How ORS Nasco Optimized Inventory & Service Levels with GAINS

Sarah (00:04):

Hello everyone, and welcome. My name is Sarah Barnes-Humphrey with Let’s Talk Supply Chain. I’m at the GAINS Summit with Shane. Shane, how you doing?

Shane (00:13):

Great. Doing well today. Thank you, Sarah.

Sarah (00:15):

Yeah, I’m so glad that you could join me. Talk to me about the energy, the vibe that’s happening at Summit right now.

Shane (00:22):

Yeah, no, it’s really exciting. We are in the throes of implementing GAINS right now. I’ve been a past user and coming back here, so this is not my first time at the Summit, but I would say the energy level is really high. I have people on my team here as well as people I’ve worked with in the past, and it is just great to see people asking questions, understanding how they utilize the system, the people they’ve worked with, and just the experiences that everyone shares. So it’s really high energy level and people are excited to be here.

Sarah (00:50):

Great. Well, for those who don’t know you, why don’t you tell us who you are, what you do? Give us a little bit of background on your journey in supply chain, maybe the company that you work for.

Shane (00:59):

Sure. So my name is Shane McCarthy. I’m the COO for ORS Nasco, and I’m responsibility for everything from safety to real estate to supply chain, logistics.

 

Sarah:

Wow.

 

Shane:

My background, I actually started as an accountant. I got into supply chain through inventory management at Cardinal Health. Worked there for a number of years and worked with a lot of consulting firms on best practices, engaging employees, lean Six Sigma, and I’ve been able to utilize some of that early training in my career at Lawson Products as well, where did a lot of network optimization, inventory optimization, and then continuing that with ORS Nasco. I think the optimization word is used a lot. It’s not really anything we ever achieve. It’s getting to best practices, better practices, but that continuous improvement journey has kept me challenged and kept me excited about my current supply chain.

Sarah (01:48):

Yeah, I can feel your passion. I love it. I mean, when you get into supply chain? It kind of grabs you and never

Shane (01:55):

It does. I was not displeased to leave the accounting world behind. It was a little bit more predictable, so I like the unpredictability of supply chain.

Sarah (02:03):

Well, let’s talk about your experience with GAINS. I think you’ve been through two implementations, one with a previous employer now with your current employer. Talk to us about what that has been like and how it’s evolved.

Shane (02:17):

So the company I was with before we had GAINS in and then we went through an ERP implementation and the thought process at that time was, let’s take away all the bolt-ons that we had. Let’s go with out of the box ERP. And we found that just the specific use case that we had for GAINS before was missing and we were not delighting our customers the way we wanted to. Our inventory levels were too high, our out of stocks were too high in the home DC. So we went back to GAINS and we re-implemented at my previous employer.

Shane (02:52):

And it was great because we were able to put a newer version in with more functionality, but the team already understood the tool and the team was very comfortable with it and it was an easy business case for our CFO when I was able to share not only the better utilization of our working capital we would have, but then for our sales team to understand the improvement in the service levels for the customers. So that was a really good, I’d say re-implementation case. And now that I’ve been with ORS NASCO going on three years, I’ve identified the same opportunity where we have too much inventory in some locations, not enough in others. So we’re doing what we call cross shipping, not filling from the home DC as much as we would like. So really built that business case again around, I know we can come in, we can delight our customers better and we can do a better job of using our working capital.

Sarah (03:43):

I love all of those key factors that you identified that they can definitely help you with. Now I want to ask you, because GAINS kind of sets themselves apart by how they support their customers through all of the innovation needs, all of the implementation. I’ve heard it over and over and over again, but also through the evaluation process because I think you’ve been known to say that they understand your supply chain needs. Can you talk a little bit about that and how they’ve helped you customize the solution for your current?

Shane (04:16):

Yeah, that’s a great question, a good point. I will say that when we met with the GAINS team as well as some other competitors in our RFP process, when you sit down with the team, you get experienced supply chain leaders.

 

Sarah:

That’s important.

Shane:

It is really important. They understand the terminology we use, they understand the metrics, they understand what we’re trying to achieve. And sometimes when you meet with software companies, they’re trying to learn not only your business but also what are you talking about in supply chain? What’s a distribution company do? So GAINS is so focused on distribution that they just understand what you’re talking about. So the process was very thorough in data cleansing, data validation, understanding what are we looking at, are we all defining things the same way? And then having, it’s interesting, our implementation solutions manager is the same one I used at the previous employer. So having that continuity helps and having people that understand what we need. And I would say the question about customizing GAINS, I would say it’s configuration. So especially we’re going through the cloud version of GAINS now, so there won’t be a lot of customization, but there’s so much that’s configurable that it really is customized to what we need, although it’s a solution that GAINS can easily support.

Sarah (05:32):

So is one of the first questions, do you ask any of those software partners? Do you test them on acronyms?

Shane (05:42):

Well, our acronyms might be a little different, but we do test them on Order Complete, Home DC, fill rate. What do you mean by service level? How do they handle non-stock items? Things that they might not be familiar with. So yeah,

Sarah (05:55):

Just to check their background.

Shane (05:57):

Right, exactly. So we know what they know what they’re saying

Sarah (06:00):

Right. I mean, we have a lot of acronyms in supply chain, so I think it’s definitely

Shane (06:03):

That might be a good way to test in the future right

Sarah (06:08):

So let’s talk about rates and inventory. I think you’ve had some challenges and having them in the right location. Can you talk about how GAINS has supported you with that and what you’ve seen as far as you know putting that into place?

Shane (06:21):

Yeah, I think that’s a great question. And every company wants to improve their fill rates with less inventory, but there’s never a perfect answer. I think we learned that yesterday in some of the sessions as well. There’s not a best answer, there’s better answers. There’s answers dependent on certain conditions or what are you trying to achieve at that time?

 

Sarah:
Better choices.

Shane (06:41):

Better choices. Yeah and so I think what GAINS really helps us do is evaluate scenarios, and we can talk a little bit deeper on that as well. But whether it’s understanding what if we were to add a distribution center or take away a distribution center or change our footprint or add new SKUs, what does that look like in terms of our order profile for our customers, how we fill complete the service level, line routing, cross shipping, all those things that come into play. So I think really the ability to model different scenarios is really what sets them apart.

Sarah (07:15):

Well, talk to us about that because I think you take a modular approach to supply chain and technology. Can you walk us through that and how GAINS has been able to support you with

Shane (07:24):

Yeah, I think in both of my past two positions, it’s fair to say the ERP system is the backbone of the company, it runs the company and that’s great. And you need a solid ERP system for security and stability and one source of the truth for

Sarah:
Yeah

Shane (07:41):

SKU information, content. But when it comes to best of breed or doing things really well, like warehouse management systems, inventory planning and forecasting, you really need a best of breed if you’re going to scale, grow, and be efficient. And so what I found is although many ERP solutions have a functionality to do inventory planning and forecasting, it’s not best of breed. And so I think what we’ve been able to do is take our ERP, which is we operate a older ERP right now, but it’s been customized with a lot of you know customer focused activities around delivery, you know specialized services. And so we don’t want to disrupt that, but we need a better backend for making supply chain decisions and GAINS is really great because it can bolt right on to that ERP. The technology team has been great to help us work with maybe a system they haven’t implemented with before, but still for us to get all the great functionality out of the system.

Sarah (08:48):

Well, and also I think you have to do a little bit at a time. You have to test technology a little bit at a time to make sure that it’s going to work for you and what you need from that system and how they’re going to integrate. I mean there’s a lot that goes into it.

Shane (09:02):

That’s a good point of the modularity as well is we can run in parallel for a little bit and understand what the output is going to be with GAINS relative to our existing system because nobody wants to go live and all of a sudden double your purchase orders or yeah have something happen with your data, your content. So it’s important that we can take not only a modular approach of adding on, but also a parallel path approach and test things as we go.

Sarah (09:24):

So talk to me about how GAINS is helping you balance customer satisfaction, but also cost savings because those are two really big drivers right. Everybody is looking to improve customer experience, but they also want that cost savings on the backend so that they can have you know better cashflow and things like that.

Shane (09:43):

Yeah, that’s a great question Sarah. So we’re always looking to balance the needs and desires of multiple areas of the company. So whether it’s the CFO and working capital or our sales personnel and making sure that we’re satisfying the customer. What GAINS allows us to do is to really do, again, I talked before about scenario planning,

Shane (10:03):

Understand, well, what if we did this? What if we added more SKUs that are non stock today in all of our distribution centers? What do we think our impact would be to service level? Does our sales team think they could sell more? Does that justify then that working capital investment and vice versa? What if we were to reduce our working capital, or what if we were to add a distribution center, take a distribution center out? So it really allows us to put a selection of options together and then as an executive team meet and think about what’s going to be best for our organization.

Sarah (10:34):

Yeah well, and I think all in one language, right?

Shane (10:38):

Yes yeah

Sarah (10:38):

Too many times we come to the table and we’re presenting potential scenarios at that can affect supply chain and affect maybe one other department, but we don’t think about all of the other impacts that it’s going to make within that organization. So this gives you the opportunity to present all of the data

Shane (10:55):

It does.

Sarah (10:56):

And like you said, not necessarily a perfect decision, but you can decide which path you want to take with the information that you have, as an executive team.

Shane (11:06):

That’s exactly right. And I think the tools within GAINS, and even when we do new product launches, the S&OP process that it enables allows you to have those conversations to really have a set of reports that you can look to and metrics and you can understand if what you’re doing is driving success for the business.

Sarah (11:25):

Well, and that everybody can understand,

Shane (11:26):

Yes right

Sarah (11:28):

So I think part of the future is in acquisitions, is that right?

Shane (11:32):

That’s correct.

Sarah (11:33):

Okay. So talk to me a little bit about how you’re going to be able to utilize GAINS or how confident you are in working with GAINS to help you with those acquisitions as you bring on a new supply network as you bring on new SKUs.

Shane (11:47):

Yeah, so when I was at my previous position, we did multiple acquisitions and we were very easily able to model additional distribution centers, understand if we added SKUs, what that would look like in local service level, market service level. A part of ORS’s vision is to also grow through acquisition as well as just growing with customer acquisition as well. And one of the things in our existing system is loading in new forecasts and new usage is challenging. And so the system today needs a lot of statistical data of months of history to make good decisions and has a limited number of models. GAINS, really allows us to use Excel sheets, use all sorts of sources of information to put new usage in as well as model those distribution center changes that you might get with acquisitions or if your customer mix changes. So a certain geography becomes much more important to you,

Sarah (12:44):

Tight

Shane (12:44):

You can understand what are going to be your service needs in that area. So I think the tools of scenario planning and always involving our GAINS solutions managers helps because we’ll continuously go back to them. And I think that is another thing that sets GAINS apart is you don’t just implement and then they go away.

Sarah (13:06):

Right

Shane (13:06):

They’re still a part of your team. And when you have questions or you know others talked yesterday about you really only scratch the surface of what GAINS is capable of. So sometimes we just have to go back and ask the question to our solutions manager, how can you help us solve this problem? And they’re more than willing to help sit down with you and develop some type of a scenario that maybe they’ve worked on for other client and help you apply that to your business.

Sarah (13:31):

Well, and with acquisitions you want to be able to have those scenarios and be able to make decisions a lot quicker than we have in the past with acquisitions as well, depending on where inventory is located with this acquisition and how you can pull everything together, maybe reduce those capital costs, but you want to make those decisions a lot quicker than we have in the past.

Shane (13:53):

A lot quicker. And with data. And I think GAINS really allows us to make those data driven. I mean everybody says that data-driven decision, but in some instances you might feel what the right answer is, but the feeling doesn’t go very far in the boardroom. So I think you need to bring data and that really helps to have the data and like you said, common metrics, common language.

Sarah (14:12):

Now collaboration is the future of business. That’s the saying that I say all the time. And a lot of times in supply chain or even in organizations, we’re working in silos, but I believe that collaboration within organizations and within departments really is the future of an organization. And communication helps with communication. How does GAINS sort of support you in that? Because I know that collaboration as a big success factor,

Shane (14:40):

It is a success factor and I think something that has been made more challenging in our post COVID world is many companies, ourselves included, work in a remote and hybrid structure. And so you have to make time and effort to have collaboration, to have people getting in a room together, brainstorming. It could be virtually, it could be physically, but I think I know that again, we’re right in the implementation phase with GAINS at ORS Nasco, but in my previous experience with GAINS using the S&OP module, it really enables you to start having discussions involving the sales team, involving new product launches, product management, category management, and understanding, okay, if we launch this, we’re going to measure it. We’re going to look at the results and bringing people together to understand how does one new supplier, new product influence the whole supply chain.

Sarah (15:38):

And so you said you’re in the middle of implementation. What do you hope the future looks like after fully implementing GAINS and how are you going to measure that success?

Shane (15:49):

Yeah, the future will look like, I think the easy answer is we will have improved service levels and better use of our working capital. We will not contribute to our excess and obsolete at the rate that happens today. And really that comes about from just better statistical models that I think we learned yesterday. And you’re not going to reduce variability, but how could we predict variability or understand variability? And so I think the easy answer is we’ll have better metrics. I think the better answer goes to what you said about collaboration. When we build a process around a tool that helps us plan for our business, plan for growth, understand if the activities that we’re doing, the products we invest in, suppliers we engage with, if that’s helping us accelerate our growth, and that’s going to happen with collaboration on what are those other key metrics around new product launches, customer satisfaction, or just engagement with suppliers as well, that will help us measure that GAINS.

Sarah (16:53):

Yeah and then figuring out what the other gaps are and what you need to be able to do that from here as well.

Shane (16:58):

Continuous improvement, right?

Sarah (17:00):

Yeah/ Love that. Well, thank you so much Shane for joining me today.

Shane (17:03):

Great, Sarah, I appreciate it and happy to be here. Thank you.