Method Home Reduces Inventory Spend by 23% with Cross-functional Collaboration
COMPANY: Method Home Corporation
INDUSTRY: Consumer Goods
COMPANY TYPE: Privately Held
JOHN GALT SOLUTION: Atlas Planning Suite
- Reduced inventory investment by 23.5% while maintaining service levels
- Improved forecast accuracy by 5% on top 30 SKUs
- Automated planning process and minimized human error
- Won “SDCE Green Supply Chain Award” for the new and improved supply chain
Method Home is the world’s largest green cleaning products company by sales. Method manufactures and sells naturally-derived, biodegradable, non-toxic household cleaners, laundry supplies, personal care, and soap products with a focus on minimalistic product design. The company prides itself on a highly effective supply chain, ethical sourcing, green manufacturing, and efficient distribution. This supply chain strategy extends to suppliers, who are held to the same high standards.
A green and sustainable supply chain is key to Method’s brand and overall business strategy. However, after huge success and exponential growth in its first five years of business, Method Home started experiencing the challenges of a mature multinational company. Incorporating input from the sales team became increasingly difficult and time consuming, making it hard for the demand planners to establish an accurate baseline forecast and maintain a lean supply chain. Planners and the sales team used Excel spreadsheets distributed via email to collect and analyze information. As Method grew it found itself with an inefficient planning process. Analysts spent time maintaining and cleaning data rather than analyzing it to drive better business decision. Spreadsheets flawed with human error caused the forecast accuracy to drop, causing more production waste and inefficient distribution. Method Home’s green image was at stake.
Method executives soon 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 Home recognized that an integrated demand and supply plan was critical to its long-term success. To enable its process changes, Method Home sought a system that would allow the whole organization to seamlessly contribute to the planning process. The business needed a solution flexible enough to continuously adapt to account for its rapid business growth.
Method reviewed many popular demand planning solutions. Critical factors considered during 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.
Method selected Atlas Planning due to its ease of implementation and ability to scale with rapid business growth. Atlas was fully implemented in under six months and the Method team could begin building a consumer-driven supply chain.
Method Home now enjoys increased visibility across all parties involved in the forecasting process. The Atlas Planning Portal enables the planning team to efficiently and effortlessly collect input from the sales, marketing, and finance teams allowing for a strong consensus forecast, improved forecast accuracy, and SKU rationalization. The Planning Portal also reduced the workload for the sales directors, increasing their willingness to contribute to the forecast while letting them allocate more time for selling in the field. With Atlas doing the heavy lifting, demand planners and sales directors now have time to discuss strategic questions.
Method Home reduced its inventory investment by 23.5% while maintaining service level goals of a 98% fill rate and 98% on-time delivery. Forecast accuracy increased across all products, where the top-30 SKUs alone improved by 5%.
With improved forecast accuracy, better inventory management, and more efficient supply chain performance, Method then immediately grew the business and grabbed market share from more established competitors.
“Implementing the Planning Portal and being able to efficiently collect input from the sales team were big game changers for our planning process.”
Keith Diehl, Director of S&OP