Method Cleans House with 23% Inventory Reduction

  • www.MethodHome.com
  • SysPro
  • Consumer Goods

Method Home is a top innovator in household cleaning products. Since 2000, Method has led the way in evolving the household cleaner from a toxic object that hid under the sink to an all-natural, biodegradable, and stylish counter-top accessory. Today, Method offers a complete line of household cleaning products sold via retailers like Target, Office Depot, Lowe’s, CVS, Food Lion and Amazon.com.

Method’s products have been cited as industry leaders by publications such as SimpleHome, Time, Vanity Fair, Family Circle, Women’s Health and others. Method has achieved hyper-growth since its founding, and was named one of the 50 most innovative companies in 2008 by Fast Company. It is a privately held company based in San Francisco with private equity backing, and has attracted a very strong Board of Directors including Tim Koogle, former CEO of Yahoo!, who serves as Chairman.

In early 2008, Method executives realized they had outgrown forecasting using basic spreadsheets. A more sophisticated forecasting approach was required to automate the collection of data from additional stakeholders — including remote sales directors — in the forecasting process. The demand planning solution would have to handle the company’s rapid growth as well as the ongoing introduction of new products.

Method reviewed many popular demand planning solutions. Critical factors considered during their evaluation included: ease of use, ability to scale the solution with business growth, integration with existing systems and total cost. It was also imperative to find a solution that could be managed by the demand planning team and would not require substantial IT resources.

In the fall of 2008, Method Home began using John Galt’s Atlas Planning solution to create a more consumer driven supply chain. They selected Atlas Planning due to its ease of implementation and ability to scale with their rapid business growth. Now they have increased visibility across all parties involved in the forecasting process. Their remote sales directors can even provide forecast updates online.

With improved forecast accuracy and SKU rationalization, Method has reduced their inventory investment by 23.5% while maintaining service level goals of a 98% fill rate and 98% on time delivery. And their forecast accuracy on their top 30 SKUs has improved by 5%.

Both the demand planning information and process are more manageable now. Atlas has enabled demand planners to ask more strategic questions of sales directors. Everyone benefits since forecasting takes less time for the sales directors who now have more time for selling in the field. Method is leveraging improved forecast accuracy, better inventory management and more efficient supply chain performance to grab market share from more established competitors.