Managing Automation - September 2007 - (Page 42)

ESSIVE MANUF PROGR IGH ACHIEVERACTURING H 2007 SUPPLY NETWORK MASTERY THE SMEAD MANUFACTURING COMPANY Office products supplier and its large retail customers win with collaborative planning and forecasting software. B Y L AU R E N G I B B O N S PAU L company facts espite major advancements due to automation in recent years, forecasting remains a weakness for most manufacturers and their suppliers and customers. For years, office products manufacturer The Smead Manufacturing Co. suf fered common forecasting woes: overly optimistic estimates in advance of promotions and depleted safety stock when demand came in higher than expected. It all added up to one thing: increased inventory. “Our inventories kept growing,” says Sandy Webb, forecast manager for Smead, which was founded more than 50 years ago by Ebba Hoffman and is now run by THE SMEAD MANUFACTURING her daughter, Sharon HoffCOMPANY man Avent. “Business manTOTAL REVENUE/EMPLOYEES: $497 million, agers couldn’t get enough inprivately held/2,600 employees formation to plan better. If we LOCATION: Hastings, MN increased business by 20%, INDUSTRY: Office products we would probably see at CEO: Sharon Hoffman Avent least a 10% increase in invenPROJECT LEADER: Sandy Webb tory.” And the factory often CORE TECHNOLOGIES USED IN PROJECT: had to wait for materials to Oracle PeopleSoft release 8.9; Maximo maintenance be transferred among waresoftware; Logility Voyager supply chain management houses, which added to lead software times, increasing cost and deROI/BUSINESS BENEFIT: 98%-plus service levels creasing customer value. with targeted customers, doubled sales and SKUs with All planning and replenless than 30% growth in inventory, and improved foreishment was done on Excel cast accuracy by 15% spreadsheets and a homeSeptember grown application that had long outlived its usefulness. Smead management was beginning to evaluate adding more warehouses to its five existing ones. Not surprisingly, the prospect was not appealing. The inability to plan was a par ticularly thorny problem because Smead’s customer base had changed significantly during the late 1990s and early 21st century. Whereas the previous generation of customers had been mostly B2B contract customers or wholesalers, the new crop comprised large office product retailers, such as Office Depot, which had notoriously unpredictable buying habits. Promotions and an early-year busy season would send order quantities rocketing skyward and then plummeting just as rapidly. “Retail customers have much more erratic purchasing patterns. If anyone makes a move, it has a big impact at the demand level,” Webb says. “We needed to put more information into the planning system so the factory floor wasn’t getting surprised by orders three or four times bigger than what they expected.” Smead also needed to work more closely with its customers to plan for demand spikes, such as filling end caps in stores. “We needed to spread out the demand so we didn’t overwhelm the factory.” BETTER FORECASTING In the late 1990s, Smead began to shore up its forecasting and replenishment capabilities by implementing a package from American Software, which in subsequent years became Voyager Solutions Collaborative ma 42 2007

Table of Contents Feed for the Digital Edition of Managing Automation - September 2007

Contents Take 1 Europe’s Automation Chiefs Upbeat on ’08 Business Prospects Vendor Coalition Pushes Human Element of SOA Wireless: Users Still Approaching with Caution One Year Later, IBM Shows Plan for MRO’s Maximo Study: More Work Needed to Lure Next-Gen Talent Executive Q&A Notes Cover Story: 2008 Companies to Watch Special Report: The 2007 Progressive Manufacturing High Achievers Progressive Manufacturer of the Year Business Model Mastery Innovation Mastery Customer Mastery Supply Network Mastery Data & Integration Mastery Education & Training Mastery Operational Excellence Mastery Leadership Mastery Transformation: Orchestrating the Multi-Tier Supply Network Integration: The Timeless Quest for Accurate Data Industries: Maintenance No Longer on Schedule Product Scan Advertiser Index Next

Managing Automation - September 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.