New Balance: Shoe Fits - ' Statistical Lockdown '
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Statistical Lockdown
So Holland brought in a sales-forecasting application from a small company in
Portland called SRC Software. SRC was founded 20 years
ago by Phil Sandstrom, now the company's chief financial officer and chief systems
architect, and Stephen Reiff, the chief technology officer, out of frustration
with the software tool of the day—the Lotus 1-2-3 spreadsheet. That software
couldn't handle the thousands of records' worth of data, and didn't have the
security that was needed for financial forecasting.
With the SRC system, information about customers can be distilled for each sales
rep from corporate databases. The reps download the information from a secure
Web site as each month ends. Using the data and consulting with customers, each
sales rep updates the forecast of each customer's orders, not just for the rest
of the current year, but for the following year as well. Then, instead of using
a malleable spreadsheet, sales reps enter their revisions in a locked-down template
created by a "master user" such as Holland.
The template makes it easier for the sales rep to fill out required information
and a snap for the system to roll up all the forecasts. If the sales reps send
in their new predictions before the dawn of the first Monday of the month, by
noon Holland can shoot back consolidated reports and breakouts by account and
product.
In early 2001, Holland and Tom Murdock, a manager in New Balance's 30-person
information-technology department, started to depl0y the software with the aid
of an SRC consulting team.
It took only a few days of programming and debugging to get historical data
out of New Balance's general-ledger system in a formatted file. That file could
then be transferred by SRC's software into a Microsoft SQL Server database on
a regular schedule. Meanwhile, Holland went to work building the templates that
sales reps would be asked to fill out.
By the spring of 2001, the system was ready to use. Holland started distributing
software and training the sales force at New Balance's regional sales offices
in April. She did additional training on the software at the company's annual
sales meeting in Acapulco in June. By summer, the forecasts were starting to
roll in.
For the first time, New Balance sales managers could tell which representatives
could best predict orders and could recognize who was responsible for managing
problems with key accounts when they arose.
"We really didn't have any checks and balances before SRC," says Steve Prince,
the West Coast regional sales manager for New Balance. "What SRC has done is
added accountability to everyone's role."
Sales managers review each forecast that comes in, and generate their own "recap"
reports. If orders from an account such as Nordstrom have deviated from the
forecast, it shows up in those reports—and the sales manager can move to
find out why immediately.
Projects: Management 
