INDUSTRY

School Supplies Distribution

SOLUTIONS

JustEnough Demand Planning

CHALLENGES

Carolina Pad needed to forecast for seasonal demand, which varies greatly by region or even individual store. Also, the company needed better supply-side planning for its big-box retailer customers, as well as a way to better address extended lead times from overseas producers

RESULTS

Increased ability to provide custom orders leads to increased sales

Decrease in excess stock by 19 percent

Automated component integration of constrained and unconstrained resources

Standardization of demand forecasting

Drastic reductions in forecast time

Increases in forecast accuracy

 

Overview

Many of us have melancholy childhood memories of returning to school at the end of summer. One of the few upsides was heading to school fully stocked with an arsenal of pristine, new school supplies... finely sharpened pencils, stacks of snow-white notebook paper, multi-pocketed notebooks that cracked with that fresh plastic smell when first opened. New school supplies rocked.

 

Today, new school supplies look awesome too – if you buy the ones from Carolina Pad. The 65-year-old company reinvented itself over the last decade by focusing on the design of their products. Bold colors, striking patterns and quality materials have helped make good-looking school supplies a “must have” for the back-to-school season. The move also landed the company prime shelf space with some of the biggest retailers in the country, including Walmart and Target.

Meeting Big-Box Demands

However, with those prime retail spots comes the demands for customization by big-box retailers. There is no room for gaps in supply, especially when it comes to the short shelf-life of seasonal merchandise and when product mixes are specific to each retailer. Carolina Pad faces a much different demand chain dynamic than in the company’s early days, when pencils and paper were sold out of the backs of pickup trucks in North Carolina.

For instance, since Carolina Pad’s overseas vendors have long lead times and are subject to local holidays, customs and regulations, delays can put the company in a holding pattern if they aren’t accounted for within the demand chain. Tie those global issues in with the compressed shelf life of the back-to-school product mix and too much of one pattern or color can quickly result in a severe overstock situation.

Greg Goodman, Carolina Pad’s director of forecasting, for one, doesn’t miss the forecasting practice the company was using when he arrived in 2007.

“Accounting for all these variables meant hours of manual data loading,” Goodman said. “Some retailers may not place their orders until just a few months before the back-to-school (BTS) season. With the long lead times for our overseas manufacturing, spending weeks rolling up forecasts took time we did not have.”

Further complicating matters was that an increasing amount of Carolina Pad’s business in the popular back-to-school season is now shifting to point-of-sale stand-up displays that are often customized for the big box retailer.

Depending on how well those products move, an order may need to be resolved with standard, seasonal orders. With 65 percent of shipments happening in May through July, it was imperative Carolina Pad find a way to link related products and materials together at a group level, rather than working at the item level and manually manipulating data across multiple orders.

“The parent/child relationship in product builds gets very complicated when you add custom displays and seasonal buying cycles to the mix,” Goodman said. “It was mind-numbing. Our previous software made us forecast parent and child relationships separately. If we had 30 display orders, we would need 30 forecasts. And changes to orders already in production were dreaded by everybody.”

That’s when Carolina Pad decided to turn to JustEnough’s Demand Planning solution.

“With JustEnough, we can set the point-of-sale display with a parent relationship and link it to items ordered in order to fill in with child relationships. This all had to be done manually before,” Goodman said. “JustEnough can reallocate existing inventory or recommend buys. It is a feature that has saved us a number of times.”

JustEnough’s Demand Planning Solution also saved their bottom line. Based on Carolina Pad’s calculations, the company has reduced excess inventory 19 percent over the past year.

The folks who designed this software know what we deal with.

Greg Goodman

Director of Forecasting, Carolina Pad
 

Fashion is Fleeting

Today, 35 to 40 percent of Carolina Pad’s product line still consists of everyday items. JustEnough automatically forecasts these predictable items, enabling the company to focus on building its innovative fashion line assortments. For the fashion products, Demand Planning provides the functionality to link one item’s history to another item, so Carolina Pad can apply the data it has on items that are replaced in the product mix to items that fill those gaps. This is critical since their target market is students whose idea of what looks cool can change as quickly as the winds off the Carolina coast.

“We do focus groups,” Goodman explained, “but we never really know how well a design is going to go over until it hits the shelves. If a new design is similar to a previous one, or has had similar feedback from a focus group, being able to apply that item’s history to new products is invaluable in the planning process.”

Feeling the Impact of Limited Planning Functionality

Goodman had a long list of headaches with the solution Carolina Pad had in place when he arrived in 1997. “We were not able to look back to do a rolling 12-month forecast, so that really limited our planning capabilities,” Goodman said. “But it was also the little things that would really take their toll.”

For instance, the earlier solution had dialog boxes that made users scroll through lines of useless information and included steps that would force users to enter zeros.

There was a lack of visual displays of data that made information difficult to interpret.

“Now when we put in a kill date on a product, we know that the system will kill the buy for the components behind it. The folks who designed this software know what we deal with,” he said.

JustEnough’s continued involvement gives us great confidence regarding our ability to grow and meet the demands of our customers.

Staying Profitable, Staying Lean

Demand management for Carolina Pad was not easy with the company’s previous forecasting system, but the company got by because it was not dealing as much with the customized demands of big box retailers. However, had the company stayed with its previous system, meeting those demands would have taken a significant toll on Carolina Pad’s bottom line.

“The classic question in forecasting is, ‘Is this a sales forecast or a production forecast?’” said Goodman.

“The classic answer was always ‘yes.’ Add seasonal and custom products to the mix, and the man hours required to meet our customer requirements would have skyrocketed. Last year we had between 25 and 30 different collections. This year we have more than 80. We are getting more orders, and more orders for custom packaging. With JustEnough, we have been able to maintain the same headcount and still keep our customers coming back for more.”

More Than Just a Software Vendor

Goodman is pleased with the level of continuing involvement he has with the JustEnough team as Carolina Pad grows and uses JustEnough to help manage the increasing demand planning requirements that comes with that growth.

“The people at JustEnough listen,” Goodman said. “They are willing to explore new ideas and add features. There is nothing we have asked them to do they have said ‘no’ to. I consider them partners. Their continued involvement gives us great confidence regarding our ability to grow and meet the demands of our customers.”