shoe manufacturer steps up to improve s&op€¦ · shoe manufacturer steps up to improve...
TRANSCRIPT
10/21/2013
1
Stephanie Grothe, CPIM, CSCP
Process Improvement Manager
Red Wing Shoe Company, Inc.
Karin Bursa
Vice President
Logility, Inc.
Shoe Manufacturer Steps
Up to Improve S&OP
Stephanie Grothe
Stephanie Grothe has been in her current roll as process improvement manager at
Red Wing Shoe Company for just over a year and previously spent four years as
forecast analyst for the footwear and apparel leader. This new position allows the
opportunity to utilize her human relationship management skills along-side the
technical expertise she has development in managing Red Wing’s inventory and
supply chain productivity. She has made huge strides as process improvement
manager helping Red Wing slash its sales and operations planning efforts by 50%
(from six weeks to three weeks). Prior to joining the team at Red Wing Shoe Company,
Stephanie was an Operational Planning Analyst, and held other material management
roles in her 8 years at Hearth & Home Technologies, Inc.
Grothe is APICS certified in Productions and Inventory Management (CPIM) and is a
certified Supply Chain Professional (CSCP). She also holds a Bachelor of Arts in
Materials/Operations Management from the University of Wisconsin-Eau Claire.
Stephanie has been an active member in APICS since 2001.
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Karin Bursa
Karin L. Bursa, vice president of marketing at Logility, oversees the company's market positioning,
strategy development and marketing programs for Logility Voyager Solutions™, the company's
full suite of collaborative supply chain optimization solutions. Ms. Bursa is known for her strategic
vision and market knowledge and is experienced in the development, support and marketing of
software solutions to improve and automate enterprise-wide operations including supply chain
management, manufacturing, financial, field service and asset management. She began her
career as a consultant for Andersen Consulting (now Accenture) where she focused on the
manufacturing and telecommunications industries. Ms. Bursa has been at the forefront of
innovative demand-driven manufacturing, supply chain management and B2B collaboration
initiatives such as the Voluntary Interindustry Commerce Standard (VICS) Collaborative Planning,
Forecasting and Replenishment (CPFR) committee and Flow Manufacturing.
Ms. Bursa is often quoted in industry publications, speaks frequently at industry forums and is an
active member of the Council of Supply Chain Management Professionals (CSCMP), Voluntary
Interindustry Commerce Standards (VICS) Association, APICS, Women in Technology (WIT), and
the Technology Association of Georgia.
Who is Red Wing Shoe Company?
• We design shoes for the demanding work of industries such as mining, logging and farming
• Founded in 1905 in Red Wing, MN
• 6 Brands make up RWSC (Red Wing Work, RW
Heritage, Vasque, Irish Setter Hunt & Work and
WORX
• PPE Workwear / Fire Retardant protection launched
in 2010
• Our culture is based on a commitment to producing
the highest grade footwear
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Who is Red Wing Shoe Company?
• Manufacturing facilities:
– Two domestic footwear facilities
– Internationally (Footwear & PPE)
• China (4), Mexico (2), Pakistan (1), Dominican Republic (2), Vietnam (1), Poland (1)
• Retail locations:
– Sold in 150+ countries world-wide
– 450-500 domestic
– 4 Heritage stores in Europe and 2 in Asia with more
planned by end of 2013
– 50 industrial trucks
– 47 B2B showrooms internationally
• Distribution warehouses:
– Red Wing, Salt Lake, Houston, Japan, Dubai, Netherlands, direct shipments
Red Wing Shoes Display
Our First Steps
• Old Sales and Operations Planning (S&OP) process took 6 weeks – Reactive and manual
– Nobody “owned” the results/process
• Labor intensive forecasting with
450+ pages of spreadsheets– Limited forward visibility
– Error prone manual process
– Unreliable information to make decisions
– No tracking of changes or why we made them
– No collaboration with our sourcing and manufacturing teams
• Inside-out S&OP process relied on product development input
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Manual Monthly ProcessOne Style by Production
Largest Brands were More
Complicated
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Supplier Summaries
A Step in the Right Direction
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A Giant Leap Forward
• Better forecast and inventory positions
• Collaboration with suppliers– Increased visibility
– More credibility and confidence
• People, process and technology – Leverage APICS training and certifications
– Established dedicated demand planners
– Selected Logility Voyager Solutions
• Streamlined S&OP process– Outside-in thinking
– Brands took ownership of demand planning
Demand Planning Made Easy
• From clunky spreadsheets to dynamic views
• Significantly decreased effort to produce our
forecasts
• Gained global visibility by brand and company
• Suppliers trust our information
– Style level order based forecast
• Forecasting for 8 manufacturing locations around
the world
• Forward-looking 18 month rolling plan
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Logo Here
Voyager Demand Planning View
Logo Here
Voyager Supply Planning View
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S&OP Redefined
• Closed loop S&OP process
– 50% reduction in effort, down to 3 weeks
from 6 weeks
– Plans are “owned” by brands
– Collaboration between executives, finance, brands,
supply chain, distribution, product design
• Better forecast=better information=trusted
partner
S&OP Process
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S&OP Calendar
Supplier Collaboration
• Suppliers say Red Wing provides the
“best information we’ve ever had”
• Visibility of 12 months demand
• True partnership with suppliers
• Style level, order based forecast
• Weekly call with suppliers, shared views
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Quick Steps Forward
• Logility Voyager Solutions
– Demand, Inventory, Replenishment, Supply
Planning and Collaboration
• Inventory stratification
– ABC by service level to refine safety stock policies
• Leverage more product specific information
• Exception-based processing helps our
planners focus on what’s important
Results
• “Logility is a Game Changer”
– Red Wing Executive
• Slashed S&OP effort by 50%
• Tripled our forward visibility, with better data
• Reduced inventory by 5-10%
• Increased fill rates 8-10%, continues to rise
• Realigned safety stocks to match service policies
• Smarter integrated business planning and more
value added analysis
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Successes
• Reduced Forecast Error based on WMAPE
– Decreased from 34.6% to 28% (last month 24.6%)
– Decreased from 17% to 12.5% for higher volume
brands
– Dramatically Decreased Reporting Time
• What took 6-8 Hours now is just 2-3 Minutes!!
• Decreased Chassis Rental/Demurrage charges
by over 50%
What’s Next @ Red Wing Shoes?
• Growth on core work, outdoor, hunt and
heritage products
• Continued growth into the garments
• IT infrastructure
• Web sales
• International growth
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Logility Overview
• Global provider of collaborative supply
chain software solutions
• Over 1,250 customers in more than
75 countries
• Comprehensive Best of Breed SCM
solution suite
• Sample customers
Sales & Operations Planning
©Logility
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S&OP Maturity Path to Success
Key Element Developing Performing Leading
Objective Create a feasible plan Optimize revenue,
customer service,
inventory, profit
Achieve corporate
strategy
S&OP System Excel spreadsheets Advanced Planning
System heuristic
Comprehensive supply
chain planning and
optimization
S&OP Execution Manually executed
plans
Manually keyed into
tactical planning and
execution systems
Automatically
integrated into tactical
planning and
execution systems
Demand Consensus None Manual consensus Online collaboration
Source: Logility and Deloitte, 2013
What are the Top Obstacles to
Achieving Your Goals?
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Tangible ROI from S&OP
A successful S&OP initiative can…
Source: Gartner / AMR Research, S&OP Transformation from Tradition
Improve Revenue 2-5%
Reduce Inventories by 7-15%
Improve new product launch commercialization by 20%
S&OP Success Factors
• Make S&OP meetings a high priority and disciplined process– Identify an executive sponsor
– Tie corporate goals to operational activities
– Have a structured meeting agenda
– Boost consensus and accountability
• Establish TRUST in the numbers and people
• Get to a forward-looking horizon of 12 to 36 months
• Leverage shared metrics across key business areas– Keep the number of metrics
small & manageable
• Require an unbiased baseline forecast to start the process– Adopt customer-level
forecasting for “top” customers
• Move beyond simple “rules of thumb” inventory policies to inventory optimization
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Survey
www.tinyurl.com/kmd5lrs