Optiant, a provider of inventory optimization solutions, on October 21 announced that New Balance, a leading manufacturer of high-performance athletic footwear and apparel, has purchased and will be deploying Optiant's PowerChain inventory optimization solution within their make-to-stock product lines to optimize inventory levels and maximize profitability. Both Optiant's PowerChain Inventory and PowerChain Planner modules will be used to optimize inventory targets, improving product availability and service levels while reducing total inventory.
"With PowerChain, we can set safety stock targets, down to individual SKUs, and more closely align our inventory policies with customer service requirements," said Jodie Glennon, supply chain planning manager, New Balance. "We expect to see clear value within six months of initial deployment."
"The footwear industry deals with a mix of product styles and sizes that creates a large number of SKUs, while their traditionally long lead times can be a challenge," said Fred Lizza, CEO of Optiant. New Balance is a global company: their manufacturing facilities in the U.S. and around the world distribute to thousands of retail outlets. PowerChain inventory optimization can create a more efficient supply chain with the right stock levels in the right places at the right time. This will free up their working capital and improve customer service levels."
The traditional approach of footwear retailers ordering in bulk from suppliers and manufacturers far in advance creates a push into the retail channel that results in poor response to changing demand and a high level of obsolescence. New Balance is emphasizing the supply chain methodology used in their make-to-stock (MTS) product lines, in which smaller batches are manufactured more frequently, based on sales forecasts. Optiant's PowerChain solution will be key to a new level of efficiency within New Balance product line inventories by calculating precise safety stock targets for all product variants at the most cost-effective locations. New Balance inventory planners will feed optimized targets into their ERP system, while PowerChain Planner will automatically alert inventory managers of important deviations from expected target settings so they can react decisively to changes in real-world conditions.