Finding a Balance
With roots 50-years deep, Murray Feiss Industries is an award-winning, lighting, occasional furniture and decorative accessory company that operates two divisions, each with a totally different business concept.
The New York-based division has thousands of customers, including Expo Design Centers and Sears, with total active SKUs of around 1,500. Each year, this division oversees four new product introductions as consumer offerings must meet current fashion impulses.
The company's second division, Royce Lighting, serves large retail stores, including Lowe's, which has approximately 1,200 active stores and high customer fill rate requirements -- usually 98 percent. Royce Lighting manages approximately 200 active SKUs and adds new collections upon customer approval.
Coming up Short
In 1996, Murray Feiss deployed a forecasting software solution to assist with managing its multitude of products across both divisions. The main disadvantage of this program was the requirement for 18 months worth of demand history to produce a forecast. More than half of Murray Feiss assortments have short life cycles and did not even reach the 18-month mark. To generate forecasts for this group of products, Murray Feiss' information technology and forecast teams developed a homemade Excel spreadsheet-based process for data deemed insufficient, while using the original forecasting software for its more mature assortment.
"Establishing a simple monthly procedure improved inventory levels and inventory related parameters (inventory turnover, fill rate, cash floor)," says Gala Yakubovich, master scheduler for Murray Feiss Import Company. "But after a short time, we realized that it is not enough to establish a process. We needed to improve results in terms of both forecast accuracy as well as decreasing the time allocated to forecast generation."
Enter John Galt
Murray Feiss views its business like a living organism: reacting to external and internal changes almost immediately. The company did not have time to gather data manually and found that forecast and demand management would be a logical and proactive next step. With an intelligent tool, Murray Feiss could predict and react to market changes rapidly.
For data on products with short lifecycles, Murray Feiss chose to deploy John Galt Solution's ForecastX Wizard forecasting tool. The ability to run new product forecasts with low data points, perform product life cycle estimations and have access to a variety of methods and customized forecasting parameters and settings, all within Microsoft Excel, greatly improved the company's forecasting and demand management process.
"In 1999 we had refined our forecasting procedures to such a degree that we were able to partially automate forecast generation for data that was insufficient for [its original forecasting tool], and we also started to allocate some time for analyzing demand," says Yakubovich.
Shedding Light on Demand
The next challenge was to automate and expand this process across the entire enterprise. The forecasters needed to tie separate sources of sales and demand data together in order to produce a one-number forecast and demand plan.
"When we started working with Wizard we already knew what our next step would be: To automate our process with a database solution," says Joe Callado, domestic purchasing manager for Murray Feiss Import Company. "And we knew we were going to take that next step with John Galt," he says.
After using the ForecastX Wizard to build and blueprint a collaborative forecasting and demand management process, Murray Feiss is using the Demand Management Engine to move its Sales & Operations Planning (S&OP) process to the next level. Murray Feiss now has visibility over its entire supply chain, from point of sale to overseas suppliers.
"The biggest difference in our process in moving from Excel to the Demand Management Engine has been the ease with which we can now use external information," says Yakubovich. By building a collaborative process across the enterprise, inventory turns have increased up to 20 percent and the distribution fill rate has risen by 10 percent.
Finding a Balance
Murray Feiss now expects to further improve its demand planning and forecasting capabilities via John Galt's Atlas Planning Suite, which centralizes, standardizes and makes available real-time business information from all the company's data systems.
Powered by ForecastX technology, the suite comprises key applications that extend forecasting and planning capabilities to enterprise-scale supply chain execution: Demand Management Engine, Inventory Management, Promotional Performance Management, Rough Cut Capacity Planning, Sales & Operations Planning and a Web-enabled Planning Portal.
According to both Yakubovich and Callado, planning on a corporate level affects planning on segment (sales, operations, finance, etc.) and department level. Conversely, any changes in detail level planning would affect corporate level. Also, accounting for various opinions and reaching a consensus -- important parts of any planning cycle -- can be done through these applications."We believe that gradual process of involvement of new segments of the business into the process (if it is necessary) could be very effective for our organization," says Callado.
For example, Murray Feiss is currently applying forecasts generated through Demand Management Engine into the MRP application in its legacy system. The structure of Atlas Planning Suite allows users to select individually designed schedules in order to improve the most insufficient part of the process. This enables Murray Feiss to build levels of confidence and comfort.
Murray Feiss expects the concept of merging planning processes in each and every organizational segment into a collaborative planning process to be very effective.
"John Galt has been with us every step of the way as we built our process," agree Yakubovich and Callado. "The expertise of their services team has been invaluable as we walked through our process and is now driving it across our enterprise."