Brewing up a Smooth Supply Chain

Innovative solutions for diagnosing and fixing supply chain processes gone awry



Looking Inside

Companies also are applying new analytical tools to the challenges of managing their own segment of the supply chain. Case in point: Canton, Mass.-based Casual Male Retail Group, the largest specialty retailer of big and tall men's apparel, with more then 520 store locations throughout the United States, England and Canada. Casual Male is using a solution from Oco Inc. to gain visibility into its sourcing and inventory management, among other things, and has reported increased profit margins as a result of using the application.

Oco, headquartered in Waltham, Mass., provides what it bills as the world's first On-Demand Business Intelligence Platform. Oco offers the solution on a fixed-time, fixed-cost deployment basis with a rather unique money-back guarantee if the customer is not completely satisfied at the end of the six weeks. The solution takes feeds of essentially all of a customer's critical business data in a process that AMR Research's Bruce Richardson compared to "mapping the business genome" for a given enterprise. Oco then organizes the data and feeds coherent information back to the customer in any of 64,000 standard reports.

For Casual Male, Oco streamlined the company's access to vital merchandize and distribution data that has allowed the retailer to better manage its 171,000 stock keeping units (SKUs) across its business. The Oco reports, for instance, may track last week's average daily volume for a given SKU, cross-reference that figure with the amount of on-hand stock and the average for the previous three weeks, and project the likelihood of an out-of-stock. The minute that one of those metrics crosses a threshold, indicating an out-of-stock, or showing items on backorder without sufficient purchase order to clear them, an indicator turns red in the appropriate dashboard and sends out an e-mail to the responsible parties to let them know they need to take action.

In another example of the solution at work, Casual Male was able to analyze a constraint in a distribution facility that appeared during the company's rapid growth. By using the reporting within Oco, the retailer identified that SKUs were being stored in more than a dozen different locations within the distribution center, representing a possible drag on the company's quick shipment program for customers. With that information in hand, Casual Male was able to work with the DC's managers to streamline the warehouse operation and improve their logistics. Overall, Dennis Hernreich, executive vice president, chief operating officer and chief financial officer for Casual Male Retail Group, has estimated that the company has increased its profit margin by 3.5 percent over the last two years by leveraging Oco's solution.

Looking Downstream

Finally, still other enterprises are looking to apply BI/PM solutions to their downstream supply chains — which brings us back to Andy Cullen and his planning and export team at Guinness.

The beer brewer is a division of Diageo, the $19.2 billion global company that was formed in 1997 with the merger of Guinness and GrandMet. Diageo is headquartered in London, but Guinness continues operations in the heart of Dublin at its landmark St. James's Gate Brewery, acquired under a famously far-sighted 9,000-year lease secured by company founder Arthur Guinness in 1759. With approximately 10 million pints of Guinness consumed on the planet each day, job one for the company's supply chain function is to ensure availability of the beer for its many devotees around the globe. So after learning that Guinness' U.S. customer — actually a sister division, Diageo North America — was rating their service levels at around 50 percent, far below Guinness' own estimate of virtually 100 percent, Cullen and his team returned to Dublin determined to increase their service levels.

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