October 2008 | Case Studies | DC Solutions

Making a Commitment To Supply Chain Quality

Tags: Warehousing

Wedding jewelry manufacturer Benchmark ties the knot with a software tool that marries forecasting and inventory control.

When couples get engaged, a long, involved process of determining countless details begins. From the wedding date to the bridal gown to the honeymoon, couples have many important decisions to make.

For the past 30-plus years, Benchmark, a Tuscaloosa, Ala.-based ring manufacturer, has helped decide which wedding bands couples will exchange at the altar.

Benchmark operates an 110,000-square-foot facility divided evenly between production and distribution. The company, which sells its rings to retailers and major chains throughout the United States, has been situated in the facility for nearly its entire history.

Until recently, Benchmark drove all operations with an in-house enterprise resource planning system developed several years ago by its own IT department.

While the system was adequate, Benchmark needed to leverage additional technology to better manage its inventory and planning processes, and get rising inventory and transportation costs under control.

After deciding to improve these areas, Benchmark began a search for the right technology to take its operations to the next level. It found its solution in Wilmington, Del.-based Lead Time Technology's (LTT) Fast Forward advanced planning and optimization tools suite.

A Fitting Solution

The unique challenges of the jewelry industry dictated Benchmark's selection.

"We use very expensive raw materials with long lead times," says A.J. Tosyali, president. "It's critical that we have accurate, on-spot forecasting. We could achieve that through new technology."

Benchmark sources raw materials from mines based both in the United States and abroad. Lead times for materials such as diamonds, gold, and precious metals may run as long as two weeks. The raw materials are not only expensive, but they pose the additional challenge of having constantly changing valuations.

"Because the costs of our raw materials fluctuate, we have to monitor our inventory and operating expenses closely," says Tosyali.

The lack of accurate forecasting tools resulted in a costly side effect: poor inventory control.

Another issue that Benchmark faced was that its five product managers lacked insight into the materials and inventory that was related to them. Instead, one person oversaw planning for all 5,000 of Benchmark's SKUs. That one person was overextended.

"He couldn't break out different product categories, which made planning difficult," Tosyali says.

Searching for the Perfect Fit

Benchmark began the search for a product that could provide supply chain optimization.

"We went through many software demos," says Tosyali. "We also supplied data to prospective vendors to see what kind of forecasts they could offer us."

"It helped that Benchmark's representatives approached us with specific company requirements in mind," says Doug MacLean, vice president at LTT. "They're forward thinking and understand the concepts of demand and forecasting. They were looking for ways to improve operations and optimize costs."

Benchmark was equally impressed with LTT. "We liked that they were able to customize the system to our needs," Tosyali says. "And they were able to implement rapidly."

The LTT system also had the level of detail Benchmark needed. "The software can account down to 20 layers of raw materials," Tosyali explains. "Based on lead times, we can set up production and shipping parameters to the item level."

The Software at Work

Benchmark included its staff in every step of the implementation process, which helped improve employee buy-in.

"They were part of the process," says Tosyali. "Any time we met with the key people at LTT, our employees were there. It made for an easy transition."

The implementation process took only about 40 days. "It helped that we have our own IT group," says Tosyali. "We were able to push our data to LTT quickly so that they could get started right away."

Now each of Benchmark's production managers receives details on the pricing and schedules of the exact raw materials used with their products. With that information in hand, they can set up detailed production and distribution plans for their products.

Once Benchmark receives its materials, it can begin production immediately. "We can also plan our calendar and accommodate rush items as needed," says Tosyali. "The system is intelligent and can account for data accordingly."

Fast Forward is designed to help companies reduce and right-size inventory, improve forecast accuracy and service, optimize production resources, and reduce cycle time across the supply chain.

The product particularly appeals to small and mid-sized manufacturers, which made Benchmark a perfect candidate. LTT customized Benchmark's software package to include specific sales data and material levels.

"This data allows us to account for every bit of material associated with our products," explains Tosyali.

"The forecasting tools also give us the ability to plan production and distribution of new items, something we couldn't do before," he adds.

Fast Forward simplified and automated daily decision making for Benchmark. The process improvement best practices are based on lean and Six Sigma principles.

Among the benefits and goals are: anticipating orders to improve customer service; reducing inventory; and improving data visibility across the supply chain.

Fast Forward also provides daily make/move recommendations based on available inventory, forecasts, and orders.

Benchmark is enjoying the benefits of the new system, including detailed inventory graphs.

For each SKU, Fast Forward displays information such as the dependant demand, booked orders, scheduled production, recommended production, inventory specifics, and bill of materials details.

"We are able to see information in many different ways," says Tosyali. "That has allowed us to bring supply chain issues to the surface and make improvements."

Those improvements include reduced inventory and a better turn rate. "Our return on asset has grown as well," Tosyali notes. "In the jewelry business, the asset is critical."

With Fast Forward in place, Benchmark vows to continue setting the standard for supply chain excellence in the highly competitive jewelry industry.