Mark’s Leverages the Power of Consumer Demand Forecasting and Advanced Replenishment With Support From JDA
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Mark's is a Canadian retailer that grew to over 385 stores across Canada. To better meet customer demand, Mark's implemented JDA solutions including demand forecasting, replenishment, and size scaling. This has helped Mark's reduce inventory, increase sales and profits, and better satisfy customers by ensuring the right products are in the right stores. Mark's sees continued growth opportunities by further integrating JDA solutions across its supply chain and merchandising planning.
Mark’s Leverages the Power of Consumer Demand Forecasting and Advanced Replenishment With Support From JDA
- 1. Case Study A Perfect Fit Mark’s Leverages the Power of Consumer Demand Forecasting and Advanced Replenishment With Support From JDA Mark’s Fast Facts Industry Retail – Softlines Headquarters Calgary, Alberta, Canada Description Mark’s Work Wearhouse was founded in 1977 as a single store in Calgary, Alberta. Since then, the company has rebranded itself as “Mark’s” and has grown to become one of Canada’s leading apparel retailers, with more than 385 stores across Canada. Objective The company prides itself on offering high-quality work wear, casual and business wear, and sports Reengineer the company’s retail enterprise to be more responsive to customer and outdoor apparel, for both men and women. demand — all the way from forecasting to execution — in order to drive sales, In 2011, Mark’s employed about 6,300 people and increase inventory turns, minimize stock-outs and overstocks, and increase earned revenue of more than $1 billion CAD. Mark’s service levels. is a subsidiary of Canadian Tire Corporation, one of Canada’s largest retailers with $11.6 billion CAD in Solutions 2011 revenue and almost 70,000 employees. • JDA® Portfolio Merchandise • JDA® Demand • JDA® Fulfillment Management “With JDA solutions in place, we are • JDA® Merchandise Performance Analysis • JDA® Size Scaling positioned over the next four to five years to support and drive Mark’s Services growth targets. While we consider • JDA Consulting Services • JDA Education Services ourselves to be early in our change • JDA Performance Engineering • JDA Support Services curve, together with other strategic initiatives, the new JDA tools and ways Real Results of working are already supporting • Achieved three quarters of record top-line sales from Q1-Q3 2012 strong results in both top-line sales • Reduced inventory units 8.3 percent below last year rate (LYR) in Q3 2012 and profits. As we continue to integrate • Realized strong profit performance to LYR and plan in Q1-Q3 2012 the new tools and processes within • Decreased pre-pack cartons by 29 percent for Spring 2013, resulting in our supply chain, planning and fewer costs and increased efficiency merchandising functions, we are very • Achieved an 8 percent reduction in year-to-date supply chain spend versus confident that even greater opportunity LYR for distribution and transportation in Q1-Q3 2012 is yet ahead.” • Realized a significant reduction in store-to-store inventory transfers - Ian Gilbart, • Decreased stranded and clearance stock in stores Vice President, Supply Chain, Mark’s • Achieved higher levels of customer satisfaction
- 2. “We required a high-quality, multi- echelon, time-phased planning tool. And in that category, JDA Demand and JDA Fulfillment are considered the best in class,” said Little. “We considered other vendors, but nobody could touch JDA’s demand forecasting and replenishment capabilities for our retail concept.” Ultimately, Mark’s chose JDA Demand, JDA Fulfillment and JDA Size Scaling to integrate with in-house planning tools to ensure that its merchandise assortments were created, distributed and replenished based on its shoppers’ real-world needs. The company also selected JDA Portfolio Merchandise Management, along with JDA Merchandise Performance Analysis, to serve as its master data hub and merchandising system. The Power of a Fact-Based Approach Mark’s Work Wearhouse began selling the manual ways of working became In the years preceding the JDA work clothes and boots for men in 1977, unmanageable and we ended up with implementation, Mark’s built the and over the next two decades gradually goods stranded in various locations and capability for planning store assortments expanded its offerings to include business short in other locations.” with a fact-based look at historical sales in wear, casual wear and outdoor apparel each store, down to the stock-keeping In addition, for out-of-stock products in — even extending its consumer focus to unit/color level. This was a great step specific stores, Mark’s has a customer include women. While the retail chain forward from older ways of working. Now, promise that is expensive to fulfill. “The grew steadily, exponential revenue with the added capabilities from JDA, customer shopping experience is growth began in 2002 when the company Mark’s uses JDA Size Scaling to analyze extremely important to us. We have a was acquired by retail giant Canadian Tire. those sales trends to determine which service — Mark’s FastFind — where we’ll Today, Mark’s operates more than 385 merchandise will satisfy its customers’ deliver merchandise that’s out-of-stock in stores across Canada and a growing needs, in which sizes and amounts in a certain size or color to the shopper’s e-commerce platform. which stores. home or local store at no cost to our While this increase in product complexity consumer,” said Little. “While this “Let’s say we have three new colors that we and geographic coverage has been a commitment to our customers will not think will sell, but we want to know how winning formula for Mark’s, it has also change, when you think about couriering shoppers will react in the store from a size created some merchandising challenges. goods across a country that’s 8,000 and quantity standpoint,” said Little. “JDA “Several years ago, we recognized that kilometers wide, the distances are vast. By Size Scaling provides us with all of the sales there was a gap between what and how the time we transport goods from the history, which is stored in JDA Portfolio much we were placing in our stores and wrong place to the right place, we deplete Merchandise Management. When that data what customers actually wanted,” said Iain our margin. We needed to find tools and goes into JDA Size Scaling, along with our Little, demand and fulfillment strategy processes that could ensure that each assortment plan, we get a pretty good idea, manager, Mark’s. customer was satisfied the first time they based on the curves and quantities of buys come into our stores.” against those size curves, of what is likely to “We were relying on an older way of working,” said Little. “We would start with “We needed a consumer-demand sell in which stores. We can decide if we a certain amount of money and a list of forecasting solution that would forecast have enough budget to support one, two things we wanted to buy. We had people what customers would be looking for in or three new colors. JDA Size Scaling then working in a very manual way with the store each week, allowing us to strand identifies how many units we’ll need in vendors to reserve production capacity, less stock at stores and stock out less every size to cover our strategy. Finally, the buy fabric in particular colors and often,” said Little. “We were also looking to size scaling solution helps us optimize our generate purchase orders, but we had switch away from the concept of reaction season opening pre-pack configurations limited intelligence on how much we to proactively placing goods into stores and our blend of units to hold back in our would actually need when we went to based on that consumer demand forecast.” distribution centers for in-season market. As we grew as an organization, replenishment.”
- 3. “Once we have that information, then we The Mark’s team has also been pleased with Since deploying JDA forecasting, use JDA Demand and JDA Fulfillment to the level of support its staff has received replenishment and size scaling solutions, give us an idea how the forecast will play from JDA Services. “Whenever I’ve had a Mark’s has seen an impressive out week to week over the season,” Little need, JDA was very good at coming up improvement in sales at a preferred price, continued. “We now have a time-based with the resources,” said Little. “Not just any and the retailer anticipates this to increase approach that includes seasonal sales, resources, but the skills and qualifications over the next few years. According to holiday sales and planned events. We also we needed to solve that problem or Gilbart, the recent implementation of JDA have a replenishment plan that tells us address that business need. JDA offers fast solutions has positioned Mark’s for how to pre-pack and flow the goods to turnaround time and good customer continued success and growth. support sales.” support. They are a customer-focused “In the 1970s and 1980s, Mark’s started off organization in terms of making sure they Working together, the JDA solutions by selling a lot of industrial work wear and understand what we need — then getting automate many previously manual footwear. Over the years we have been it for us in a reasonable time frame.” activities — from generating purchase successful at expanding our assortment to orders to pre-packing store deliveries. add in more men’s and ladies’ casual “The JDA solutions help us make more Poised for Future Success apparel and footwear,” said Gilbart. “With strategic decisions,” noted Little. “For JDA solutions in place, we are positioned example, we might only pre-pack 70 “For us to win the retail game in Canada, over the next four to five years to support percent of our merchandise for the stores. we have to put inventory only in locations and drive Mark’s growth targets. While we If the forecast is wrong, JDA Fulfillment that it’s actually going to sell at a good consider ourselves to be early in our enables us to send the other 30 percent to price,” said Ian Gilbart, vice president, change curve, together with other the places it’s been selling best.” supply chain, Mark’s. “With a good strategic initiatives, the new JDA tools and consumer demand forecast — at the store ways of working are already supporting level, by item, by week — we end up with strong results in both top-line sales and Effectively Managing 26 Million more satisfied customers and some very profits. As we continue to integrate the Demand Forecasting Units powerful insights into how to manage the new tools and processes within our supply business.” chain, planning and merchandising One of the most impressive features of functions, we are very confident that even Mark’s merchandising system is its sheer “Already, we have made great strides in greater opportunity is yet ahead.” size and scale. “With our broad selection of leveraging our forecasting information styles, colors and sizes, we have roughly 26 from JDA Demand and JDA Fulfillment to million store/item combinations, where we plan our physical supply chain resources About JDA Software, Inc. drive replenishment through the JDA tools and capacities. Aggregating forecasts by on a nightly basis,” said Little. distribution channel and function helps us JDA® Software Group, Inc., The Supply know how much labor and network Chain Company®, offers the broadest “We’re very pleased with the incredible capacity to build in advance, thus portfolio of supply chain, retail depth and breadth of JDA’s forecasting improving service level and productivity. merchandising, store operations and all- capability — both the algorithms and the We leverage this information throughout channel commerce solutions to help ability to tune the models within JDA our supply chain, all the way to the store companies manage the flow of goods Demand,” said Little. “JDA Fulfillment has an receiving dock,” said Gilbart. from raw materials to finished products incredibly powerful replenishment engine. and into the hands of consumers. JDA’s It’s such a well thought-out solution in “Further, as we move forward, we will deep industry expertise and innovative terms of the number of variables and the begin sharing our demand and purchasing cloud platform helps companies optimize simplicity of the variables.” forecast with suppliers to enhance our inventory, labor and customer service forecast quality through collaboration, levels. As a result, JDA solutions have reduce supplier lead times and improve fill become the standard for the world’s rates,” added Gilbart. leading retailers, manufacturers and distributors. WEB AMERICAS EUROPE ASIA PACIFIC jda.com US UK & Northern Europe Singapore Japan South Korea EMAIL +1 800 479 7382 +44 (0) 1344 354500 +65 6305 4350 +81 3 4461 1000 4-Color 2 3016 0700 +82 info@jda.com Canada & Latin America France & Southern Europe Australia China India +1 480 308 3555 +33 (0)1 56 79 27 00 +61 3 9860 1000 +86 21 2327 9400 +91 22 3088 7878 Copyright © 2013, JDA Software Group, Inc. 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