How customer service levels were improved in a strongly cyclical business
An excellent relationship with our clients is a top priority at iM3L. This case study from our work with Hozelock starts back in 2002 when they wanted to improve service levels to their customers. Hozelock work in the demanding DIY retail sector, and wanted to reduce lost business and improve the seasonal planning process.
- Hozelock were a mature MRP user with an established system.
- Lean/agile manufacturing techniques were established but the service levels still needed improvement.
- Forecast was owned by the sales function, the quality was unreliable with little focus on manufacturing planning.
- The planners were using arbitrary parameters policies and did not believe the forecast from sales.
Supply / demand planning was not fully synchronised with significant manual progressing activities.
- The As-Is business processes was mapped and breakages identified:
- The safety stock policies were causing visibility and capacity issues.
- MRP cycle alignment to customer demand cycles was evaluated & key weaknesses identified.
- MRP seasonal planning process weaknesses were identified and understood.
- A detailed analysis of seasonal demand patterns based on 3-years history helped balance the distribution of the safety stocks.
- A re-evaluation of safety stock techniques using k-curve methodology improves visibility and capacity utilisation.
- The development and implementation of a new monthly stock planning process improved the overall stock effectiveness.
- Forecast ownership moved to operations with more focus on quality and balancing customer demands with manufacturing.
Summary of benefits to date
- Significant and sustained reduction in lost business.
- Improved visibility of demand in the seasonal cycle resulting in better utilisation of stock and improved capacity planning.
- Continuous evaluation and adjustment of safety stock parameters to minimise end of season stocks.
- Higher MRP compliance which means that the business can focus on detail manual planning of the “A” Class stock parts.
- A believable forecast with improved information flow between Hozelock and key customers.
- A continuous improvement philosophy in the supply / demand planning processes.