The Truth Behind True Value’s $150 Million Supply Chain Investment
Highlights of the ACON Partnership
- Returned over $230 million to more than 4,000 independent hardware retailers, to invest in their businesses.
- Record setting growth in 2018 with 300 new customers and nearly 230 new customers so far this year.
- Doubling field sales team to better serve current accounts while growing our customer base.
- Modernized marketing support to focus on localized, digital capabilities, allowing retailers vast control over the customization of their regular and promotional offers.
True Value has been experiencing continued and incremental growth over the past few years, quickened by its partnership last March with ACON Investment to accelerate the retailer’s long-term strategy to better support independent retailers. Under the new partnership True Value will no longer operate under a co-op model but will distribute to a broader number of independent shops as well. The new strategic approach increased the number of stores True Value serves by 500, bringing the total to around 4,500.
“We had growth before going private with the Acon transaction, but the deal has accelerated that,” says Harrington. “The co-op structure while a great structure had some limitations in terms of who we could sell to and who we could target. Now that we no longer have that structure it allows us to continue to provide exemplary service to those retailers that were part of the co-op but also market to a different set of retailers that do not want to be part of a co-op structure.”
While the building of a new DC in the East and retrofitting the rest of the chain to handle the new hub and spoke supply chain approach was monumental for the brand, equally important is its supply chain software investments. As part of its five-year supply chain transformation True Value has invested in JDA’sDemand and Fulfillment solutions.
“We had been have been on a JDA legacy product and we are now on the most current version of JDA Demand and we just implemented JDA Fulfill,” says Lyndsi Lee, VP, supply chain, True Value. “Our ability to respond to demand variability, promotional variability, as well as our retailers’ unique needs were incredibly challenging with the legacy solution. We needed a more sophisticated demand planning system. We explored many different solutions and JDA was the best from the usability and sophistication perspective as well as the ability to take some of the development in-house.”
Thanks to its improved ability to forecast demand the retailer has been able to reduce inventory across its supply chain network, while maintaining the fill rates its stores rely upon.
“We have seen significant inventory reductions,” says Lee. “We have actually made the strategic decision to reinvest those dollars to make sure we maintain our industry leading fill rates.
“All of our SKUs are being forecasted in JDA Demand. We started that process in 2017 and finished early last year. We are beginning to ramp up our vendors on Fulfillment. We have a handful that are on the system today and we are finishing out the logic, capabilities and change management process to get the rest of our vendors up by the end of this year.