Automated store-level replenishment.....wins Best-in-Class award
Feb 03, 2011 Comments (0)
Managing Automation magazine awarded UK-based Paper Island, a subsidiary of History and Heraldry, with the distinguished Progressive Manufacturing 100 (PM 100) Award for the auto-replenishment process it established using Demand Solutions Retail Planning. The manufacturing magazine recognised Paper Island as a best-in-class manufacturer with a model supply chainquite an honour for a company that operates in a highly competitive market where the ability to differentiate based upon supply chain efficiency is increasingly important.
Greetings to a New Auto-Replenishment Process
Paper Island designs and produces creative greeting cards and giftware for all occasions and seasons through its best-selling brands Fizzy Moon and Angels at Heart. The company sells its products to more than 700 independent retailers and several large retail chains. Paper Island launched the auto-replenishment project after experiencing significant stock-outs at its primary customer, one of the largest card and gift retailers in the UK.
"When we realized the stock-outs were resulting in lost sales for both our company and our customer, we decided to evaluate the entire inventory planning and replenishment process from start to finish," says director of operations Phil McNulty. Historically, Paper Island's primary customer replenished its greeting cards using the traditional stock notification ticket placed behind the cards in the greeting card pocket. When stock levels reached a certain point, store staff manually pulled the stock notification ticket and replenished the card pocket with more greeting cards. When Paper Island discovered that tickets were becoming misplaced or lost and not being pulled in time to replenish cards before stocks were exhausted, the company decided to search for a more efficient and automated replenishment process that would guarantee its greeting cards would remain on its primary customer's shelves.
Because Paper Island already utilized two of Demand Solutions supply chain management systems, Forecast Management and Requirements Planning, implementing Demand Solutions Retail Planning was a natural fit for the company to address its store-level inventory planning problem. Demand Solutions ability to optimise store-level replenishment using point-of-sale (POS) data was just what Paper Island needed to streamline and automate the inventory replenishment planning process. Paper Island implemented Retail Planning in just 10 days. After experiencing overwhelming success at the initial 10 pilot stores, the company continued to deploy the software in additional stores. Today, the program is fully functional in 350 of the major UK retailer's branches.
Something to celebrate
Since implementing the new software, Paper Island has achieved substantial results. Most notably, the company has reached its goal of reducing stock-outs and increasing sales. "Shortly after we implemented Demand Solutions, like-for-like sales of our main brand Fizzy Moon were 44 percent higher in the stores being auto replenished through Demand Solutions than in the non auto-replenished stores," says McNulty.
Sales for seasonal items have also increased. Demand Solutions ability to control seasonal challenges was first tested during Christmas, Paper Island's largest sales season. By the end of the season, Paper Island was celebrating its inventory planning success. "Sales of cards and gifts for the Christmas season were approximately 34 percent higher than previous years," says McNulty, who credits the jump in sales to Demand Solutions.
"Although the quality of designs and products were improved, we believe that the sales increase was largely because of Demand Solutions Retail Planning." In order to effectively manage these seasonal spikes in demand, it is imperative that operations run smoothly inside Paper Island's manufacturing and distribution center in Rotherham, as it is the cornerstone of the company's supply chain. With the help of Demand Solutions, Paper Island has been able to refine its operations within the center. "After implementing Demand Solutions Retail Planning, our ability to schedule and manage work through our warehouse has significantly improved," says McNulty. "The warehouse now works to a repeating weekly cycle, allowing the gearing of warehouse resources to meet the growing demand for our products."
Replacing the time-consuming and ineffective replenishment process with a new automated one powered by Demand Solutions was a smart decision for Paper Island. The company has created a mutually profitable relationship with its primary customer and has gained a significant competitive advantage. "Our decision to invest in the auto-replenishment process with Demand Solutions Retail Planning software has not only redefined our supply chain but has allowed us to reinforce our position as a first-class supplier."