Company Overview:
- EKF is a manufacturer of low-voltage electrical equipment.
- Over 17,000 product items.
- 234 distributors and 6,000 sub-dealers.
- 5 logistics centers.
- 21 years in the market.
- Products supplied to 20 countries.
Supply Planning Challenges
The company faces long lead times for component supplies (120-180 days). The key challenge during the implementation of Forecast NOW! was to enable strategic inventory planning for extended periods. The company typically plans orders about a year to 18 months in advance.
Solution Selection
"Based on a recommendation from one of our clients, Toledo JSC (see case description), we looked into Forecast NOW!. We decided to explore the system, learn about its features, and ordered an Efficiency Insight Assessment. The results showed good indicators, leading us to decide on its implementation," says the Head of Analytics and Pricing at EKF.
Before implementation, the company used its own order calculation scheme based on Excel and partial process automation. While the calculation results were satisfactory, the existing system was cumbersome as it was broken down into numerous separate elements.
"What we liked about Forecast NOW! was the high accuracy of calculations, the presence of all the necessary tools in a single product, and yet a very straightforward and easy-to-understand interface," states the Head of Analytics and Pricing at EKF.
Implementation Process
The migration to Forecast NOW! from the existing workflow was gradual. Starting from February 2019, after the software installation, company employees underwent training. Following that, the testing phase of the system's operation began and lasted until June 2020.. During this period, the company experimented with calculations, adjusted various system parameters, and evaluated the results.
"The main problem we faced during the implementation was the need for long-term calculations. We manage a very large volume of orders for a year to 18 months in advance, which brings certain complexities. Accuracy is crucial here, and the cost of error is significant," says Sergey Fetisov, the Logistics Director at EKF.
"The specific nature of inventory management in the company involves long supply lead times and the key task is strategic planning for the future. Therefore, the implementation, parameter setting, and testing took longer than usual. The task is non-trivial and requires complex calculations," comments the Head of Implementation at Forecast NOW!.
The first orders through Forecast NOW! were initiated in June. Initially, products with short supply lead times were transitioned to the new software. By the end of the fall, the entire product range had been integrated.
Implementation benefits
By March 2020, we observed the following results:
- Inventory turnover period in the warehouse reduced by 10%.
- Automation of calculations increased employee productivity. Previously, employees were involved throughout the entire order calculation and approval cycle. Now, much of this process is automated, freeing them to handle other tasks concurrently. Given the company's specific operations, the full cycle can take around a week.
- Inventory balancing time reduced from 2-3 days to 4 hours.
"We're pleased with the software's performance. Its interface is intuitive and user-friendly, boasting a range of smart configurations. We've faced no significant challenges using it. As for technical support, the Forecast NOW! team delivers top-tier service; I'd rate them a solid five out of five. We've engaged with various software vendors, so we have a broad basis for comparison," says the Director of Logistics at EKF.
