Not so long ago Canada Sportswear Corp. (CSW) had a good reputation for its clothes and a poor one for service. But the clothing maker devised a unique manufacturing resource planning (MRP) program to make all aspects of the business work well.
A few years back the Toronto-based firm was struggling to keep up with customer demand.
“Fill rates were probably less than 50 per cent,” said Mark Plotkin, CSW’s planning manager. Clients weren’t happy waiting for CSW to have the goods required to fill their orders.
Part of the problem was forecasting demand. CSW had a manual method of figuring out just how much product it needed, but it was a slow process. It took two months to complete a forecast for the company’s entire product line.
Something had to be done. CSW created a planning department to help straighten things out. Plotkin, meanwhile, built an MRP system designed to help the firm stay ahead of customer orders.
On the surface CSW’s MRP system is little more than an Excel spreadsheet that shows product SKUs and presents a number indicating how many of each item is required. But behind the scenes, a formula of Plotkin’s making rifles through a series of conditional calculations, comparing orders made, order history and other parameters to decide how much product CSW needs from its suppliers.
“That’s just basic MRP principles,” Plotkin said. “One of the additional items we have that’s not on the traditional MRP is ‘day’s planned inventory.’” This part of the program combines the forecast and the current day’s orders to tell planners how many days of inventory the company has in stock.
“It’s a massive formula,” Plotkin said, pointing out that it took a week for him to create the scheme, which occupies almost the entire Excel formula field.
“The formula looks at today’s projected inventory and it’s looking at every month’s forecast until it’s depleted, then tells you how long you have,” Plotkin said.
CSW’s MRP system combines Business Forecast Systems Inc.’s Forecast Pro software and the inventory control/customer service system it sources from Momentis Systems Inc. in Montreal.
Plotkin said one of the greatest challenges of building the solution was integrating it with Momentis. “The implementation went through a lot of back and forth, trying to get [developers at] Momentis to understand the formula, and the concept,” Plotkin said. “I actually sent them an example of the formula, but I had to write it out longhand for them to get it right.”
After six months CSW had its Forecast Pro-Momentis-linking MRP system up and running. “We’re now getting tougher with [suppliers], enforcing penalties if they don’t meet deliveries,” Plotkin said, adding that suppliers are warming up to the new regime.