Red Wing Shoe Co. has been manufacturing outdoor and work shoes and boots in the U.S. since 1905. It currently has two U.S. factories, in Minnesota and Missouri, and sources products throughout the world.
In 2008, the company hired Stephanie Grothe to re-implement and execute a sales and operations process at the company.
“At the time no one owned the S&OP process, so we really had to get our executives on board and get their buy in,” says Grothe, who is supply chain process improvement manager at the company. “We knew that if we didn’t have executive support we would not get the help and resources we needed to drive the project.”
A new process urgently was needed because the company was drowning in data, Grothe says. “Our spreadsheets were running 400-plus pages,” she says. “It just wasn’t manageable anymore.”
After working internally to determine specific needs and externally to investigate technology vendors, Red Wing implemented the Logility Voyager demand planning solution. “Logility had everything we needed and was something we could grow into,” says Grothe. “We wanted a solution that would help us improve the efficiency of S&OP and help us build better safety stock methods to reduce inventory and save money. Logility did all that and more.” In addition to demand planning, Red Wing also uses Voyager applications for inventory planning and replenishment planning, “so Logility is driving our entire supply chain,” Grothe says.
With a solution in place, the company introduced a streamlined sales and operations process that cut planning time from six weeks to three. Additionally, inventory was reduced by 27 percent. “That reduction came from making changes to our safety stocks and improving systems,” says Grothe.
The S&OP process at Red Wing is driven by the company’s monthly fiscal calendar, she says. “We meet once a month. The first week, demand planners forecast the products and get the sign-off of general managers. We also have an extra step to get our executive team to sign off,” she says. “By the following Tuesday, the forecast is passed over to the supply chain and we meet and discuss capacity plans for both warehousing and manufacturing, in the U.S. and globally. From there we take it back and vet through any capacity constraints we may have and send it on for executive review.”
For companies starting on a similar journey, Grothe recommends having an S&OP process in place before adding a demand planning tool. “If you don’t have steps and procedures and processes in place before you implement the tool, you will likely fail,” she says. “Also, make sure you have people dedicated to S&OP,” she says. “If it is a part-time job, or if you don’t have executive buy-in, it’s not going to work.”
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