Stocked for the Seasons

Unlike merchants that are primarily bricks-and-mortar stores with complimentary web sales, catalog call centers with minimal retail space or some combination of the three, Orvis truly does it all. The retailer splits its sales “pretty evenly” across all channels, says Mark Holmes, the company’s vice president of information services and liquidations, in addition to offering a wholesale arm for a number of small fishing dealers and a mirror image of those channels in the U.K.

“We’ve grown to the point and in a way that our mix is really complex,” Holmes says, “and the complexity itself was totally overwhelming our old legacy system. It wasn’t terrible, exactly, but there were situations where we just couldn’t get our arms around the whole picture.”

Case in point: Every year prior to fishing season, the folks at high-end sports equipment and apparel retailer Orvis started worrying that they’d have enough supplies on hand. The tendency was to think, “We’ve got to load up” on items like fly fishing line, rods and reels. Multiply that by the number of channels the company operates, and the inventory would swell pretty quickly.

A new set of analytics tools, combined with internally developed decision support systems, has helped Orvis see its total needs across the business and better plan purchasing decisions. These days, Holmes says, the company has “the visibility and the confidence to make the right decisions” in terms of product purchasing and retail replenishment.

These new tools are part of an Advanced Planning suite of solutions offered by Atlanta-based Manhattan Associates that includes planning and forecasting, replenishment, multi-channel assortment planning, cross-channel inventory planning and warehouse management for open solutions. And its need was not only evident in terms of the seasonal fishing business; the company also was dealing with the challenges of being a multi-channel retailer.

It wasn’t that uncommon that an item would be back-ordered on the website while it flowed freely to a retail store, or that additional products would be purchased for an arm of the organization in the U.K. while the same products were being liquidated in the United States.

Manhattan Associates came to the table with relevant experience: In addition to working with other multi-channel retailers, it offers solutions that are based on meeting the needs of retailers first.

“Retailers are all about volume and service,” says Rod Daugherty, senior director of product strategy for Manhattan Associates, and “things that come from the manufacturing side of the equation can get clunky when you try to transfer them to a retailer.”

The Manhattan Associates solution is deployed as a holistic plan rather than a segmented one; it “optimizes inventory for all of the supply chain” because “any change in a SKU component or lead time — a change to a forecast or a sudden change in the balance that needs to recalculate the SKU all the way up or down the supply chain within that enterprise — needs to happen right now. You can’t just rely on a planning tool or static plan anymore. That’s just a recipe for not meeting service.”

Across the industry, retailers are becoming “more sophisticated in their selection process and realizing that they can no longer do it all themselves,” Daugherty says. In theory, anybody can maintain service by buying massive volumes of inventory, “but that’s not a good business paradigm and you’ll go broke doing it. When you enter multiple channels, you’ve got to figure out what the service policy is for each” channel.

Orvis, he says, “is very specialized — it’s not like going to the grocery store to buy Bayer aspirin, not finding it and getting a generic instead. They serve a very sophisticated clientele in terms of fishing, so they have to maintain a very high service there. That can equate to high safety stock.”