Case Study

Synchronizing the Supply Chain

Black & Decker Hardware and Home Improvement Gets a Handle on Creating One Synchronized View of Demand with JDA Software

Black & Decker Hardware and Home Improvement Fast Facts

Industry Manufacturer Headquarters Lake Forest, California Description Black & Decker Hardware and Home Improvement is one of three divisions of Black & Decker, the global manufacturer and marketer of quality power tools and accessories, hardware and home improvement products, as well as technology-based fastening systems. Black & Decker HHI manufactures and markets architecturally inspired building products for the residential and commercial markets. Revenues $1 billion Number of Employees 4,000

Business Challenge
Due to the large number of new products Black & Decker HHI introduces every year across dominant retail partners such as Home Depot and Lowes, the company was experiencing manufacturing overtime, expedited shipments and excess inventory. This mandated a need for consistent processes, exception-based planning, improved planning cycle times and increased forecast accuracy.

Business Solutions
JDA Demand JDA Fulfillment JDA Master Planning

Business Benefits
With JDA Demand, we can compare forecasts, shipment history, as well as POS and order history for any of our SKUs at any given time. At the end of 2007 this resulted in a 10 percent improvement in forecast accuracy. The forecast development cycle time used to take five days and now it takes only two days, allowing our planners to focus on other variations.
- Scott Strickland, vice president of information systems, Black & Decker HHI Ability to view POS-level forecasts and actuals at the store level Full order and inventory visibility across the supply chain Consistent processes across demand, supply and manufacturing planning teams Exception-based planning More variable product mix by store Reduced stockouts and inventory levels for component and finished goods

Quantifiable Benefits
10.4 percent improvement in forecast accuracy 60 percent reduction in forecast development cycle time 80 percent reduction in monthly production cycles

Black & Decker HHI selected industryleading solutions from JDA Software, including JDA Demand, JDA Fulfillment and JDA Master Planning. Black & Decker HHI has a 12- to 14-week lead time on all of its products that are manufactured in China. The manufacturer needed to get a better view of consumer demand as soon as the products were coming off the shelves. With Lowes and Home Depot as major retail partners, JDA Demand was configured to incorporate the retailers point-of-sale (POS) data. This allowed Black & Decker HHI to analyze POS information on its products, enabling it to predict and react to fluctuations in demand faster and more efficiently. We incorporated data into our facilities from all of Lowes and Home Depots stores, as well as their distribution centers and transfer facilities. We can now look at this information at any time and determine what the POS off-take is at one of their stores, and how that off-take is accounted for at our distribution centers, said Strickland. Were able to quickly understand the demand changes and how our promotion is playing out. JDA Demand provides Black & Decker HHI with one single process to utilize the POS data for its frequent line reviews, product promotions and introductions, as well as frequent price changes. The solution also helps determine the appropriate product mix and gauge the effectiveness of various promotions. With JDA Demand, we can compare forecasts, shipment history, as well as POS and order history for any of our SKUs at any given time. At the end of 2007 this resulted in a 10 percent improvement in forecast accuracy. The forecast development cycle time used to take five days and now it takes only two days, allowing our planners to focus on other variations, Strickland added. Black & Decker HHI has the ability to provide information not just data to retail category managers quickly and at any level in the supply chain. As a result, the manufacturer has improved order fill rates to its retail partners while holding less inventory than its competitors.

Black & Decker Hardware and Home Improvement is one of three divisions under Black & Decker, the global power tools and accessories, hardware and home improvement products and technologybased fastening systems manufacturer. Black & Decker HHI is built on innovation and is credited with being the first to bring the biometric lock and new styles to the retail market. Its product mix includes some of the top brands in locks, entry sets and faucets including Kwikset, Americas number-one selling lockset, as well as Baldwin, K2 commercial hardware, Price Pfister plumbing and bath accessories, as well as Weiser, the number-one selling lockset in Canada. With manufacturing and distribution facilities in the United States, Canada, Mexico and China, Black & Decker HHI is challenged with managing both offshore and on-shore supply chains where various products with complex product structures are produced, resulting in multi-site dependencies and lengthening lead times. As prices for materials continue to increase, Black & Decker HHI realized it needed to improve management of component manufacturing and inventory to control operational costs. After evaluating its

supply chain, the company noticed that the current system and processes were reactive and poorly integrated, resulting in an incomplete and delayed understanding of changes in demand or supply. When we looked at our pain points within our supply chain, we decided we needed to address manufacturing first, said Scott Strickland, vice president of information systems, Black & Decker HHI. There were no capacity planning or production scheduling capabilities. We needed to get a view of the rough-cut capacity. We also noticed that the supply chain forecasts were inaccurate and there was no planning capability at the customers distribution center or store, and no system existed to support mix analysis.

Diving into Demand

Black & Decker HHI sought out a consumer-centric planning system and went through an extensive selection process to identify the solution that would best address the companys vision and functional requirements. After holding separate functionality and software review sessions with several software vendors,
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The planning cycle time for each manufacturing facility usually took two days. This can now be accomplished in four hours. We have seen a major shift from putting out fires on a daily basis to proactively managing inventory reductions across the supply chain, explained Eijpen. Moving forward, Black & Decker HHI will finalize its implementation of JDA Fulfillment. Once the solution is rolled out, we will have full visibility into our supply chain, Eijpen added. It will ensure network optimization by integrating with other sales forecasting tools, such as JDA Demand, and it will build truly collaborative relationships internally and with our customers.

About JDA Software Group, Inc. Synching Supply and Demand

After evaluating its supply chain, Black & Decker HHI realized that it also needed to bridge the gap between supply and demand with the support of JDA. One of the key initiatives that were focusing on over the next six months is the implementation of JDA Fulfillment, explained Wilfred Eijpen, director of supply chain systems, Black & Decker HHI. Meanwhile, we have successfully implemented the JDA Demand and Master Planning solutions. The company first implemented JDA Master Planning at the plant level. The key objective was to establish sustainable operational efficiency, create supply flexibility and achieve fill-rate commitments to customers. The use of JDA Master Planning enables Black & Decker HHI to synchronize the flow of materials and resources for multi-stage and multi-site production needs. It orchestrates all aspects for enhanced productivity, control and prioritization. The solution proactively addresses the numerous factors involved in planning to maximize total inventory, improve flexibility and enhance efficiency, and will enable Black & Decker HHI to better predict and respond to changes in consumer demand. JDA Fulfillment will leverage forecast and end-consumer signals to create an optimized, multi-level replenishment plan down to the store level. This solution begins with the setting of optimal inventory policy decisions through safety-stock strategies. Next, store-level forecasts are used to determine distribution requirements that pull product through distribution centers. Black & Decker HHI will be able to generate better data integrity, providing improved forecast and planning data for buyers. JDA Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company, is a leading global provider of innovative supply chain management, merchandising and pricing excellence solutions. JDA empowers more than 6,000 companies of all sizes to make optimal decisions that improve profitability and achieve real results in the discrete and process manufacturing, wholesale distribution, transportation, retail and services industries. With an integrated solutions offering that spans the entire supply chain from materials to the consumer, JDA leverages the powerful heritage and knowledge capital of acquired market leaders including i2 Technologies, Manugistics, E3, Intactix and Arthur. JDAs multiple service options provide customers with flexible configurations, rapid time-to-value, lower total cost of ownership and 24/7 functional and technical support and expertise. To learn more, visit www.jda.com or e-mail info@jda.com.

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