Boosting Demand Visibility
Wells Lamont Corp. faces several key challenges in demand planning and forecasting: a high percentage of new items in its product line every year, significant promotional activity, substantial SKU changes in customer programs each season, and a heavy reliance on business intelligence from sales, marketing and customer data for its forecasting.
The company is a leading manufacturer and distributor of gloves and hand protection products. Its Retail division makes work gloves, garden gloves, hunting gloves and winter casual gloves that are sold through home improvement centers, hardware chains, supermarkets, discount stores and specialty retailers. The company's Industrial division provides work gloves and other products to distributors in the industrial and safety, clean room and medical supply, and meat and poultry processing industries.
Time to Take Action
Wells Lamont had been executing demand planning and sales forecasting through its existing enterprise resource planning (ERP) system. But using this method, the company's demand planning department was spending 70 percent of its time compiling data and identifying areas in each business division that needed adjustment actions -- and only 30 percent of the time taking action, says Steve Bartok, Wells Lamont's demand planning manager.
The company had to upgrade its demand planning software to bring about needed process improvements. Wells Lamont wanted a management product that would give the company greater visibility into customer demand and enable it to quickly take appropriate actions when demand changed, Bartok says. "Different product lines have different seasonality periods or different time horizons that reflect current demand patterns," he says.
The company also wanted software that would easily integrate business intelligence data supplied by its sales and marketing departments and its customers, and capture demand forecast information with sufficient lead time for Wells Lamont's production operations.
Wells Lamont sent six software vendors a document describing its existing process flow, business challenges for each of its divisions, and detailed feature and functionality requirements. The company ultimately selected John Galt Solutions Inc.'s (JGS) Demand Management Engine and Inventory Management, key modules in the vendor's Atlas Planning Suite.
Wells Lamont deployed the JGS software in its Retail division in June 2004 and in its Industrial division in the fall of that same year. Both implementations took 90 days, and Wells Lamont integrated the software with its J.D. Edwards ERP suite.
Time Well Spent
The new software enabled the company "to give decision makers the desired data views, aggregation, and desired target metrics needed to make decisions for individual products and customers," Bartok says. "In the past, this was more of a manual process, and now we have the opportunity to compare different sets of customer or product data against different target metric scenarios."
Bartok says the software's exception management capability was one of the key reasons Wells Lamont selected the John Galt applications. That capability is particularly important because forecasting in the glove business is often seasonal, with demand fluctuating from month to month and even week to week.
The Demand Management Engine enables Wells Lamont to spot exceptions on which SKUs are trending up or down by various criteria, and to generate reports for decision support. This gives Wells Lamont real-time visibility and the ability to plan production schedules to meet actual demand.
Wells Lamont leverages the exception capability to identify those items that are not performing to forecast, new items without forecasts, stock items trending toward obsolescence or overstock status, and made-to-order items that have the volume to be reclassed to stock items.
Among the key benefits of the new system are decreased expediting costs, significant improvements in individual product line and channel forecasting accuracy, the ability to reconcile the demand plan with the sales budget, and increased use of customer collaborative data.
Open Communication Wells Lamont has expanded its use of the JGS system by deploying its Planning Portal, a Web-based component that gives users in sales, marketing and operations, as well as external customers, visibility of the current demand plan and product line activity. This allows decision makers to provide needed business intelligence in a uniform way that's incorporated into the demand planning process on a real-time basis, Bartok says.
The JGS software has helped Wells Lamont maintain high customer service levels, and customers have provided positive feedback on the technology, Bartok says. The Planning Portal piece has given customers real-time visibility of the Wells Demand Plan, and they are able to communicate changes to their projections and view differences between their own projections and those of Wells Lamont, he says.
"The technology has also enabled customers to view and compare data in a format not currently available in their own system," Bartok says. "We run exceptions that are available to the customer through the Web that compares different data streams from an individual customer. Say a customer wants to compare their purchasing projections to POS data for a set period of time. We can run that exception and make the results available to the customer on the Web."