Hitting the LimitBy Larry Barrett | Posted 2003-11-01 Print
New Balance had nearly faded into irrelevance six years ago. Then, accurately forecasting demand for its shoes became a sport for the entire company and its retailing partners. Now it's making up ground quickly, in its footrace with Nike.Hitting the Limit
To jump-start that accountability, Holland brought Kris Vandemore, the sales coordinator for the West Coast office, along with her to the SRC users conference in Anaheim that February. She then guided Vandemore through the process of building reports in SRC's software.
But there was a major hurdle to giving Vandemore and other employees in remote offices full access to the data in SRCbandwidth. The SRC server for sales forecasting was located in the Boston headquarters, and SRC's client software used to create reports requires a direct connection to that database. That made using the software over the wide-area network connection back to Boston painfully slow from Vandemore's California office.
To solve the problem, Holland made the client software available through a Citrix terminal server. That allowed remote employees to build their own reports from the forecast data on a computer with a high-speed connection to the database and SRC application server; they could then send workbooks based on those report formats to the regional sales managers and others by e-mail.
Lack of bandwidth created other problems. Typically, sales reps were being sent three forecasts to updateone for major accounts, one for small retailers and one for New Balance company stores in their territories. To help prepare the forecasts, 15 megabytes of data were being sent out to each sales rep.
That exceeded the limits set in New Balance's e-mail system for the amount of data that could be sent in and out of each mailbox. Holland was affected, too. As she started to send out the files to more and more salespeople, she exceeded the storage quota of her e-mail account.
Meanwhile, the sales reps were going nuts. They had slow connections. "I would e-mail these workbooks as attachments to salespeople," she says, "and they would just clog up their e-mail. They might be trying to send out an order, might be trying to get through to a customer, and they would freak out because it took an hour to download their mail."
SRC solved the problem with a Web check-out system. Sales reps now download forecast workbooks at their convenience. When they're ready to report in, reps check off the forecasts that have been completed, and the correct workbook files are automatically uploaded for collection, slicing and dicing by "master users" such as Holland and Vandemore.
The result is a much more accurate picture each month of what New Balance's future looks like. Since New Balance has a six-month lead time for delivery from its factories and overseas suppliers, shaving a month from the time it takes to react to changing customer sentiment is huge. Sean O'Brien, product manager for New Balance's cross trainer, basketball and tennis lines, estimates that he's been able to improve his capacity planning by 25%.
That translates to more efficient production. Sales-planning chief Stan Mescon says that since the implementation of SRC the number of shoes left in inventory when New Balance discontinues a style has dropped on average by about 8%.
It also means New Balance can react more quickly to retailers' needs, a quality that chains such as Foot Locker and The Sports Authority say has been the single-largest reason it has been taking market share from Nike.
New Balance's ability to ship orders to its retailers, on time and complete, has "gone up between 5% and 10%" per retailer, says Mescon. That means fewer back orders, a smoother management of inventory by retailers, and more shoes on customers' feet.
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