COMPANY: Interstate Batteries
WEBSITE: www.interstatebatteries.com
INDUSTRY: Automotive, Retail, Consumer Goods
COMPANY TYPE: Privately Held
JOHN GALT SOLUTION: ForecastX
Company
Interstate Batteries is the leading replacement brand battery in North America. Now over a billion dollar, privately held corporation, Interstate continues to thrive on innovation, as well as good old-fashioned business principles. Interstate Batteries’ products are sold by more than 200,000 dealers and Interstate Batteries’ centers.
Challenge
Prior to John Galt, Interstate Batteries did not produce its own forecast, instead of relying primarily on data from its main supplier. This process provided limited information and clarity for its sales and operations planning. The forecast that was provided to them was derived from a simple historical review of shipments from the supplier to Interstate Batteries. This type of forecast offered limited insight into how the forecast would be consumed by Interstate Batteries’ distributors and dealers. With over 300 distributors within the Interstate Batteries’ system who supply thousands of dealers, this process didn’t provide sufficient insight and ended up causing excesses and shortages in supply.
Solution
In order to improve this process, Interstate Batteries had to start forecasting sales from their distributors to dealers. They also had to start looking at different sales volumes from different retailers. Because of this, they had to bring the forecasting part in house and implement a formal S&OP process. With limited resources, Interstate Batteries needed to find a solution to help them get started. ForecastX from John Galt Solutions fits their needs perfectly. They were already familiar with Excel and using spreadsheets for much of the process. Since ForecastX fits right into Excel, the team was able to get up and running quickly with statistical forecasting far beyond what they were doing before. Plus, the power they were able to get from the tool for the price, made it the best value on the market for their needs. Currently, they utilize a reporting tool to pull sales data from different systems and import it into Excel. From there they run their statistical forecasts with ForecastX, make adjustments and share with their vendors.
Benefits
Interstate Batteries jumpstarted their entire S&OP process with the ForecastX Wizard. ForecastX provides the demand planning team with a statistical baseline with its best-fit algorithm, Procast, that is far superior to what they were working with before. With the new baseline, they can make much more meaningful adjustments and assumptions about future demand. The efficiency of the forecasting process has improved greatly. “Frankly, I was pretty shocked at how well Procast works,” said Tim Leeth, Demand Planning Manager at Interstate Batteries. “I was really impressed with that. It helps us tremendously because we don't have to spend time manually selecting the best statistical model.” The improved forecast accuracy is also recognized by its suppliers. “We have heard from our largest supplier that the forecast is better than it has ever been,” commented Allan Pille, Demand Planning Manager at Interstate Batteries. This improved accuracy means stakeholders across the value chain are finding Interstate Batteries forecasts and demand planning team much more credible. This credibility is leading to improved S&OP across the board.
