Refining inventory management and forecast accuracy
In the competitive world of wholesale distribution, managing inventory efficiently while ensuring forecast accuracy can be the difference between success and stagnation.
Specialty Bolt & Screw (SBS), a leading U.S. distributor in the fastener industry, faced these very challenges. SBS was founded in Massachusetts in 1977 and employs over 200 people across their global locations. They also work with several key manufacturing partners across locations in Asia, Europe, and North and Central America to provide high-quality fasteners for several industries, including the outdoor recreational vehicle marketplace.
A comprehensive supply chain transformation
With over 15,000 SKUs and a global supply chain, the wholesaler faced challenges with excessive inventory and low forecast accuracy. The company’s leadership team recognized the need for an advanced supply chain planning solution that could streamline operations and enhance efficiency. After a thorough evaluation process, involving 10 solutions, SBS selected RELEX in April 2022 to enhance their forecasting, distribution, production, and purchase planning systems. The decision was influenced by the system’s intuitive user interface, easy customization capabilities, and notably, the strength of the RELEX implementation team.
The project kicked off in May 2022, with a clear set of goals: reduce inventory, improve forecast accuracy, automate processes, and ensure ease of use. The implementation began with three customers and, following successful initial outcomes, expanded further. An iterative approach characterized by weekly meetings and testing activities facilitated a smooth transition from the old system to their new global planning framework.
Operational excellence and financial health: The impact of RELEX
SBS has achieved significant improvements in supply chain management by implementing RELEX, transitioning from a centralized planning system to a global planning organization. This placed planning operations closer to their key markets in Mexico and Taiwan, involving a small team of planners located across the U.S., Mexico, and Taiwan.
The integration of RELEX with SBS’s existing ERP systems facilitates the management of purchase, distribution, and production orders, leading to a notable 15% reduction in planners’ workload. This enhancement has bolstered their overall efficiency and allowed for the daily updating of supply chain plans, improving SBS’s responsiveness to market dynamics.
The implementation of advanced forecasting solutions that combine data with customer insights has significantly enhanced the accuracy of demand predictions. This capability allows SBS to finely tune their inventory strategies to better align with actual market demands. As a result, SBS has seen a substantial 29% reduction in inventory levels, yielding significant savings in working capital. This reduction has notably enabled SBS to decrease borrowing costs, further improving the company’s financial health.
Additionally, RELEX has automated the monthly recalibration of safety stock levels and item classifications, improving inventory management over the previous manual, annual updates. Dashboard views have increased operational flexibility, enabling SBS to proactively manage high-value purchase orders and assess shortage risks with what-if scenarios. This proactive approach helps avoid potential disruptions, ensuring a smoother operational flow.
The comprehensive scope of the system’s capabilities supports extensive planning requirements across all 20 SBS locations, managing 6,200 items and coordinating with over 250 suppliers. This demonstrates the system’s scalability and effectiveness in handling complex supply chain challenges.
The adoption of the RELEX platform by approximately 60% of SBS’s customers reflects not only a successful integration but also indicates a positive impact on customer relations and satisfaction. The shortage reporting in RELEX helps the planning team better identify shortages in advance, leading to much fewer surprise outages.
“The implementation of RELEX has been a game-changer for us at SBS. It’s not just about the technology; it’s about how it has transformed our approach to supply chain management. The ability to dynamically adjust our inventory and forecasting in real-time has set a new standard for operational excellence within our organization,” said Matt Larsson, VP of Supply Chain Operations at SBS. “Most critically, it has led to a significant reduction in our working capital requirements. This scalable solution allows us to expand our customer implementations efficiently, further enabling our global planning team to operate seamlessly across all our locations.”
RELEX supports SBS’s strategic budgeting by providing precise future inventory and revenue projections by customer and location, aiding their teams in making informed financial planning decisions. The ability to forecast revenue and inventory projections 12 months out has been instrumental in facilitating working capital planning.