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.
The 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.”
