2008 Supply & Demand Chain Executive 100

100 ways to innovate your supply chain with the providers of next-wave supply chain services and solutions


Staples Inc.

Staples, Inc.
Framingham, MA/USA
www.staples.com
Large
1986
Procurement

While Staples Contract continues to help some of the world's largest organizations build efficient supply chains by delivering on its promise to help customers achieve "low total delivered cost," the company says the "next wave" of supply chain innovation is not only focused on reducing waste for business sake. More companies of all sizes are focused and committed to reducing waste because it's good for their business and the environment. As a result, they increasingly need unique solutions to help them achieve both goals.

Staples Contract recently introduced innovative solutions to help customers achieve their green procurement goals, including the office product industry's first online catalog for contract customers to drive greater convenience, efficiency and compliance for the procurement process. Staples Contract has also expanded its green catalog offering to include a dedicated online catalog for Staples' wide selection of green products. The Staples "Green Guide" makes it easy for customers to find and select hundreds of eco-friendly products ranging from paper and toner to unexpected categories like desk accessories, furniture and cleaning products.


Sterling Commerce
Dublin, OH/USA
www.sterlingcommerce.com
Medium
1996
Order/Demand Capture, Procurement, Fulfillment/Logistics, Payment, CRM, Integration & Infrastructure/ERP

In spite of retailers' best efforts, according to Sterling Commerce, 67 percent have yet to successfully meet customer's expectations of a seamless purchasing and delivery process across multiple channels. The company believes the "next wave" of supply chain innovation will be the delivery of multi-channel selling and fulfillment capabilities to achieve seamless cross channel excellence. Sterling Commerce is working to innovate these areas to enable companies to deliver a better shopping experience for their customers in the most cost-effective way.


ToolsGroup
Cambridge, MA/USA
www.toolsgroup.com
Small
1993
Order/Demand Capture, Fulfillment/Logistics, Decision Support

With millions of possible SKU/service level combinations, the best a company's planners can often do is estimate the high level trade-offs and then spend time compensating, either by expediting, or, in the case of retailers, by discounting.

By contrast, ToolsGroup's modeling technology understands the SKU-by-SKU demand variability that is at the heart of inventory issues. It sets targets at an SKU level, not aggregate level, for each stocking location. And because it precisely targets and continuously optimizes inventory, its customers don't blindly overstock; they buffer where there is a likelihood of demand and sales.

The company accomplishes this through its Service Optimizer 99+ percent (SO 99+) solution, which optimizes inventory mix by understanding each SKU's stock to service relationship, balancing working capital and customer service objectives. Customers improve short-term forecast accuracy and correctly set safety stocks, achieving up to 99+ percent customer service levels while significantly cutting inventory.

Case Study: Mohawk Paper Mills Goes for 99+ Percent

In 2005, Mohawk Paper Mills, a privately-owned company known for its brands, including Strathmore, Navajo, Becket, Via and BriteHue, acquired the Fine Papers division of International Paper, significantly increasing the size and complexity of their business. After a best practices gap analysis, Mohawk was determined to create a strong central sales and operations planning (S&OP) process to manage the business, which would enable Mohawk to focus on decisions that immediately impacted performance. Some of the main benefits included:

  • Higher service levels on made-to-stock business and more aggressive pursuit of made-to-order business.
  • Reorganization and management of the interdependency of target service level and inventory investment.
  • Reduction of inventory and delayed capital investment in buildings while supporting increased sales.
  • Resolution of capacity issues based on product profitability and business contribution.

To achieve these benefits, the company employed ToolsGroup's SO 99+, which defined inventory targets for each stock item at each location across the network and performed forecasting, service level planning, and inventory mix optimization. It also handled requirements planning, resupply of regional (level two) DCs and passed manufacturing replenishment requirements to their production scheduling system.

Over the course of project, Mohawk's customer service level metric was changed from "order lines shipped complete within five days" to "order lines complete and available at time of order." Within six months customer service levels leapt from 85 percent to 93 percent; this was accomplished in spite of the more demanding goal and in the wake of significantly reduced expediting. In addition, the company reduced global inventory 25 percent, while supporting an 8 percent increase in sales, resulting in a 40+ percent improvement in inventory turns. Both the improved service levels and the optimized stock inventory mix have led to improved profitability to the company.

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