At Day-Timers Inc., maintaining proper inventory levels is critical to the success of the business. A dated time management product can be a valuable resource one day and fodder for the recycling bin the next. The company needed a robust demand forecasting and management solution to help it make sure the right products in the right quantities were on the shelves precisely when customers wanted them.
That's why the company teamed with Demand Management Inc. In the five years since Day-Timers began using Demand Solutions Forecast Management (DS FM), Requirements Planning (DS RP) and Electronic Demand Solutions Interface (EDSI), the company has reduced its inventory requirements by 50 percent, says Steven Blasek, senior customer inventory manager for the East Texas, Penn.-based subsidiary of ACCO Brands Corp. Customer service has improved from near 70 percent to high in the 90 percent range, and forecast accuracy has improved from about 50 percent to more than 90 percent.
"Dated products have low inventory turns, but you have to have inventory in the store at all times," says Blasek, who joined Day-Timers six years ago to help with the DS implementation and also to manage the company's growing VMI business.
"Because our forecast accuracy is so much higher, we've reduced obsolescence significantly, both with direct sales and through stores," says Blasek. "At the end of their
lifecycle, calendars have little value. There is little demand for a 2007 calendar in December of 2007."
EDSI is especially valuable for Day-Timers in its relationships with office supply superstores Office Depot, Staples and OfficeMax and some of its larger commercial accounts. Product activity data (EDI 852 transactions) that include on-hand, on-order and point-of-sale information for each item for each store is transmitted to Day-Timers on a regular basis, comprising more than a million pieces of information a month. EDSI accumulates the data for use in the forecasting and requirements planning software to allow Day-Timers an accurate view of products in the pipeline and make adjustments as necessary. Sixty percent of its product is manufactured domestically; the remainder is sourced from outside manufacturers. Lead times for sourced products can be 12 to 20 weeks, depending on materials, so it's critical that the company orders just what's needed.
Day-Timers also places products on consignment with some of its customers. Because the company is responsible for the inventory until it sells, the application allows Day-Timers to keep close tabs on inventory levels and to watch out for product obsolescence.
"The first year we went to a consignment model with co-managed inventory for one of our office store partners, we increased sales by 26 percent," says Blasek. The previously-used mainframe-based forecasting tool didn't fit the overall operating philosophy of its parent company.
"Like food, our product has a shelf life," says Blasek. "There's a high seasonality because we sell time-driven products. We change our products frequently. On the catalog side of the business, the life cycles can vary between six months and 18 months."
The company needed an application that worked well given the high seasonality and ever-changing lineup of products in the Day-Timers portfolio, and Demand Solutions addresses the company's needs well. Accurate forecasting and requirements planning don't occur in a vacuum. Blasek says that Day-Timers speaks with its major vendor partners on a weekly basis to help the company get a further glimpse into the market. If a retailer is preparing for a sale that features Day-Timers products, the company wants to know as far in advance as possible to aid in the planning effort. If a sale will be accompanied by sales fliers or advertising inserts, Day-Timers also wants to know exactly where its products will appear, since their placement within the ad will affect sales.
"Retailers see their sales rates daily, but we see them weekly," says Blasek. "If they can give us a heads-up on advertising, it helps us with future planning. Through our experience with these customers we have a good feel for sales based on where the ad is placed."
To put any forecasting, planning or EDI tool to good use, a company needs to find a vendor in its niche and be willing to work through implementation. For Day-Timers, Demand Solutions isn't merely a software vendor but a valued partner it can count on for help in dealing with the challenges of the business world. Blasek says the DS software is easy to install (in fact, he installed it himself) and easy to use. With the help of the Demand Solutions staff, Day-Timers conducted all its training in-house.
"You need cooperation, and you need to be partners together," says Blasek. "There needs to be trust between you and your partner, and that's what we have with Demand Solutions."