HAVERTYS FURNITURE. Havertys Furniture. atlanta-based retailer maps a course to competitive dominance.

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1 Reprinted from edge, Ryder s business magazine. a Ryder System, Inc. publication Transportation and supply chain solutions for the bottom line HAVERTYS FURNITURE Havertys Furniture atlanta-based retailer maps a course to competitive dominance.

2 HAVERTYS FURNITURE OUTSHINES COMPETITION WITH NEXT-DAY DELIVERY CAPABILITY AT NEW DISTRIBUTION CENTER.

3 If a customer buys an in-stock item by 1:00 p.m., they can have it delivered the next day, says havertys Furniture s Steve Schingler, Assistant Vice President of Distribution. Currently, none of our competitors can do that. The ability to offer next-day delivery is a huge competitive advantage in the retail furniture market. A restructured distribution network complemented by a strong transportation partner gave Havertys Furniture that edge. Based in Atlanta, Havertys Furniture has been active in the retail furniture business since Since the early 1990s, the company tripled sales, but struggled with high product handling costs and real estate expenses while trying to reach new territories with a distribution system that included five large warehouses and over 40 smaller facilities. In 1999, they took the problem to the Atlanta office of DCB, Inc., a Boston-based consulting company with a specialty in distribution for big-box retailing. Together, the companies mapped a course toward a new warehouse delivery network built around three large distribution centers and four strategically placed home delivery cross-dock operations. Havertys began operations at its new 511,000-squarefoot Eastern Distribution Center (EDC) in Braselton, Georgia, in July By June 2003, 50 of Havertys 113 stores were being served by the EDC, which now reaches 7 of 14 states in the company s footprint. Though only midstream in the transition to its new distribution plan, Havertys already sees the benefits of the new design and plans to open similar operations in Texas and in central Florida over the next two years. At A Glance Challenge Providing customers with next-day delivery of in-stock furniture. Solution The precision of Ryder s Dedicated Contract Carriage (DCC) gives Havertys next-day delivery capability, which translates into an exclusive competitive edge. Benefits Greater customer satisfaction; higher warehouse productivity; enhanced inventory efficiency; lower freight costs; and reliability of DCC enables Havertys management teams to focus on sales and marketing of furniture.

4 In order to meet next-day customer demand, Havertys implemented a pre-loaded demountable dry van system that reduced product handling time. We re still ramping up the operation and haven t been able to take full advantage of our large network yet, but we can see it coming, Schingler explains. In the markets we already have online, we ve been able to develop and maintain a standard of productivity that was very difficult to achieve before. On top of that, we re experiencing significantly less inventory movement by using one large warehouse instead of a number of smaller ones, and we can keep a greater number of products in stock at any given time, which helps us provide better service to our profit centers. The transportation side of the distribution equation required the same level of energy, expertise and confidence. When it came to planning the transportation end of things, Ryder was a natural consideration, says Schingler. We needed absolutely reliable transportation, and we needed a partner with a national presence and resources. Havertys already had firsthand experience with Ryder-run operations. When we were facing the need a few years ago to improve cost efficiency at a warehouse in Jackson, Mississippi, we brought Ryder in to bid on that project, says Schingler. They got the business. Today, Ryder maintains an on-site manager, Alex Sherrer, to closely coordinate transportation at the Braselton operation with the Havertys team. If a delivery is within 50 miles of the Braselton facility, Havertys uses a private fleet of straight trucks, operated by company drivers, to make the delivery. For deliveries outside that 50-mile radius from the Braselton distribution center, Ryder drivers haul pre-loaded demountable units (essentially a 26-foot dry van body equipped with landing legs that fits on a straight chassis and is designed to reduce

5 product handling) and drop them at retail store locations. There, they are picked up by local drivers who make their deliveries the following day. Delivery locations that extend beyond 250 miles are made on a second-day basis utilizing one of the company s cross-dock operations, such as its Virginia Home Delivery Center near Richmond. When the new network is fully operational in Braselton, the EDC will have 35 Ryder Dedicated Contract Carriage drivers and road units up and running. Ryder recently swapped out Havertys local fleet of 101 straight trucks and replaced them with new Freightliner FS-70s, equipped to accommodate the demountable truck body technology. The Ryder advantage earned an additional piece of Havertys business over and above the services covered by the new distribution program contract. Ryder now executes four loop runs daily, hauling furniture between manufacturers located in North Carolina, the Virginia Home Delivery Center, and the EDC in Braselton. According to Rob Thornton, Ryder s director of national accounts, We re able to drive some of the freight costs out of the system for Havertys while improving the reliability of their service. In the meantime, the Ryder team is waiting for the green light to expand operations at the EDC. We re ready, says Thornton. We can ramp up as soon as the system is ready to handle it. Reliable transportation is one of the primary keys to Havertys emergence as a service leader. According to Schingler, With our dedicated contract carriage service from Ryder, we know that when we load a box in the evening, it s going to be at the destination the next morning without our having to track it down. Couple that with the reliability of our new local delivery fleet, and we can schedule next-day customer deliveries with confidence. With our dedicated contract carriage service from Ryder, we know that when we load a box in the evening, it s going to be at the destination the next morning without our having to track it down. Couple that with the reliability of our new local delivery fleet, and we can schedule next-day customer deliveries with confidence. Steve Schingler, Assistant Vice President of Distribution, Havertys Furniture

6 Worldwide Headquarters NW 105th Street, Miami, FL USA Regional Headquarters Asia - Singapore Canada - Toronto Europe - London, U.K. Mexico - Mexico City Ryder provides a complete array of leading-edge logistics, supply chain and transportation management solutions worldwide. Supply Chain Management Supply Chain Consulting Integrated Logistics Operations Lead Logistics Management e-fulfillment Ryder Online Tools Distribution Management Distribution Network Consulting Facility Design Services Product Supply Product Distribution Product Support Transportation Management Transportation Network Consulting Carrier Procurement Shipment Planning and Execution Freight Bill Audit, Payment and Data Services Capacity Management Fleet Management Vehicle Sales Commercial Truck Rental Full Service Leasing Programmed Maintenance Fleet Support Services Dedicated Contract Carriage RyderFleetProducts.com SM UsedTrucks.Ryder.com SM Ryder Customer Response Center Financial Management Lease Financing

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