Survival in any business usually includes waves of success and failures and the history of The FUTON Shop, of San Francisco, is no exception. Peaking with twenty-two corporate and six franchise futon stores in 1995, this Bay area retailer was in an enviable position. As the industry leader in their area they developed into a vertically integrated manufacturing company, with the buying power to purchase containers direct, acting as the importer. As the company grew during the early nineties it became a major import player rivaling the volume of some of the industry’s top national players. But as the local market became saturated in 1995 and the futon furniture industry experienced a softer market, sales slowed for The FUTON Shop.

Suzanne and Art Diamond concluded that some major changes had to take place, and take place fast. “Suzanne was running the day to day operations, and we decided it was time for my role to change,” said company founder, Art Diamond. Years before, sometime in 1991, Suzanne Diamond had created a plan for the company that revolved around tight controls via a computer network that would tie all the futon stores together with inventory and production. She took the reins of the company in the darkest days of 1996 and with the help of a dynamic management team, things have been moving in a very positive direction ever since.

(Picture: Suzanne Diamond... at the controls)
I realized back then that we needed to have a much better handle on each futon store’s day to day operations and then bring that knowledge into sync with the company as a whole,” said Diamond. Long a proponent of computerized information tracking and inventory systems she orchestrated the installation of a computer telecommunications network that linked every futon store to a main server at the company’s headquarters in San Francisco. “It’s taken many years to work out all the bugs but now the system is running like a top.”

When we put this system together,” says Diamond, “we wanted nothing less than a complete overview of the day to day movement of product, orders, sales and inventory across the entire company.” Complete is the key word here. The system, based on a proprietary data base model, allows the main office to acquire a real-time profile of each store’s daily activity as well as determine a global overview for the entire company.

“From minute to minute we know inventory, dollars taken in, and merchandise committed for sale, all of which ties into our replenishment and manufacturing programs,” she said. The entire information gathering is designed to give the management team the ability to meet retail and manufacturing needs and provide the very best customer service possible.

Keep in mind (as you quietly sit and read this) that I am gathering all these facts on a whirlwind tour of the 70,000 square foot facility and Suzanne Diamond is moving; walking and talking me through her vision. Again, the key word is moving.

They have nine loading docks where they both receive containers, ship wholesale futon orders and load and deliver to an average of four of their own shops per day. Every Northern California store gets a truckload per week; the Southern California stores get a container every two weeks. “Some of the busier stores or those with less then a 1000 square feet of storage get a second truck,” Diamond said. Once again the system rules. “Every key department and each futon store is linked, with both real time inventory and a message board for updated information, so everyone can be aware of our position” said Steve Ray, the company’s General Manager. “The beauty of this system is that it allows us to know where product is and how much is available over the entire network. If we need a certain futon frame in a particular store, and that futon frame is in inventory in the warehouse or any other store, we can find it and move it to where it has to be,” Ray said.

“The system allows us to know precisely where we are minute by minute every day. This includes the stores, the warehouse, orders pending and custom futon orders. In addition, at the main office level, we always have a handle on issues like containers on the water; arrival schedules for cotton, wool and fabric shipments as well as production schedules at the mattress and American Oak futon frame factory. We are in control of the information and are, therefore, in control of the company,” Diamond said. “The entire system is focused on getting the customers what they want, when they want it.”

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