Success Stories

Sometimes the numbers just aren't what they seem. Wayne Dawson, purchasing supervisor for NTP Distribution of Wilsonville, Oregon, thought his 98 percent fill rate for RV parts and supplies was making the grade.

And it was, for customers.

But for the company, a 98 percent fill rate meant split shipments from three distribution centers in Oregon, California, and Indiana - at increased freight costs that cut margins. The root of the problem was a forecasting gap that caused NTP distribution centers to experience stock-outs.

"We thought we'd have enough inventory based on existing forecasts, but when the orders came in, we were out of stock on 10 percent of the product," says Dawson. In 2003, Dawson previewed the Prelude Forecasting Module and installed it on the company's RS6000 server.

Before full rollout, he tested the solution, tracking one vendor for each of five buyers across three months. Comparing stock-outs from current to previous years, Dawson found the Prelude Forecasting Module to be more accurate in nearly all cases.

"The new forecasting formulas allowed us to narrow our trend analysis and more accurately predict inventory requirements," he explains

Prior to installing the module, NTP forecast its inventory using a three-month seasonal or a five-month non-seasonal trend factor against six months. Using the 16 new formulas from the Forecasting Module, the solution has become more accurate in forecasting the proper usage.

An example of the more accurate forecasting: "Last October, the three-month seasonal forecast for a water pump was 300 units. After installing the Forecasting Module and running the comparison report, it changed the forecast usage to 412," says Dawson. "Our actual usage for that month was 452: much more accurate than the original forecast of 300.

"Our stock-outs have fallen from 9.4 percent to 5.8 percent with a 98 percent fill rate and a 4 percent split shipment rate." He concludes: "I would advise everyone to get the Forecasting Module for their Prelude solution."

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