Citizen Watch America made the decision to acquire its first-ever demand-forecasting solution. Glenn Pascrell, senior vice president of merchandise planning, tells how that initiative went, and the benefits that were derived from it.
SCB: What was the supply-chain challenge that you faced at Citizen Watch America?
Pascrell: Primarily it was on the demand-planning side. We had an Excel-based system, and as we grew into other brands and markets, we quickly realized that wasn't going to be enough. So we opened up a process by which to evaluate software providers, and we ended up with Logility.
SCB: Was it your markets or your product mix that was expanding? What kind of change was the company seeing?
Pascrell: It was both, really. We expanded into eco-drive technology. Citizen developed the technology to use any source of light to power its watches, so you never have to replace the battery. That was a premium when we introduced it. Over time we were able to raise our retail prices, and so the business grew by product segment too.
SCB: What was involved in implementation of the initiative?
Pascrell: We bought the software license at the end of 2013, and then in early 2014 we rolled it out and started to implement it. The biggest piece was connecting all of the information sources, mapping the data sources from our ERP [enterprise resource planning] system and point of sale.
SCB: Were you increasing internet sales at the same time?
Pascrell: We’re the number one mid-market brand. We’re in department stores, national jewelry chains, duty free retail, travel retail, and thousands of independent jewelers, so we have a lot of complexity on the customer side. Today we face the challenge of segmentation. The system is helping us do that, because Logility allows you to have a rich data set so you can look at gender, price point, or a customer-specific channel to see where your product's doing well.
SCB: You say you had no demand-planning solution, but you had planners. What did it take to put them into new roles and to train them?
Pascrell: One thing I did right was involve our director before taking the final step into the system. It was nice to see that the whole team wanted to take the leap, that it wasn’t just a top-down decision.
SCB: Did you have any issues in dealing with people who were averse to change?
Pascrell: All the way along, the design was driven through them. We talked a lot of things through each step of the way about how to use the data.
SCB: How long did implementation take? Has it been completed, or is it still underway?
Pascrell: Initial implementation took three to six months. We’re now looking to expand the solution to other brands on the Bulova side, and also to Canada and Mexico.
SCB: What benefits have you realized to date from the initiative?
Pascrell: We have a full sales and operations planning (S&OP) process today. That wouldn't be possible without Logility. It means we focus on forecast reconciliation. We have reconciliation meetings with each national account manager in the field. It culminates in an S&OP meeting at the end of the month with the executive group.
SCB: You had no formal S&OP function prior to implementation of this solution?
Pascrell: Not a formal one. We had conversations about reconciliation and how far away we were from the sales plan, and how we get closer to a realistic number. But we do it in a way that honors the mix of the business, and the sales initiatives that are going on in the company.
SCB: Are you experiencing visible improvement in your forecasting accuracy?
Pascrell: Yes. In addition to accuracy, we're more involved in the sale and product-development group than we've ever been. We’re trying to take advantage of opportunities through segmentation, giving customers what they want in the channel we're selling to,. A system like Logility helps us parse what's important data, and what's not important.
SCB: Do you have a timetable for expanding this to the other parts of the company, the other brands?
Pascrell: We do. We're looking at expanding it to our sister brand, Bulova. We’re also considering a hosted solution from Logility. Like many software providers, they have a software-as-a-service solution, which is much more amenable to chief technology officers.
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