the local church or someone that needed some help, you name it. Um, but I remember five years ago looking at our financials, just adding everything up, being like, Hey dad, like, I love you, man, but like, the people need to know this. Like, I’m not saying like, let’s market it, but like, they need to know that you are a good leader giving back to the community. You know, in this day and age, we all vote with our, our dollars and we wanna, we want to give it to companies that we know are giving, you know, doing good in the community. So that’s when we started, um, we created 5%. So it’s a minimum of 5% of our privates go back into the community.
Andrew Koenig (34:12):
We’re well, well above that, and it’s in five areas of education, uh, service that would be like an example of, uh, men and women that serve our country, or, uh, fire departments, you name it, diversity. We have strong partners like Urban League, uh, one Pulse Foundation, Prospera organization, you know, so we’ve been ahead of the curve, in my opinion, on, on really trying to invest in, you know, and, and su support, you know, our diverse community, uh, health, uh, my mom died of breast cancer. So in American Cancer Society, um, is our number one partner. Second one is American Heart Association. My uncle who started the business with my dad, uh, he died of a heart disease early on. He was only 52. Wow. So, so those are two major partners on the health side and then, uh, home. Uh, so naturally we’re pretty good at supporting Habitat for Humanity, uh, and donating. So we, we support a lot of their restores that provide a lot of good in, in the community. So, anyways, it’s a public pledge, so, you know, when you shop with us, you can feel good that like, Hey, we’re gonna, we’re gonna give back as best we possibly can to the community.
Scott Luton (35:15):
Greg, I don’t know. I I I bet that resonates with you. It re really resonates with me. Your thoughts.
Greg White (35:19):
Yeah, I love that. I mean, I, I think 5% is a big number. It’s a, it’s a huge number relative to other companies. So it’s, it’s generous, um, and accountable. And I, I think that’s, you know, that engagement in the community is really, really important.
Andrew Koenig (35:36):
Yep. Set. Greg, I appreciate you knowing that that’s a big number cuz not too many people do. So I actually appreciate that. Call out <laugh>.
Scott Luton (35:44):
Well, hey, uh, we skipped over something I wanna ask about, uh, before we kind of come down, uh, and get some of your career advice to some of our listeners, I wanna make it in C-Suite. Before we get there, I wanna talk about sustainability, right? Uh, this green promise that City Furniture’s made. Uh, tell us about that, how you honor it and, uh, maybe we’ll talk about what’s next on your sustainability journey.
Andrew Koenig (36:06):
Yeah. Our 2040 Green Promise is, is just that we’re trying to be carbon neutral by 2040. Um, so we, we, we focus in our recycling efforts, our facilities that we design in our, in our fleet. Um, so, uh, we actually won the greenest fleet of 2021 of all fleets in the countries. It’s all compressed natural gas and electric. Um, so our, our head of fleet’s been on that journey since 2013 when he, he’s that grumpy old mechanic that you all know. And, uh, he, he, I remember saying, ah, I don’t know if we can do this green thing. He looked at me like, boy, you better watch yourself. And all of a sudden he’s probably one of the most revered, uh, fleet mechanics that have gone, you know, completely green. So. Wow. Um, so he, he won the greenest fleet in 2021 is pretty pre, pretty impressive.
Andrew Koenig (36:52):
We have five Tesla of semi semis on order. Uh, we have over 250, uh, compressed natural tr uh, gas trucks, so awesome fleet jobs. So all of our buildings are built le leadership, environmental energy and design lead certified, uh, since 2007, I think we have the most, uh, real estate in the home furnishings industry that is lead certified by a lot, hundreds of thousand square feet. Uh, I’m really proud of this. I just found this out the other day. About 25% of our power is powered through solar panel, uh, fp and l solar together program. So, wow. Uh, and in just two years we’ll have a third of our energy be powered by the sun. So I, I, I think we’re actually well on our way of beating our, the target of 2040 to be able to say, Hey, we’re carbon neutral. Um, so we’re, we’re real excited.
Andrew Koenig (37:39):
Um, my whole team’s all all in on this, just, just like the giving the green stuff is almost just as motivating for our team. Uh, so you, you buy certain products from us, we plant a tree. I mean we, we do it all. And, um, and, and honestly it’s, it’s the right thing to do, but it also helps us save a lot of money for our business and it attracts new customers and it helps retain our associates cuz they just know we’re a green organization. So mm-hmm. <affirmative> and I can talk for hours about what we’re doing there.
Scott Luton (38:05):
So important. I
Greg White (38:06):
Want you say that first part loud for the people in the back is that, go ahead. Sustainability can actually save money for your business. Mm-hmm. I think that there is an enormous perception out there that’s very, very costly Yep. To be green and sustainable. So,
Andrew Koenig (38:22):
So Greg, this, this is for real. We’re probably, and I I I say this publicly, not to brag, but to hopefully get more people doing what we’re doing, press natural gas, I think our gallon, they call it gallon gas per qui, uh, e equivalent of like diesel. Ours is of what, like $5 a gallon or $4 a gallon. We’re about a dollar $35 50. So, uh, we, our payback when we went all in on green in 20 14, 20 15 might have been a year and a half now, we were changing out the fleet at the same time, but I, we get a one, we get one year’s or one month’s bill, uh, from the government in a check saying thank you for being, uh, you know, uh, compressed natural gas. It’s a domestic energy. It’s 67% less emissions. So you’re absolutely right. This can save you a whole bunch of money. And there’s companies like Citi that actually will show you in your mechanic what to do. We’ll, we’ll tell you where our partners, this is the truck, this is how we fuel it. This is, this is what happens if the engine goes, you know, so they’re, you know, we actually put on a green summit last year, uh, publicly just to communicate even to our competitors in our market, be like, this is what you do to save money as well as be way more green.
Scott Luton (39:37):
And that’s, uh, as you started to say on the, on the first part of your response there, it’s not only important industry, it’s important. It’s not only important to your customers, but it’s important to your team members. Got the trifecta working there. Um, alright. Right. So let’s, uh, as we’re coming around the home stretch, wanna pick your brain, you know, we get, uh, Greg, we get asked this question all the time, whether it’s on, um, social, whether it’s on live streams, you name it. What is one piece of advice, Andrew, for our listeners that wanna make it and break out into the C-suite one day, what’s one piece of advice you’d give our listeners?
Andrew Koenig (40:13):
I’m gonna cheat. Give me, let me say two, but I’ll be quick. Um, so, so I think early on, I, I learned how to solve problems. There’s, there’s a lot of different methodologies out there that you can apply to solve a problem. A lot of people do, you know, and sometimes in school they don’t teach you how to solve a problem. So that creates friction, it creates challenges with your people or your boss or your peers. So learn how to solve problems. There’s a lot of different methodologies. Google it, you’ll figure it out. Number two, be a, be a subject matter expert in your industry, your craft, whatever it is. You know, I, I was a, I tried to be a subject matter expert in operations, learn problem solving, and then as I grew within the organization, I could apply that problem solving to sales, to hr, to anything. Uh, but, but I think if they want to be in the C-suite, you gotta really focus, you know, in, in a particular area. You’re gonna be great at business, you’re gonna be great at supply chain, you know, it’s, or furniture industry. You wanna be an expert on that industry, whatever it is. I think you gotta kind of narrow your focus and, uh, um, but be a, be a broad problem solver so that you can do anything your entire life.
Scott Luton (41:19):
Love that, uh, be a problem solver, be a subject matter expert. And, uh, that, that helps drive big returns on focus r o f new metric, coming to a financial, uh, dashboard near you, Greg respond to, uh, his advice there on how to, how to achieve and succeed and, and work your way up the ladder.
Greg White (41:36):
Yeah, I think, uh, there, the underlying message I heard, maybe it was, maybe it was overarching and I’m just slow, <laugh> is specialized, right? Decide where, don’t just say C-Suite. Yeah, I want be a C F O because that’s a distinctly different discipline than chief supply chain officer or c e o If you are a problem solver and you pick a niche, right? Let’s just say it’s supply chain, since I guess we have to right <laugh> Andrew, um, let’s just say it’s supply chain. Get really good at know, at knowing your craft, as he said, be it, be a subject matter expert and be a problem solver. That problem then solves itself of ascending to the, you know, the C-suite level. If that’s what you wanna do. You have to also have leadership skills and be as, uh, open and transparent and inclusive as Andrew is. But, but ultimately it is, it is that specialization and that commitment to solving problems, whatever they are, that gets you there.
Scott Luton (42:39):
Well said. I know what you want. Uh, I love your, your, your, one of your comments there about being real specific, Greg, it’s, it’s so important. I think we’d latch on to these, uh, cliches, these broad general cliches and, and we don’t make as much progress as, as we want. Uh, so know what you want. Get specific. Let’s, uh, do this, Andrew, really, I wish we had a couple more hours with you. Um, and you know, I don’t think you need to sign, I think, I think if, uh, city Furniture would just hook there, um, power grid up to you, Andrew. I think they’d have all the energy and then some they would need for the rest of the year. Let’s, how can folks connect with you and the high performing city furniture team?
Andrew Koenig (43:16):
Yeah, well, I’m on LinkedIn. I’m very active on LinkedIn, so just, you know, type in my name Andrew Kig and you’ll see me on there. Um, I’m on, I’m, because, you know, hey, marketing’s really important and social media’s really important. I’m on TikTok, I’m on Instagram. The real, the real AK City 55 is my, uh, contact. But I’m on all those channels, uh, not only to keep an eye on the, the marketing world, but, uh, uh, you know, where our consumers are. But uh, also there to engage and interact and have relationships with the community. Other, you know, future young generation leadership. I was fortunate to have a lot of people I’ve, you know, uh, that taught me a lot when I was younger. So, uh, reach out. I’ll be out there.
Scott Luton (43:54):
Love that. Uh, Andrew Kig, c e o with City Furniture. Really appreciate your time here today, Greg. Mm-hmm. Before we wrap here today, um, gosh, there are so many moments of brilliance. I’ll just, I’m just gonna be transparent about it, that Andrew shared here. Uh, what’s one of your favorite things, Greg, that we heard here today?
Greg White (44:16):
I think it’s the notion of, of, um, taking lean and recognizing that it’s about people, not about the process. That it’s about the people and their, and empowering them to be able to fulfill this process. And recognizing that it’s, it takes the totality of your people to be able to do that. I, I think more leaders need to recognize that. That’s right. And like Andrew, you know, Scott, I’m prone to, when you ask me for one thing to give you two, I just cannot wait to go to Andrew’s TikTok and see him do Ren. I’m just, oh Lord, <laugh>.
Scott Luton (44:55):
Well, hey, I wanna, I wanna double down on that first point, uh, Greg. Yeah, that’s a great one because, uh, Andrew, what you’re seeing here and what you’ve heard here today, and I bet if we walk through and talk with City Furniture’s employees and, and team members, um, it’s not the cliche version of Lean, you know, that, that when folks get it wrong and they use it as an excuse to slash this and slash that. Mm-hmm. <affirmative>, it’s about what it creates value and creates opportunity and, and it’s a mindset. And man, Andrew put it on full display here today, what re lean thinking really is, and not that misperception is out in the marketplace. So thank you Andrew Kig, uh, C e o with City Furniture. Thanks for being here today.
Andrew Koenig (45:38):
Thanks Scott. Appreciate it very much. Thanks Greg.
Greg White (45:40):
Yeah, thanks. Continue again.
Scott Luton (45:42):
And Greg White man, this has gotta be one of my recent favorite interviews. Your last thought before I sign off here today,
Greg White (45:48):
I actually took notes. Scott, you know, you always get 13 to 17 pages, but I actually took notes and that is something of notes so <laugh> that should tell people how important this message is.
Scott Luton (45:59):
Agreed. All right, folks, hope you enjoy this conversation as much as me and Greg have. Hey, be sure to find Supply Chain now, wherever you get your podcast and subscribe, say, don’t miss conversations just like this one. Find us on YouTube where it’s really easy to watch and listen to our shows. But whatever you do, the most important thing we’re gonna share here today on behalf, our entire team here at Supply Chain now, Scott Luton wishing you nothing but the best. Hey, deeds, not words do good, give forward, be the change that’s needed. And with that said, we’ll see you next time, right back here on Supply Chain now. Thanks. Bye.
Intro/Outro (46:30):
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