Turbocharging the Supply Chain

With a network of 450 stores that sell home, car, sports and leisure products, Canadian Tire is Canada's largest hard goods dealer and one of its largest independent gasoline retailers. Canadian Tire corporate services its retail locations with 2.6 million square feet of computer-controlled material handling facilities, processing over 60,000 outbound loads annually and having daily throughputs of 280 trailer loads and 370,000 cartons. Through a collaborative trading network powered by Manugistics, Canadian Tire is now able to share more complete demand information with suppliers, achieving time-phased replenishment optimization, a better understanding and synchronization of transportation requirements and increased communication in the extended enterprise. Through this initiative, the company has seen a range of results in its supply chain operations, including a reduction in inventory of $70 million and a 25 percent increase in service levels at its stores. In addition, inbound service levels are up by 20 percent, while purchase order lead time has been cut from 46 days to 15 days. The company has also seen significant improvements in supplier reliability, a reduction in transportation costs and reduced inventory adjustments.

Circuit City Demanding Forecasts

Last year, Circuit City wanted to improve the accuracy of its product demand forecasting across all U.S. retail outlets. At Circuit City, forecasting is a key component of the company's supply chain management activities, with forecast results playing a central role in both corporate and executive management performance measurement. At issue was Circuit City's inability to proactively track forecasting performance on an ongoing basis, which meant it often couldn't make inventory adjustments until it was too late. To remedy this problem, the retailer implemented the SeeChain demand product from SeeCommerce. The new technology has enabled Circuit City to track planned versus actual product demand forecast against a number of variables, including product, store and the manager who created the forecast. One attribute of the SeeCommerce technology that has really benefited Circuit City's planning is the root-cause information it provides. This let's the retailer identify why forecasts are wrong. This also allows the company to make policy and inventory adjustments in time to still meet forecast goals. The key benefits of their new analytical capabilities are a reduction in company-wide forecast error margins and the ability to manage and control forecast performance at both class and item levels with a different emphasis for the holiday period and the rest of the year.

CVS Pharmacy Partnering for Results

One very successful supply chain implementation has been the collaborative effort belonging to CVS Pharmacy, America's number one pharmacy chain and its consumer goods partner, The Gillette Company. The initiative, which received one of the 2003 VICS Collaborative Commerce Achievement Awards, has achieved outstanding quantifiable results for CVS, including increasing sales by 6.2 percent and reducing inventory investment by 34 percent during the first five months of the program. Using JDA Portfolio technology to create a VICS CPFR-compliant infrastructure, CVS and Gillette successfully launched their full-scale CPFR program just weeks prior to their busiest holiday season. In the program, CVS and Gillette converted all 300 Gillette SKUs, including the popular Gillette, Duracell, Oral-B and Braun brands, that ship to CVS' nine distribution centers servicing more than 4,000 retail and pharmacy stores in 32 states and Washington D.C.

From September through December 2002, the partners reduced inventory investment by decreasing average days of supply by 34 percent. At the same time they increased sales by an average of 6.2 percent and reduced cumulative out-of-stock dollars by 28 percent, in both cases, over the prior five-month period. This supply chain initiative decreased returns by 26 percent versus the prior year and increased service levels for turn and promotional products by an average of 1.2 percent. The partners also achieved an improved flow of goods through the supply chain resulting in a first-ship, fill-rate increase of 5.6 percent.

Haverty's Improved Product Availability

Approximately three years ago, leading furniture retailer and distributor Haverty's took a close look at a gap in its supply chain operations that was impacting its product availability. The company realized it urgently needed to improve product availability and reduce the volume of markdown items.

To do that, the retailer implemented Logility technology. Over the three-year period, Haverty's has been able to reduce lead time for getting products through the supply chain by 42 percent and has improved its forecast accuracy by 20 percent. The improvements in its supply chain operations have enabled the company to fully achieve its twin objectives of greater product availability and fewer markdowns.

Overall, Haverty's has increased sales by 26 percent since the beginning of the implementation while keeping inventory under control. The true bottom line impact has been driven by greater customer satisfaction as the result of the company's improved supply chain performance.

Pathmark Achieving One Truth

With the goal of getting to a single truth in its supply chain, Pathmark Stores, an East Coast supermarket chain with 143 stores in New York, New Jersey and Philadelphia, is streamlining its supply chain operations with retail software from Lawson. The company is creating a single framework supporting merchandising and pricing with an exception-based management system by implementing Lawson's Retail Enterprise Solution, including Retail Operations, Smart Notification and Enterprise Performance Management applications, as well as new versions of Lawson's back-office suite.

Pathmark's investment in technology is already showing improved store level productivity as mentioned by CEO Eileen Scott in a recent earnings call. Pathmark's use of technology throughout the supply chain to create one version of the truth is giving the retailer's management and decision-makers the tools and data they need to make more accurate decisions with better analysis and greater speed which allows them to respond quickly to the rapid changes that take place in the grocery environment.

Saks Superior Service

Saks Incorporated operates the 241 department stores in the Saks Department Store Group under the names of Parisian, Proffitt's, McRae's, Younkers, Herberger's, Carson Pirie Scott, Bergner's, and Boston Store, as well as 11 Club Libby Lu specialty stores and Saks Fifth Avenue Enterprises with its 60 Saks Fifth Avenue stores and 53 Off 5th stores. The company is widely regarded for its superior customer service and effective store replenishment strategy that is powered by Logility's Voyager Demand Planning and Inventory Planning solutions. Saks began achieving immediate benefits in its supply chain, as well as ongoing, continuous improvements in service levels, inventory turns and forecast accuracy for basic replenishment items, after the deployment of Logility's collaborative supply chain solutions. "Our customers depend on superior service and expect to find the basic merchandise they are seeking in-stock at their local store whenever they want it," says Marty Abercrombie, vice president of replenishment for the southern region of Saks Department Store Group.

Some of the reported results for this implementation from the department store retailer include increasing in-stock merchandise by 9.4 percent and 4.1 percent at its Proffitt's and Parisian stores respectively. In addition, average sales per SKU increased by 11 percent at Parisian. Saks also found that service levels for basic merchandise, one of its customers' key expectations, increased by a dramatic 35 percent.

staples 9 Steps to Success

Staples follows the VICS CPFR 9-Step Model in rolling out its collaborative partnerships, putting a strong emphasis on the Front End Agreement and Joint Business Plan documents. In one such relationship, with supplier ACCO, the partners use the Manugistics CPFR tool, which Staples hosts for both companies. Staples' CPFR programs work with suppliers and Staples business teams to reach joint consensus relative to controversial business issues. The office supply giant has standardized this CPFR rollout process within its organization, and reduced the time from initial communications to Go-Live by over 50 percent.

In the relationship with ACCO, the office supply retailer has improved communication and information flow between both plan and inventory organizations at both companies, establishing more of a partnership relationship. The shared consensus forecast allows both parties to reduce supply chain inefficiencies and reduce potential buffer stock within the supply chain, typically needed to overcome those inefficiencies.

Staples has developed robust collaborative solutions that are adaptable to various CPFR configurations (scenarios) with minimal IT support. This is allowing Staples to expand its collaborative relationship program with additional suppliers, by building a more robust infrastructure around its planning and forecasting systems and improving its integration abilities with other merchandising systems.

Tesco Shop-Floor Handhelds

At Tesco, one of the U.K.'s leading supermarket retailers, 700 Intermec 700 Series Color Pocket PC handhelds have helped the company's 10,000 shop-floor workers throughout the chain's entire U.K. store network. Tesco's workers use the devices for in-store price markdowns, the printing of new shelf-edge labels, the logging of general stock transactions without the opportunity for human error and the production of planagrams of product layouts and shelf designs.

Tesco is also using the Intermec handhelds in the field for checking delivery accuracy using GPRS connectivity to feed back data in real-time and to check accuracy of deliveries against invoices. The chain reports a 1 to 2 percent improvement in product availability with the use of the 700 Series handhelds. "Before, staff were using two separate systems to control stock," says Tesco IT strategic development director Philip Robbins-Jones. "Now they can do stock control on the shop floor. As a result, staff now feel more confident in answering customer queries."

The Children's Place Triple Fulfillment

In 2002, the Secaucus, NJ, distribution center (DC) of The Children's Place was experiencing the operational constraints that go hand-in-hand with an increased demand on a supply chain. In order to manage its then-current expansion, the retailer decided to move some of its order fulfillment to a second DC in Ontario, California. The California DC, which previously provided order fulfillment for just 120 retail locations, was now responsible for fulfilling product in over 300 locations.

The Children's Place leveraged Manhattan Associates' warehouse management system to optimize its distribution performance and manage the growing demands being placed on its supply chain. As a result, the retailer has been able to eliminate many costs associated with the inefficient movement of goods, redundant processes and excess inventory. The Bottom Line: With its supply chain processes refined, the west coast DC was able to handle the tripling of the number of retail locations to which it distributed without having to hire additional staff.

Timberland Automated By Necessity

For a billion-dollar retailer, a smart supply chain is more of a necessity than a luxury as Timberland found out in the late 1990s when it had a major distribution center (DC) consolidation. That consolidation, which utilized the Manhattan Associates WMS solution, has allowed the retailer to streamline its supply chain, strategically consolidating thirteen paper-based, global DCs into three fully automated DCs without losing a step.

Since the implementation, Timberland boasts a striking 99.9 percent inventory accuracy. The retailer has also seen a significant reduction in cost-per-unit in each of the past six years; an impressive result and a tough task when at the same time, each of the distribution centers has experienced a 600+ percent increase in units per day. As the result of the Manhattan Associates' WMS ability to interface with its material handling equipment, including its sorters and conveyors, perhaps one of the most striking benefits for Timberland is its supply chain's new-found ability to routinely flex production demand up to 300 percent.