Video: How Continental Battery Systems Overcame Supply Chain Challenges with GAINS

Sarah(00:04):

Hey everyone. Sarah Barnes-Humphrey here of Let’s Talk Supply Chain at the GAINS Summit with Jeremy. Jeremy, thanks for joining me today.

Jeremy (00:11):

Absolutely.

Sarah(00:11):

Great. So a little birdie told me that this might be your first GAINS Summit. Can you tell me a little bit about your first impression?

Jeremy (00:18):

Yeah, it’s been awesome so far. I’m here with Alex Wood, who works with me at Continental Battery Systems. We’ve been using the GAINS software for about a year. This is the first opportunity that we’ve had to come to this conference and we’ve been very impressed so far. We’ve been able to gather a ton of really relevant, useful information. We’ve had a breakout session with a couple of the folks from GAINS where we are actually able to take a look at some of our data in real time relative to some of the stuff from the conference. And so it’s been a really good experience.

Sarah(00:50):

You seem really pumped

Jeremy (00:53):

Yeah, legit.

Sarah(00:53):

Well, before we get too far in, why don’t you tell everybody who you are, what you do, and a little bit about your company?

Jeremy (00:58):

Yeah, so my name is Jeremy Kiel. I’m the director of Inventory and Network Planning at Continental Battery Systems. I’ve worked for the company for 17 years in a variety of different capacities. It’s actually been the only job that I’ve had in my career that’s taken on a multitude of different capacities. I’ve done sales in our organization, I’ve run branches, I’ve run distribution centers, and now I’m working out of the home office in the supply chain department running the planning aspects specifically of what we’re doing from a company level.

Sarah(01:34):

Very cool. You kind of got sucked into supply chain. You’re never going to leave to go back into sales.

Jeremy (01:40):

Probably not. I really enjoy what I do. I like the team of people that I work with. There are some really great things about interacting with customers. There are also some challenging things and I’m really liking when I’m doing it right now.

Sarah(01:51):

So let’s talk about those challenges. What challenges were you facing before you implemented GAINS?

Jeremy (01:56):

Yeah, so our company is the conglomeration of a number of different acquisition businesses that were in a similar marketplace. And the historical perspective is, at least from a purchasing standpoint, all of that activity was happening in the field, a lot of which was at the branch level,

Sarah(02:18):

Ok

Jeremy (02:19):

And a lot of it was using some real fairly archaic methodology to put together, number one, what is our demand and our forecast, and number two, how are we going to purchase from our suppliers? And so when our chief supply chain officer was hired and brought into the business, he very quickly identified that in order for our company to continue to grow and evolve and kind of move to the next level, we really needed to overhaul our supply chain. He had been a part of a number of different businesses where he had taken a number of acquisition companies that had joined into one and kind of grew a supply chain with these businesses, and had sort of seen that, had that experience had also used GAINS before in those companies. So that is where the GAINS conversation begun. We ultimately decided that GAINS was the correct tool for this organization as well, and that’s when I was kind of brought in out of the operation into the supply chain to really support and facilitate both the implementation of the software as well as the ongoing use and planning.

Sarah(03:31):

What were some of those conversations before adopting it, like to drive the adoption of GAINS? Obviously he’s used it before, nobody else has. So how did those conversations go?

Jeremy (03:43):

There’s, you know, there’s a conversation at the executive level where you’re talking about you know the investment that’s associated with the software like this and what the expected return is. There’s also kind of the efficiency conversation, which is less objective, but the conversation was really around what amount of time are our purchasers and planners spending essentially utilizing the processes that we have set up today, and how could we improve the use of their time, number one, but also the output that we’re getting from them, number two, and what does that look like in terms of dollars for the organization? What does that look like in terms of fill rates for our customers? What does that look like in terms of just the overall success of our inventory performance? And those were really the factors that we were considering when we ultimately chose GAINS.

Sarah(04:42):

So talk to me about what ways GAINS has sort of supported you in facing those challenges coming, overcoming challenges.

Jeremy (04:50):

So I have been involved with the integration and implementation project both on the data side of the equation and on the Go live and the support part of it as well as now the planning aspect. And I’ve had the privilege to be able to work with Willis Wendell at GAINS as well as Parth who has been just instrumental in both helping us get the software off the ground. But from a support standpoint, quite frankly, my background in inventory and supply chain is relatively limited. I don’t have like a classic education in supply planning.

 

Sarah:

Most of us don’t.

Jeremy (05:38):

Most of my experience in the business has been really interacting with customers and running the operational side of our branches. And so there’s a lot of nuance with regard to supply chain, demand planning, in particular that they have helped and coached me on, which is probably a little bit out of scope of what they are obligated to do in terms of an implementation, but have been tremendously helpful to help us break down scenarios where we’re struggling with an item or groups of items, spending large amounts of dedicated time with me, with the rest of our team on conference calls and meetings, going through really anything that we need. And they’ve been alongside of us every step of the way. And I think you know our success as an organization with the software is specifically tied to support that we’ve received.

Sarah(06:33):

Wow, that’s really great to hear. So how did you end up getting stakeholder buy-in and sort of getting everybody on board with all of this? Because change management is a really big piece to all of this.

Jeremy (06:45):

Yeah, for sure. So I think the financial aspect, first and foremost, the GAINS team is obviously able to lay out a pretty convincing cost benefit analysis in terms of what we’re doing today,

 

Sarah:

Ok

 

Jeremy:

Where the potential leaks are, where we’re spending dollars that we could save if we were planning effectively, effectively in the way that GAINS can kind of support us in doing that. And so we were given some really good data to present to our executives and ultimately it was presented to the board of directors of our company who signed off on the investment as well. But everybody felt pretty confident both with the objective data that was presented as well as the experience that David Meeks, who’s our chief supply chain officer had had with GAINS previously and was able to speak to the support that he’s received, the relationships that he already has built with this organization. And the collection of those things is ultimately kind of what brought us to where we’re at today.

Sarah(07:48):

Awesome. So talk to me about adoption.

Jeremy (07:50):

Yeah, change is, change is tough, right? In life and business and there have been, I think everything on every end of the spectrum. We’ve had users who are very technology minded, they like being overwhelmed with data and have really grabbed GAINS and ran with it and felt like, man, this is the piece of my work life that’s been missing for this whole time. I love this. And then you have the other side of the equation, which is somebody who has a wealth of experience in an industry, 25, 30 years of doing this job and doing it differently than maybe what it’s being presented through GAINS. And so it’s taken time for you know individuals like that to be able to, number one, fully understand the capability of the software, what it’s trying to show them, how it’s different than what they did previously, but also how it’s very similar to what they were doing previously with more data points and probably a higher level of accuracy as well.

Jeremy (09:00):

And so slowly but surely with my support, the support of Alex, who I work alongside with, she’s our director of procurement, we’ve been able to bring those team members along and the ones that really have taken it and run with it, you just let ’em do their thing. And the ones that need some extra handholding and support from a cultural perspective to continue to move them along, that’s where we’ve spent our time and I think we’ve had some success. And so I would say today, if you were to ask any of our planners or purchasers, if their life as in their current role is better today than it was prior to the existence of GAINS, I would be willing to bet that most of them, if not all of them, would say that is

Sarah(09:46):

So talk to me about your inventory levels. How have those levels and fill rates improved as a result of the changes that you’ve made?

Jeremy (09:56):

Yes. This has been one of the most significant, I would say, benefits of implementing GAINS. So when we were operating as a company environment where the large majority of the purchasing was happening out at the field level, you have this kind of natural proliferation of inventory, both because you don’t have good data to support the decisions that are being made, but you’re also duplicating your safety stock by having multiple locations that are already product direct from the supplier. And the net effect was we were carrying significantly more inventory than what our average monthly costs of goods sold would suggest that we need to support the business. And by simply implementing GAINS, making the recommended purchases, sharing inventory where GAINS was seeing the opportunities to share, we, our inventory started at a number that was fairly high relative to what it is now. And we brought it down, I would say probably about 40% while maintaining as good or better customer fill rates as we had had previously. And so the consolidation of inventory, having a better, more effective network plan has allowed us to be able to significantly reduce our inventory investment while allowing our customers the same level of service that they’ve been accustomed to.

Sarah(11:24):

Huge savings. Inventory is just capital sitting there, right? Yes. So I’m sure they love that.

Jeremy (11:30):

They do. Yes.

Sarah(11:32):

So what does success look like for you? How do you measure that success internally?

Jeremy (11:38):

Yeah, so that’s been a question that we’ve, we’ve really struggled with, to an extent, and had asked for some support from the GAINS team, in particular to be able to develop a metric that we could share with the rest of the organization to be able to say, this is what we are targeting, this is how we’re objectively managing our performance relative to that target, and this is where we’ve been and this is where we stand today. And the way that we do that at Continental Battery Systems as a very simple metric that the GAINS team help us calculate, which we call our in-stock rate.

 

Sarah:
Ok

Jeremy (12:20):

So essentially we’re looking at populations of SKULs and based upon some set of criteria that we decide are looking at whether that item has been in stock at that facility for some period of time over the last course of 60 days. And we look at it on a percentage basis where we say for the last 60 days, this SKU at this location has been what we consider to be in stock for 85% of the time, or 89% of the time, or 91% of the time. This population of SKULs, all of our A items, we have had an in stock rate at this facility of 89% of the time over the course of the last 60 days.

Jeremy (13:07):

And when we implemented GAINS, if you look at our A and B SKULs as an organization, our in stock rate on a 60 day horizon was somewhere in the neighborhood of like 65 to 70%. And that has progressively increased to where we are today, which is still short of our service level target slightly, but has improved to the A’s are tracking right around the high eighties to low nineties, and the B’s are slightly below that. And so we have a little bit of incremental work to do, but the progress over that course of time, which has been about a year now, has been significant.

Sarah(13:50):

Well, and it kind of lets you see where those gaps are, where the improvement needs to happen.

Jeremy (13:55):

Yes

Sarah(13:56):

At the end of the day, it’s continuous improvement.

Jeremy (13:58):

That’s right.

Sarah(13:59):

Right. It’s not just going to stop or be perfect ever that time, but at least you can see where you have to do that and you’re not just guessing.

Jeremy (14:06):

That’s right. Yes.

Sarah(14:07):

So at the beginning, you talked a little bit about acquisition, growing by acquisition. How has GAINS supported you in that?

Jeremy (14:15):

Yeah, so there’s been a couple of fairly significant and ongoing projects I should say. One has been really an analysis of our current setup and making some decisions from a network perspective around very simple opportunities that we have to streamline what we’re doing. As an example, if you can imagine a scenario where you have two businesses that are operating in the same marketplace as different companies, they each have their own standalone facility, and eventually those two companies get purchased by the same entity and become one. So we obviously took advantage of the capability to merge some of those locations together, and you have this network of customers now that facility A maybe is driving 40 miles into the territory of another branch that is literally currently sitting in that town just because of the fact that it was two different companies,

 

Sarah:

Right.

Jeremy (15:24):

Two different customer bases. And so we’ve gone through a very large customer rationalization project, which also has inventory balances tied to it that GAINS has really helped us identify opportunities to better manage our supply and our distribution centers to meet the ever changing needs of branches based on this rationalization of customers. So that’s been one really helpful thing. We also have an ongoing project where GAINS is actually analyzing our network in its totality and looking at where our distribution centers are currently positioned, analyzing where our customer base sits relative to both those facilities and the local branches, and is helping to run some simulations and make some recommendations on potential opportunities to either change the size of our facilities, potentially change the position of our facilities. And there’s still a lot of simulation and work that needs to be done to ultimately get to a point where we act on that. But GAINS is supporting the effort.

Sarah(16:29):

That sounds like a lot of fun. Are there any projects that you’re excited about that you can share?

Jeremy (16:35):

Yeah, I think the one, the project that I just spoke about in terms of position of our distribution centers is the thing that’s going to be really transformational in our business in that we do a lot of stuff today out of necessity right  where we’ve acquired a bunch of different businesses, we’ve sort of slammed them together and we we’re trying to maintain the same level of customer service, but there’s a lot of firefighting involved. There’s a lot of emergency activity just to keep things going. And I’m very excited to get to a point where we know that we’ve identified the correct location for facilities, the correct size for facilities, and we know that that is going to be a very good business decision for us, which is backed up in data that we’ve analyzed, that we can very confidently make a decision move forward

Sarah(17:30):

Right.

Jeremy (17:30):

And know that that’s going to be our supply plan. And that’s a day that I long for and we’re in for, we’re not quite there yet, but we’ll get there soon enough.

Sarah(17:37):

You have some sort of special bottle or something for that day?

 

Jeremy:

That’s correct.

 

Sarah:

The day of celebrating

Jeremy (17:44):

That’s correct, yes.

Sarah(17:44):

Okay last question. For anybody who is thinking about using GAINS, what advice would you have for them?

Jeremy (17:51):

Yeah, I think you have to understand what it is that you would be looking for to get out of a support software such as GAINS. I think you need to know some fundamental challenges that your organization has to be able to effectively analyze if GAINS is the right tool. The really good thing about the team at GAINS that I’ve appreciated is they have a real customer centric focus.

 

Sarah:
Yeah

 

Jeremy:

And if there is a thing that they’re not capable of doing, they don’t feel like their software is the right fit, they will certainly recommend directions to go, resources to employ, conversations to have, but have been real honest with us when we brought things to the table that are really not a good fit for what they’re capable of doing. Like, Hey, you probably need somebody with some data analyst capabilities. This is reporting that’s better flow out of a tool or a resource like Tableau, which you have access to, right? So I think you have to have an understanding of what your current challenges are, what what you’re after and the GAINS team is really good about showing you how they can support and help the challenges that you have, and also potentially the spots where they can’t.

Sarah(19:16):

Amazing. Well, thank you so much for joining me here at GAINS Summit. That’s it for me, Sarah Barnes-Humphrey of Let’s Talk Supply Chain with Jeremy.

Jeremy:

Thanks.