Bolting Ahead: Specialty Bolt & Screw Tightens its Supply Chain

THE CUSTOMER

Founded in Massachusetts in 1977, Specialty Bolt & Screw Inc. is a leading U.S. distributor in the fastener industry. It also works with 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.

THE PROVIDER

RELEX Solutions’ unified platform provides one source of data and visibility to help retailers, wholesale companies, and consumer packaged goods manufacturers align and optimize demand, merchandise, supply chain, and operations planning across the end-to-end value chain.

To improve inventory management, SBS partnered with RELEX Solutions, which offers supply chain planning and other solutions. Its platform provides a single source of data and visibility to help companies align and optimize demand, merchandise, supply chain, and operations planning.

“We are a business-to-business distributor of fasteners and other small parts, such as screws, bolts, and rivets,” says Matthew Larsson, vice president of supply chain operations with the Agawam, Massachusetts-based company.

Adding Value With Logistics

SBS adds value by managing these SKUs for its clients. While the products tend to be small, clients typically order them in large volumes and require timely deliveries to ensure their operations aren’t interrupted.

“SBS handles sourcing, planning, and logistics,” Larsson says.

SBS delivers the products, often just-in-time, to its customers. In many cases, clients receive their orders within three hours of placing them. “For most of our customers, it’s critical that we don’t shut down their production lines by being late,” Larsson says.

With automotive customers, for instance, shutting down a production line would mean idling workers and potentially causing the supplier to miss orders. As a result, automotive customers may impose penalties when orders are late.

In addition, many of SBS’s customers maintain a low inventory of the parts that SBS supplies. While this helps to keep their working capital requirements low, it adds to the urgency of timely deliveries.

SBS had been relying on a homegrown, manual planning system that no longer sufficed. Among other shortcomings, planners had to search for information and complete manual calculations before they could determine what to order.

“Planners spent a lot of time on non-value-add activities, such as manually typing data into the ERP system,” Larsson recalls.

Not only did these tasks consume time, but because the system was difficult to use and failed to quickly capture changes in demand, SBS often held more inventory than was optimal, if customers lowered their estimates.

Some customers’ long-term forecasts start out high; they then lower their estimates as the dates grow closer. “In the past, we didn’t have a way to analyze and massage that forecast and make it more realistic, so we would buy to the higher forecast,” Larsson says.

Adding to the complexity, SBS obtains much of its inventory from Asia. This can mean a manufacturing lead time of three to five months, along with at least two months in transit. By ordering so far out, SBS could be overstocked on some products.

At the same time, an unexpected spike in demand could lead to shortages. Because the previous system wouldn’t always capture the change quickly, planners often were unable to adjust their orders. Instead, SBS spent money expediting shipments to ensure it met its commitments to customers.

“We needed more than a step change; we wanted a game changer,” Larsson says. He and his team researched and engaged in calls and demos with about 10 providers of demand and supply planning systems.

Relying on RELEX

By integrating advanced forecasting solutions with customer insights, SBS has dramatically improved demand prediction accuracy. This enables the company to optimize inventory strategies, ensuring it meets real market needs with precision.

RELEX Solutions—the name combines “retail” and “excellence”—quickly rose to the top. Among other key qualities, the RELEX platform has the ability to handle large numbers of inventory items and multiple locations.

The RELEX system can provide both item-level details, as well as aggregate reporting on, for instance, total inventory projections heading into the new year. The ability to customize the RELEX solution also appealed. “They could customize more or less anything we asked for when it was needed,” Larsson says.

The implementation of the RELEX platform kicked off in May 2022. SBS’s primary goals were to reduce inventory levels, boost forecast accuracy, and automate processes.

RELEX Solutions offers a supply chain and retail planning platform that leverages data to provide insight that can help supply chain organizations ensure product availability, reduce excess stock, and boost efficiency.

The system can create a digital twin, or virtual model, of a company’s physical supply chain, incorporating information on suppliers and other business partners, as well as manufacturing and distribution points. Companies can run advanced scenarios to gain visibility into their operations today, as well as into the future.

While users access these capabilities through a unified platform, they can also be delivered modularly, says Madhav Durbha, group vice president, consumer product goods and manufacturing. A company can activate each module as it makes sense for its operations.

Illuminating the Supply Chain

The unified platform is key, given a common challenge in boosting supply chain effectiveness: the silos that form within organizations. For example, despite everyone’s best intentions, the data associated with the logistics, manufacturing or procurement functions tends to remain separate, Durbha says.

RELEX can bring that information together, connecting the data points to illuminate the end-to-end supply chain. “Users suddenly have visibility into things that they did not know before,” Durbha says.

Reduce Inventory, Boost Accuracy

The implementation of the RELEX platform kicked off in May 2022. SBS’s primary goals were to reduce inventory levels, boost forecast accuracy, and automate processes.

Within SBS, two planners allocated about 40% of their time to the implementation, while an IT employee was dedicated about 80% to the project.

One critical activity was understanding the data needed by the planning system and then pulling it from the ERP system. That required a fair amount of work and an iterative approach to get it right.

For example, while orders from some countries in Asia ship once per week, orders from China are consolidated and typically ship once per month, Larsson says. SBS needed to include the varying shipment dates within the RELEX platform.

Similarly, supplier lead times also varied, often depending on the region of the world from which they were coming. Initially, SBS didn’t have these data points in anything other than disparate work documents, Larsson says. He and his team exported this data into the RELEX platform.

Given employees’ other responsibilities, and to avoid excessive risk, SBS launched the RELEX solution with just one customer. When that proved successful, it added two others, whose business models contain different types of complexity.

By December 2022, SBS’s first three customers, representing about 40% of the company’s business, were live. SBS has since moved about 75% of its customer base, by revenue, to the RELEX platform.

Many customers who aren’t yet on the system are smaller, and it may not be worth the work required to add them to the solution, Larsson says. As a result, it’s likely a small portion of SBS’s client base will remain outside the RELEX system.

At the outset, the RELEX team spent time on site with SBS, gathering requirements and gaining an understanding of the company’s business processes today and into the future, Madhav says. After that, much of the implementation work happened remotely. Implementation time for many projects similar to the SBS project takes about six months.

The RELEX solution supports SBS’s planning requirements across all its locations. About 60% of SBS’s customers use the RELEX platform to submit distribution, purchase, and production orders.

Since implementing the solution, SBS has significantly improved its supply chain management, Larsson says. Among other changes, it has been able to place planning operations closer to key markets, such as Mexico and Taiwan.

Integrating RELEX with SBS’s existing ERP systems facilitates the management of purchase, distribution, and production orders. “We freed up almost one day per week per planner from data entry,” Larsson says.

Now, if the RELEX platform provides a purchasing or distribution recommendation, the information feeds directly into the ERP system, and the planner no longer has to manually enter it. Planners can complete more frequent updates to SBS’s supply chain plans, boosting their ability to quickly respond to market changes.

Because the RELEX solution provides more timely notices of any shipment shortages, SBS has been able to cut its use of expedited shipping. “If you have one month to come up with an alternate plan, then it’s very doable,” Larsson says. “If you have to figure out an issue in two days, then it’s usually very expensive to fix it.”

Informed Decisions

By providing inventory and revenue projections by customer and location, RELEX helps SBS make informed budgeting and planning decisions. Through more accurate supply and demand planning, SBS has been able to cut inventory by about 29%.

“The RELEX solution has been a critical change for us from a working capital standpoint,” Larsson says.

Streamline Inventory, Free Up Capital

The Challenge

With more than 15,000 SKUs and a global supply chain, SBS faced challenges with excessive inventory and low forecast accuracy. The wholesaler’s previous inventory management and forecast solutions weren’t able to provide timely, efficient, and accurate inventory management and forecast functions. This often resulted in inventory levels that were higher than necessary, which  cut into working capital.

The Solution

Partner with RELEX Solutions and implement its unified supply chain and retail planning platform. The project kicked off with a clear set of goals: reduce inventory, improve forecast accuracy, automate processes, and ensure ease of use.

The Results

More informed supply and demand planning has helped cut inventory levels by about 29%, freeing working capital. Automation has reduced planners’ workload by about 15% each, enabling them to more quickly adjust to market changes.