Supply Chain Planning Software Helps Increase Operating Margin by 20%
Australian-based STM Brands makes high-quality accessories for tablets, laptops, and phones and markets them globally. They relied heavily on spreadsheets for demand forecasts and planning, but when Ethan Nyholm, President and Co-Founder, started noticing rising air freight costs were cutting deep into his bottom line, he realized that his company needed a much better solution for supply chain planning.
A More Accurate Picture of Demand
Since the company was already using NetSuite ERP, it was critical that the new planning solution easily integrate and be cloud-based. Nyholm discovered DemandCaster supply chain planning software through NetSuite’s application ecosystem, SuiteApp, and was impressed with the solution’s ease of use and rich visual representation of sales data by product, by location, as well as trends associated with those products.
The flexibility to choose various forecasting algorithms combined with powerful visualization enables the STM team to readily see trends and patterns. Decisions about inventory and freight are now made based on data and the insight from that data rather than on educated guesses. This has resulted in a reduction in air freight costs by 50 percent, and decreased overall freight to sales ratio by 25 percent year-over-year.
Data-Driven Inventory Optimization
With DemandCaster, STM can be more proactive with his inventory handling and avoid excess and obsolete stock, which is critical for a company that makes accessory products for technologies that often have short lives. Nyholm also likes the ability to respond faster when big deals hit because the software allows him to plan much more effectively around peaks and valleys. This kind of insight had led to an increase of 20 percent in operating margin.
In the near future, Nyhom plans to build a dashboard to drill down into potential areas of risk and to leverage the integration to NetSuite to more closely track orders and forecasts associated with them. He’s also looking forward to expand his use of the sales and operational planning (S&OP) capabilities which has already improved collaboration between the sales, purchasing, and production teams.
Read the full case study here.
