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"With improved inventory planning, you achieve that balance
between inventory investment and optimal customer service levels- leading to efficient supply
chain management and enhanced profitability."
Source : Demand Solutions
Case Study: Fetco Home Decor
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Customer Service Issues,
Customer Self Service,
Customer Service Performance,
Customer Service Benchmarking.
When a company begins an implementation of Demand Solutions, one of the
first questions that the implementation consultants ask is: “How would you
describe your current forecasting process?” When a consultant posed this
seemingly routine question to Katie Ward, Director of Planning and
Forecasting at Fetco Home Decor, she replied with a metaphor that
symbolized her three-year experience of forecasting with Excel spreadsheets:
“I feel like I’m caught between hell and a dartboard!” The phrase
resonated with the team because they have heard similar responses, though
less animated, from hundreds of other customers who have made the switch
from Excel to Demand Solutions.
Although the company’s product lines are
trendy and fashionable, Ward’s job was anything but glamorous and the
Excel-based planning system only made it worse. Fetco Home Decor is a
leading designer and wholesaler of fashion frames, albums and wall décor
products. Its collections have become a mainstay at Kohl’s, Wal-Mart, Bed
Bath & Beyond and hundreds of other department stores, clubs, mass merchants,
and more than 2,000 independent shops in the United States.
To Ward’s
relief, the company chose to implement Demand Solutions Forecast
Management (DS FM), Requirements Planning (DS RP) and DS View in 2007.
Fetco’s goals were to remedy the three main business issues it experienced
with a spreadsheet-based process, and by doing so, increase its advantage in
the highly competitive picture-frame market.
Above all other factors,
Fetco chose Demand Solutions because it needed a flexible and stable
system it could rely on. “We were so nervous using the Excel-based system
that we second-guessed every piece of data,” says Ward. “There was no
telling what numbers were accurate because if you sort Excel wrong once, the
whole model could be lost.”
“I was in awe when senior-level
management asked us to bring our inventory levels down by 25 percent, and we
were actually able to do so without affecting our customer service levels
because of Demand Solutions.”
Secondly, the company wanted to increase
efficiency. This was fairly easy to do considering that in Excel, for
example, two people cannot access a file at the same time. With Demand
Solutions, it is no longer necessary to juggle documents back and forth —
saving time and sanity, says Ward.
The last drawback Fetco sought to fix was
its seemingly unmanageable midtier accounts. “With the Excel model, we
weren’t spending enough time on midtier accounts so we ended up overbuying
inventory in order to maintain customer service levels,” says Ward. “We
turned on DS FM and all 15 or so midtier accounts suddenly had robust
forecasts for their SKUs. It was exciting because these accounts rarely had
solid forecasts before.”
Year-one benefits from DS FM have been
significant for Fetco, and needless to say, Ward no longer feels caught
between hell and a dartboard. Demand Solutions has alleviated the problems
the company experienced as a result of planning with spreadsheets and
those benefits have translated into a real competitive advantage. Ward says
that her jaw has literally dropped at times in response to Demand
Solutions’ powerful functionality. “I was in awe when senior-level management
asked us to bring our inventory levels down by 25 percent, and we were
actually able to do so without affecting our customer service levels because
of Demand Solutions.”
With rising gas prices and a questionable
economy, reducing inventory carrying costs and transportation costs are
important for Fetco in order to maintain its status as an industry
leader.
The 100 percent import business designs its products at its headquarters in
Randolph, Massachusetts, and third-party factories in Asia manufacture
them. Even with 90-day lead times for all of its products, Fetco has
maintained a 99 percent customer service level. Ward says that the
company’s year-two goal with Demand Solutions is to maximize its use of DS RP
in order to reduce inventory levels even more while maintaining high
customer service levels.
Although specific cost savings were not a top
objective when implementing Demand Solutions due to the unreliability of
Excel, Fetco experienced a full return on investment in less than 12 months.
“Katie Ward is a perfectionist, as well as a forecast professional, which may
seem to be a contradiction of terms. Her vision for Fetco was not only to
successfully lead the company’s Demand Solutions implementation, but also to
develop a more effective supply chain,” says Kristi Gieseke, Senior
Account Manager for Demand Solutions. “As a former Oliver Wight consultant, I
can say that I have observed no one with more tenacity to accomplish a
mission. With the Demand Solutions suite as Fetco’s tool and Katie at the
helm, her sales and operations planning process is sure to reach Class A
standards.”
When asked if her job has gotten easier through the use of
Demand Solutions, Ward responded with her usual quick and pithy tone, “Are
you kidding me? No! But now I’m adding
value to the forecast rather than just
fumbling through a maze of spreadsheets.”