Optimizing Parts Management at BC Transit

Introduction

BC Transit’s vision statement is to be Your Best Transportation Solution. BC Transit accomplishes this by transporting 57 million annual passenger trips in over 130 communities across British Columbia.  Transit is becoming a key part of the solution for many of the complex challenges that communities face across the province, such as climate change, affordability and congestion, and as a result transit service is expanding quickly (9 per cent growth in the past five years). Delivery of this service in a safe and timely manner is paramount. BC Transit’s fleet of 1,185 buses require regular maintenance and rapid repairs to ensure they are as effective and efficient as possible.  Having the right part in the right place at the right time is essential.  Eric Nelson, Director of Supply Services, discussed the challenges of meeting this responsibility and how their use of Smart Software technology is helping make BC Transit the best transportation solution.

BC Transit manages 30,000 discrete skus Distribution Centre

The Challenge:  

BC Transit was preparing to centralize warehouse operations around a new central distribution center, just as the organization was preparing to upgrade to a new version of its JD Edwards Enterprise Resource Planning (ERP) system.  They needed to determine the right stocking levels to serve the entire BC Transit network with 35 active branch plants under an aggressive timeline.  In a matter of weeks, the transition would begin to their new ERP and wholesale system updates would be barred.

This was no small matter as BC Transit manages 30,000 discrete skus. Space in the new consolidated Provincial Distribution Centre would be at a premium, and parts planning was a highly manual, qualitative process.  Reorder points were set manually, based on weekly requisitions and the buyers’ knowledge and judgement.  The move to the new CDC model would require setting optimal reorder points for all stocked parts.  The existing process would not be able to do this – there were just too many parts.

Compounding the challenge was the highly intermittent nature of BC Transit parts demand.  Rather than following a routine, easily forecastable pattern, service parts often experience highly sporadic, seemingly random demand.  Qualitative methods and intuition would not ensure the 95% service level that BC Transit required.  The organization needed a better solution.

warehouse operations around a new central distribution centerThe Solution: 

BC Transit turned to Smart Software.  Nelson was aware of Smart’s work with other transit systems and was drawn to Smart Inventory Planning & Optimization for a number of reasons:

  • Service level-driven planning methodology with probabilistic modeling, enabling ‘what if’ scenario development. and cost vs. performance trade-offs;
  • Proven ability to plan for intermittent demand, demonstrated across multiple transit customers;
  • Cloud-based suite of web applications, providing anywhere access and eliminating the need for IT infrastructure; and
  • Automated data integration and analytics, providing the continuous flow of data from and the return of optimal Min/Max drivers to JD Edwards to drive replenishment.

Smart and BC Transit worked through an accelerated implementation process to get their initial system up and running within two months.  BC Transit was able to establish stocking policies to get the new warehouse and central distribution system up and running.  Once initial policies were set, they used the first year of operations to monitor and refine reorder points.

“The big change,” says Nelson, “was to shift from the qualitative, manual establishment of reorder points to a highly automated system of setting Min/Max values for all active parts.”

Year 1 focused on getting the process working and relating the new capabilities to overall supply chain operations.  The experience established confidence in the system.  Their enhanced planning process now treats new items manually until they experience three incidents of demand.  At that point the demanded parts transition into production planning and are included in the routine, monthly automated process.  Plans are now underway to push Min/Max planning out to the 28 regional transportation systems and all 35 stocking locations.

Results: 

“We could not have consolidated central distribution into one facility without Smart,” says Nelson.  “During the transition we discovered a need for 3,000 additional SKUs.  There just wouldn’t have been room.  It is difficult to put a monetary value on this.”

Using Smart IP&O, BC Transit was able to internalize the impact of centralizing all external shipments.  They were able to consolidate demand for all regional transit systems and foresee required stocking levels.  Nelson added, “we did not see any instance of incorrect forecasts.  And we were able to set policies effectively for parts with exceptionally sparse demand.”

BC Transit values its newfound ability to forecast the financial impact of stocking decisions.  They are able to balance capacity against criticality and the cost of inventory.  They have been able to reduce the number of orders, determine optimal order quantities, and deal with variability of lead time – especially long lead times.  “Smart IP&O has enabled us to utilize service level as a driving KPI, essentially risk adjusting our inventory to address the criticality of not running out, and to deal with the thorny challenges of seasonal and intermittent demand.   It is helping us keep our buses on the road, so we can be the best transportation solution for our partners across British Columbia.”

 

 

 

Draped in Success – Inventory Planning at Rose Brand

Introduction

Rose Brand is North America’s largest provider of theatrical fabrics, fabrications and production supplies for the entertainment, event and display industries.  If you’ve been to a play or musical, you’ve probably seen their products.  Product availability is crucial to the company’s success, and the company strives to achieve same day shipping from its east and west coast distribution centers. This is a tall order when offering thousands of discrete items.  Doug Harvey, Director of Operations, sat down with us to explain how Rose Brand delivers, and how Smart Software helps.

Rolls of knitted fabric in assortmentThe Challenge:  

“Having the product in stock is everything,” explains Harvey. “Rose Brand customers know what they want and usually want it now. If a requested item is not in stock, there is a good chance Rose Brand will lose that order and several more, and the customer may not come back.”   The array of products is wide and complex – over 10,000 skus, many offered in 5, 10, even 30 colors.  And it’s gotten more complex.  The company recently acquired a manufacturer of curtain tracks and motors.  Lots more parts.

Accelerating growth strained a procurement process that relied heavily on buyers’ domain knowledge and gut feel.  Many of their stocked items experience highly sporadic, intermittent demand that staff were ill-equipped to plan.  Determining when to order was based on rudimentary spreadsheet models that required extensive manual adjustment, so much so that most items – particularly the thousands of slow movers – were not actively planned.  The lack of a methodical planning process, combined with the criticality that they not stock out, resulted in overstocks, stockouts, and strained limited warehouse space.

The Solution: 

Rose Brand selected demand and inventory planning software from Smart Software as the foundation for a methodical planning process.  This enabled them to effectively implement Min/Max inventory planning, setting optimal Minimum On-Hand values and order quantities.  Two capabilities in particular made a big difference.  First, the ability to conduct service level-driven planning made it possible to risk adjust inventory.  Some critical items cannot be allowed to stock out, and so are be run at very high service levels.  A 1% risk of stocking out might be acceptable. Others that are less critical can tolerate lower service levels.  This risk adjustment of inventory, and achieving required service levels, reduces inventory and improves service levels.

Second, the software included Smart’s unique methodology for planning intermittent demand.  This method, invented and patented by Smart, probabilistically models lead time demand and establishes the requisite Min or reorder point corresponding to the desired service level.  Items with this sort of demand profile can now be effectively planned.  Way better than knee-jerk or wild guess adjustments to random stockouts.

In addition to providing effective inventory policy drivers, SmartForecasts enabled staff to consider and model what-if scenarios.  For example, Rose Brand purchases 1.5 containers from a vendor every 4 weeks.  If their supplier could deliver in 3 weeks, how much inventory – and warehouse space – would that save?  Half a container.  A lot.

Results: 

Rose Brand reduced inventory at the outset, and as its business grew, managed slow inventory growth as sales increased 50%.  A crucial factor in that growth has been the company’s ability to respond to customers’ increasing insistence on immediate availability.  SmartForecasts has enabled the company to effectively plan all of its thousands of stocked products, and has provided the planning framework for the company’s growing infrastructure.  This included the addition of its West Coast warehouse, and the inclusion of a newly acquired division in 2018.

“Rose Brand has undergone tremendous change and growth since its founding in 1921,” says Harvey.  “Smart Software has brought capabilities that help us meet accelerating demand and expectations, and we look forward to pushing this envelope together in coming years.”

 

 

 

“Choosing and Achieving a Target Service Level” by Smart Software Co-Founder Profiled in Spring 2018 Issue of Foresight

Belmont, Mass., May 17, 2018 – Smart Software, Inc., provider of industry-leading demand forecasting, planning, and inventory optimization solutions, today announced that the Spring 2018 issue of Foresight Magazine features Dr. Thomas Willemain’s article “Choosing and Achieving a Target Service Level.”  Len Tashman, Editor of Foresight states: “Tom Willemain describes the primary considerations for setting service-level targets, explaining how software can serve as a valuable aid in this endeavor and offering a case study to illustrate a relatively simple approach – what he calls “service level wins and losses” – by which a company can evaluate how well it is achieving its service level goals.  The case study also reveals how important it is to utilize appropriate probability models rather than rely on traditional defaults such as the Normal distribution of demands.”

To read the entire article and to learn more about Foresight please visit https://foresight.forecasters.org/

About Smart Software, Inc.
Founded in 1984, Smart Software, Inc. is a leader in providing businesses with enterprise-wide demand forecasting, planning and inventory optimization solutions.  Smart Software’s demand forecasting and inventory optimization solutions have helped thousands of users worldwide, including customers at mid-market enterprises and Fortune 500 companies, such as Otis Elevator, Mitsubishi, Siemens, Disney, FedEx, MARS, and The Home Depot.  Smart Inventory Planning & Optimization gives demand planners the tools to handle sales seasonality, promotions, new and aging products, multi-dimensional hierarchies, and intermittently demanded service parts and capital goods items.  It also provides inventory managers with accurate estimates of the optimal inventory and safety stock required to meet future orders and achieve desired service levels.  Smart Software is headquartered in Belmont, Massachusetts and can be found on the World Wide Web at www.smartcorp.com.


For more information, please contact Smart Software, Inc., Four Hill Road, Belmont, MA 02478.
Phone: 1-800-SMART-99 (800-762-7899); FAX: 1-617-489-2748; E-mail: info@smartcorp.com

Smart Inventory Planning & Optimization to be Showcased at Epicor Insights

Belmont, Mass., May 14, 2018 – Smart Software, Inc., provider of industry-leading demand forecasting, planning, and inventory optimization solutions, today announced that Epicor Software will present Epicor Smart IP&O, a joint solution for inventory planning, forecasting, and optimization at Epicor’s annual customer conference in Nashville, TN from May 21 – 24 .  Smart Software will also be on hand to profile the solution in booth # 5 in the Solutions Pavilion.

Smart Software and Epicor’s collaboration  brings the cloud-based Smart IP&O (Inventory Planning and Optimization) into the latest version of the Epicor enterprise resource planning (ERP) solution. Smart Software’s Chief Technology Officer, Sree Menon states “it’s no longer enough to simply manage inventory. By seamlessly integrating strategic planning with operational execution, Smart IP&O enables Epicor ERP users to continuously predict, respond and plan inventory helping lower costs and improve service.”

The Epicor Sales Engineering team will demonstrate Epicor Smart IP&O in two sessions:

“Introducing Epicor Smart Demand Planning & Inventory Optimization”
Thursday, May 24 at 8:00 AM
Tennessee Ballrom B

“Moderniza las Operaciones de tu Cadena de Suministro con la Plataforma Epicor Smart Inventory Planning and Optimization”
Thursday, May 24  at 10:20 AM
Ryman Studio H/I

Epicor Insights 2018 will bring together more than 3,000 users of Epicor’s industry-specific ERP solutions for the manufacturing, distribution, and service industries. Customers who attend will have dedicated education tracks focused on their specific products and solutions, plus more opportunities to network across products and industries. To learn more, visit https://www.epicor.com/customers/insights/default.aspx

About Smart Software, Inc.
Founded in 1984, Smart Software, Inc. is a leader in providing businesses with enterprise-wide demand forecasting, planning and inventory optimization solutions.  Smart Software’s demand forecasting and inventory optimization solutions have helped thousands of users worldwide, including customers at mid-market enterprises and Fortune 500 companies, such as Otis Elevator, Mitsubishi, Siemens, Disney, FedEx, MARS, and The Home Depot.  Smart Inventory Planning & Optimization gives demand planners the tools to handle sales seasonality, promotions, new and aging products, multi-dimensional hierarchies, and intermittently demanded service parts and capital goods items.  It also provides inventory managers with accurate estimates of the optimal inventory and safety stock required to meet future orders and achieve desired service levels.  Smart Software is headquartered in Belmont, Massachusetts and can be found on the World Wide Web at www.smartcorp.com.


For more information, please contact Smart Software, Inc., Four Hill Road, Belmont, MA 02478.
Phone: 1-800-SMART-99 (800-762-7899); FAX: 1-617-489-2748; E-mail: info@smartcorp.com

Smart Software VP of Research to Present at ISF 2018

Dr. Tom Willemain to lead ISF session on Time Series Dissaggregation

Belmont, Mass., May 14, 2018 – Smart Software, Inc., provider of industry-leading demand forecasting, planning, and inventory optimization solutions, today announced that Tom Willemain, vice president for research, will present at the International Symposium of Forecasting from June 17 – 20 in Boulder, CO.

Dr. Willemain, will present a tutorial on Time Series Dissaggregation and how the approaches he’ll outline can improve the quality of demand forecasts.  Imagine that you must provide daily forecast results but can only obtain historical demand at monthly or weekly levels.   Often times, granular demand data is not available.  How do you proceed?  Converting aggregate quarterly, monthly, or weekly data to daily data is example of the time series dissaggregation problem. Dr. Willemain will discuss current solutions to this problem and press an improved solution.

As the premier, international forecasting conference, the ISF provides the opportunity to interact with the world’s leading forecasting researchers and practitioners. The attendance is large enough so that the best in the field are attracted, yet small enough that you are able to meet and discuss one-on-one. The ISF offers a variety of networking opportunities, through keynote speaker presentations, academic sessions, workshops, meals, and social programs. In addition, representatives of leading publishing, software, and other related companies are on hand to discuss their most recent offerings.

About Dr. Thomas Willemain
Dr. Thomas Reed Willemain served as an Expert Statistical Consultant to the National Security Agency (NSA) at Ft. Meade, MD and as a member of the Adjunct Research Staff at an affiliated think-tank, the Institute for Defense Analyses Center for Computing Sciences (IDA/CCS). He is Professor Emeritus of Industrial and Systems Engineering at Rensselaer Polytechnic Institute, having previously held faculty positions at Harvard’s Kennedy School of Government and Massachusetts Institute of Technology. He is also co-founder and Senior Vice President/Research at Smart Software, Inc. He is a member of the Association of Former Intelligence Officers, the Military Operations Research Society, the American Statistical Association, and several other professional organizations. Willemain received the BSE degree (summa cum laude, Phi Beta Kappa) from Princeton University and the MS and PhD degrees from Massachusetts Institute of Technology. His other books include: Statistical Methods for Planners, Emergency Medical Systems Analysis (with R. C. Larson), and 80 articles in peer-reviewed journals on topics in statistics, operations research, health care and other topics. For more information, email: TomW@SmartCorp.com or visit www.TomWillemain.com.

About Smart Software, Inc.
Founded in 1984, Smart Software, Inc. is a leader in providing businesses with enterprise-wide demand forecasting, planning and inventory optimization solutions.  Smart Software’s demand forecasting and inventory optimization solutions have helped thousands of users worldwide, including customers at mid-market enterprises and Fortune 500 companies, such as Otis Elevator, Mitsubishi, Siemens, Disney, FedEx, MARS, and The Home Depot.  Smart Inventory Planning & Optimization gives demand planners the tools to handle sales seasonality, promotions, new and aging products, multi-dimensional hierarchies, and intermittently demanded service parts and capital goods items.  It also provides inventory managers with accurate estimates of the optimal inventory and safety stock required to meet future orders and achieve desired service levels.  Smart Software is headquartered in Belmont, Massachusetts and can be found at www.smartcorp.com

SmartForecasts is a registered trademark of Smart Software, Inc.  All other trademarks are the property of their respective owners.


For more information, please contact Smart Software, Inc., Four Hill Road, Belmont, MA 02478.
Phone: 1-800-SMART-99 (800-762-7899); FAX: 1-617-489-2748; E-mail: info@smartcorp.com