By Bob Johns, Integrated Solutions for Retailers Magazine
Home Hardware is a co-op wholesaler owned by more than 1,000 independent business operators with three distribution centers across Canada. As the co-op has grown, it has outgrown its legacy fulfillment solution. The company works with more than 2,600 suppliers and services its four banners, Home Hardware, Home Hardware Building Centers, Home Building Centers, and Home Furniture. Keeping the inventory for each of these brands was becoming costly and cumbersome, creating inefficiencies in both time and stock levels.
“The co-op is seeing a 10 percent reduction in excess inventory and safety stock and a 2.5 percent increase in service levels to stores… this means reduced inventory costs and maximum return on promotions, while maintaining adequate stock levels and minimal out-of-stocks.”
Inventory control manager, Steve Allgeier, worked with a team of fulfillment and IT professionals to locate a solution allowing them to streamline inventory operations, create better planning, and reduce out-of-stocks…
From Good to Great: Already industry leaders, Martin Bros. continues to Increase Service & Reduce Inventory.
Martin Bros., one of the most highly respected companies in the foodservice industry, is a full-line distributor that stocks an inventory of 11,000 items, including food products, large equipment, small wares, medical supplies, and janitorial and cleaning supplies.
“You need the right team, and that team needs the right tools to succeed”
— Jennifer Meinders
From the perspective of Jennifer Meinders, Purchasing Director, her team of replenishment buyers is key to providing the company’s legendary customer service. They now consistently achieve first-pass order fill rates of 99.6 percent before item substitutions. This was accomplished while reducing overstock by 25 percent.
Procurator improves in-stock performance from 89% to 97%, while at the same elevating inventory turns from 2.9 to 6.5
Swedish retailer Procurator had found they were disappointing customers because too much product was out of stock.
This retailer of industrial safety supplies to the Nordic countries carries more than 19,000 SKUs in its stores across five countries. In-stock performance was 89%. Turns were 2.9, and inventory was valued at 127 million Swedish kronor (or about $19.3 million U.S. dollars).
The company’s ERP system generated inaccurate forecasts, and it couldn’t manage inventory across their 4 distributions centers and 17 stores. Nor could it manage the often long and highly erratic lead times of Procurator’s suppliers.
The Procurator purchasing team chose and implemented the CLARITY demand forecasting, replenishment and analytics solution from Blue Ridge.
The company’s financial performance improved quickly and dramatically. In-stock performance improved to 97%, while inventory turns increased substantially to 6.5, with inventory declining to 102 million, all in just nine months.
In just over a year, Procurator approached 98% in- stock with a 25% inventory reduction.
K. Ekrheim grows revenue 12%, reduces inventory by 14%, improves cash flow by 300% and increases profit 181%
Haakon Ekrheim felt his family-run business had come to the edge of a cliff – or to be more accurate, a fjörd. He was managing director for the third generation of one of Norway's only five food wholesalers. And things were not looking good.
This is the story of how the company turned its business around.
Norway's economic growth turned negative in 2009, as it did in many parts of the Western world. In addition, an important customer was threatening to take their business to one of Ekrheim's competitors.
Profit and income for the business were already down, and the customer would be hard to replace.
“Haakon Ekrheim credits his company's relationships with Blue Ridge and Inventory Investment for turning the business back from the edge of the cliff he felt he faced in 2009.”
To say the least, CRP Industries has experienced tremendous growth. Dan Schildge, President of CRP Industries notes,“Business has pretty much close to doubled.” In the face of rising demand, the company found it impossible to effectively manage their complex supply chain with their ERP solution. CRP teamed with Blue Ridge to align inventory and supply. Dan Schlidge now reports, “We’ve been steadily improving fill rates, service levels are up. We’ve also had noticeable improvements in our inventory turns. It’s hard to do both of those at the same time, and we’ve been able to do it.
The July/August issue of SupplyChainBrain puts an emphatic spotlight on partnerships that drive success in the Supply-Chain Management industry. The magazine’s feature story highlights the most influential supply-chain partners whose solutions have had a direct and measurable impact on sales and supply-chain success. In the first installment of the feature, the editors profile the compelling story of CRP Industries’ opportune partnership with Blue Ridge, “When You Are In Demand, You Need a Good Plan.”
They implement the SKU Rationalization inventory solution from Blue Ridge. Henry Schein, Inc., is a FORTUNE 500® company and a member of the NASDAQ 100® Index, is the largest provider of health care products and services to medical, dental, and veterinary office-based practitioners. The Company is one of Fortune Magazine's "World's Most Admired Companies", and is ranked number 1 in its industry in social responsibility and global competitiveness. Schein's 31 distribution centers ship nearly 12 million orders annually to over 700,000 office-based practitioners. In the US and Canada, 99% of orders are shipped the same day and delivered within two days of placement with nearly 100% accuracy.
Henry Schein has become the leader in their industry by providing superior customer service, necessitating their goal to fulfill over 90% of customer orders completely. The company found it very costly to support their goal, as they carried over $160 million in inventory, and nearly 250,000 items. The company decided that in order to sustain their leadership position, they would have to enhance their profitability and cash flow without endangering their customer service goals. In fact, Schein was hopeful of increasing customer service while decreasing their inventory and item count.
It was decided that Henry Schein needed to get more sales from fewer total item/locations by optimizing the inventory deployment for each location to meet customer demand. By understanding the demand for each location, the company could be assured to have the products in each location that best fulfilled customer orders. Additionally, by removing slower or non-moving items, they could meet their inventory profitability goals.
Schein selected Blue Ridge to design and implement CLARITY, Blue Ridge' inventory deployment optimization solution for retail and wholesale. CLARITY analyzes the demand for each location, and determines the items that meet the customer service goals, and meet the inventory profitability goals of Henry Schein.
The benefits of inventory deployment optimization are proven. Henry Schein sent carrying cost reductions of $600,000 right to the bottom line, and reduced freight cost by 9%, over $1.3 million – in just 6 months after implementation. All while increasing customer service and securing their position as market leader. The effects of improved inventory deployment are long-lasting.
Reducing carrying cost, freight, obsolescence and lost sales provide benefits your company experiences forever. With a better mix, you can improve sales, cash flow and margin…and outpace your competition.