Taking the Pain out of the Holiday Supply Chain

Companies like Rocky Mountain Chocolate Factory and Polar are taking steps to ensure their supply chains bring holiday cheer this year


RMCF decided last year that it would deploy a more sophisticated planning tool that would give it a longer planning horizon, and in June 2007 it purchased the Ross Advanced Planning and Scheduling (APS) solution from CDC Software. Jobson says that APS has given the company much better visibility to all the resources associated with production: supplies, the product that they already manufactured that has to come out of the freezer and go into a box, the equipment, and — moving into this season — labor.

As a result, APS has given the company the ability to schedule a week out tactically and 90 days out for strategic scheduling. The graphic presentation and automated alerts that APS provides also allows executives to identify potential scheduling issues more easily, Jobson says. "You don't have to wade through a pile of greenbar reports to figure out if you're not going to have enough box tops to meet a production schedule." The overall result has been that RMCF is better positioned to ramp up steadily for the holiday season without having to resort to adding labor or paying overtime to meet demand.

One key to the success of the implementation was timing: RMCF deployed the solution during a relatively light production period. The company took the scheduler who was going to go forward with APS and allocated him to work on the project from June 2007 through about December, and the other two schedulers picked up the slack of his day-to-day scheduling during that time. RMCF went live with the scheduling tool in December and used it to do part of the scheduling for January and February. But by March they were ready to roll it out to the entire factory and involve everyone in the new scheduling process, and this year is the first in which the company will be relying on the system to guide it through the holidays.

Keeping Polar's Supply Chain Heart Beating

The holiday season offers a different set of supply chain challenges for Polar Inc., the Lake Success, N.Y.-based unit of Finland's Polar Electro, which invented the first wireless heart rate monitor in 1977 and currently holds about 80 percent market share in its category. The monitors rank high on the wish lists of serious athletes and "weekend warriors" looking to fine-tune their exercise programs for maximum effect, so it's no surprise that Polar does 40 percent of its business in the last four months of the year.

Jeff Padovan, president of Polar, says the company has seen its supply chain grow in complexity over the past 10 years thanks to significant growth in its category, an increase in the number of stock-keeping units (SKUs) the company offers, and the growing diversity of its customer base. "Our customers run the gamut from the publicly traded sporting goods and big-box retailers of the world, all the way down to the mom-and-pop corner stores," Padovan says. "That means that, in some ways, we have a mom-and-pop supply chain for our mom-and-pop stores, but we also have a very sophisticated, technically oriented pick-pack-ship environment for our more-sophisticated customers."

The principle challenges for Polar around the holidays are associated with special packs and with its industry professionals and employee programs. The company already does special stickering for certain of its larger retail clients, but around the holidays it has started to do special pack programs like a "gift with purchase" promotion, for example, a running computer that comes with a free visor. This type of promotion comes to the dealer retail-ready — the retailer doesn't have to assemble anything. Polar uses a manual Kanban process to combine the product with the gift — the running computers with the visors, for example — along with the packaging and the stickering specific for a certain retailer, into a finished good that must then be managed as a separate SKU.

The industry professionals and employee programs involve one-off orders coming in from individual athletes or a staff member at of company with which Polar has an industry purchase agreement. These programs run throughout the year, but they see the most business during the holiday season. In the past, Polar handled these labor-intensive programs internally: a fax or phone call would come in from an individual, and a Polar employee would have to physically enter the order into the order management system and provide follow-up to ensure fulfillment occurred.

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