Grimco & GAINS a Model for Efficiency
Matt Luther, Director of Supply Chain for national wholesale sign supply manufacturer and distributor Grimco tells the story of why he thinks GAINS was the right choice to optimize their supply chain operations and what their new level of efficiency has meant for them.
My name is Matt Luther. I’m the director of Supply Chain for Grimco. I oversee our US operations, which include procurement, supply chain, logistics, and warehousing. We are a wholesale distributor and manufacturer of sign supplies. We currently operate in North America, the US, and Canada, as well as in the UK. Before we implemented GAINS, we had had issues with the previous demand planning software where we were having stockout issues, we were losing sales, and our forecast wasn’t appropriate, but we really couldn’t figure out why. So during the process of implementing GAINS, we realized that the previous demand planning software wasn’t actually capturing all of our sales. Thus, our forecast wasn’t appropriate. If we were to go back and look at our inventory position prior to GAINS, the health of our inventory was much less than what it is currently. And what I mean by that is we are very focused on core items, items that are going hit the most customers for us.
And when we look at it, previous to GAINS, A and B items for us only made up 60 or 65% of our overall inventory balance. So our order fulfillment the next day was below par for us and not what we needed it to be. We were in the low 80% range. We were having lost sales; we were having stockouts. And a lot of that was because the demand wasn’t being placed in the right position. So, for example, if we had a customer in St. Louis that was ordering a product and it was shipping from Kansas City, the prior software was placing that demand in Kansas City as opposed to forecasting and placing that demand in St. Louis. It’s allowed us to improve the health of our inventory in the actual locations it’s needed as opposed to the wrong location. And so, in turn, we’re able to ship it to our customers much quicker.
So a lot of it has been focused around the demand planning side, the forecasting, and being able to look at what we need to do. We have been able to significantly increase our order fulfillment from low 80% to 91 to 95% on a very consistent basis. And that is for next day delivery. If we were to actually look at order fulfillment on a trailing week basis, we’re going to be at 98 to 99% of all orders delivered to our customers within a week. If we didn’t have automation with our team size, we wouldn’t be able to be accomplishing what we currently are. And prior to GAINS, we didn’t have any automation in our procurement function. Because of what we’ve done with GAINS, we’ve currently placed 650,000 PO lines, not unique purchase orders, lines on a purchase order. And so far, we have automated about 380,000 of those lines.
Two years ago, the team would’ve been responsible for a hundred percent of all of those purchase order lines and the review of them. As our business has grown over the last handful of years, we’ve leveraged automation so that we actually haven’t had to increase our team size. We look at it on a sliding scale. For example, if we’re placing a hundred thousand purchase order lines per team member, are we able to utilize automation so that we can get to 150,000 lines per team member. Automation has essentially allowed us to do more with less; even though we’re not downsizing the team, we’re not adding the same amount of resources that we worked on two years ago to keep up with the growth of our business. GAINS has really allowed us to expedite the implementation of the consolidation of acquisitions. Acquisitions need to be integrated into our systems as quickly as possible, and GAINS has allowed us to do that.
Describing GAINS as easy to use, in my opinion, is probably an understatement and doesn’t do it enough justice. GAINS is very intuitive, so much so that if we were to bring upon or bring a board somebody that really didn’t have any purchasing experience, I feel extremely confident that we could get them up to speed in a very short period of time because of its ease of use. The way that it presents data and graphs is very, very intuitive, and it’s very beneficial. The amount of data that GAINS has is overwhelming for a lot of people. And if it’s not presented in a very concise fashion, it can slow you down, right? But GAINS has made it extremely intuitive for our team members so that we can accomplish much more with the same amount of people.