InformationWeek
Defining The Business Value Of Technology
January 12, 1998
Stronger Supply Chain
Bedding maker picks Manugistics wares to compleme nt R/3By Tom Stein
"Timing is a critical issue," says Gwen Babcock, VP of IS at Pacific Coast Feather, in Seattle. "Manugistics had the best product. We weren't willing to wait a whole year" for SAP to catch up.
Pacific Coast Feather wants to get a jump on competitors by establishing airtight supply-chain links with its major customers, Babcock says. The company is implementing Manugistics' demand-planning and supply-planning modules to establish a "vendor-managed" in
ventory program with key retailers.
Pacific Coast Feather will use the Manugistics software to forecast product demand and replenish stock at individual stores. For retailers, this removes the headache of having to continually track inventory and reorder products themselves.
Pacific Coast Feather will test the new system next month with Kmart. Each week, the bedding supplier will receive point-of-sale information from all 2,100 Kmart stores. That information will be plugged into the Manugistics sof
tware to help determine future consumer demand and optimal inventory levels.
The system will also produce a plan detailing how many products Pacific Coast Feather should ship to retail stores each week. So instead of customers calling up and placing orders, it will be done automatically by the Manugistics software.
These sales orders are then funneled into the SAP system, which manages the creation of the products, generation of invoices, and shipment of the goods. Both Manugistics and SAP provide out-of-the-box interfaces between their systems, but Babcock says Pacific Coast decided to build its own interface because of the unique requirements of the vendor-managed inventory program.
Babcock insists that big technology investments are essential. "We spent $175,000 just to license the Manugistics software," she says. "Our goal is to be a top-quality company with great customer service. To live up to that promise, we have to have the best systems."
nterprise application supplier SAP will add supply-chain features to its R/3 suite by the summer, but for customers such as Pacific Coast Feather Co., that's not soon enough. The $140 million maker of pillows, comforters, and mattress pads is supplementing its SAP system with supply-chain software from Manugistics Inc.
"For our customers, this means they can make more money by doing business with us," Babcock says. "With the vendor-managed inventory program, we can help them reduce the amount of inventory they have to carry. By replenishing these stores sooner and being more responsive to their needs, they will not get stuck with obsolete inventory."
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