By Karen Myhaver, Program Support Coordinator, MassMEP
According to the September 2009 issue of Managing Automation magazine, in the feature article on the Progressive Manufacturing 100 Awards (PM100) for 2009, Savage Sports Corporation of Westfield, Massachusetts is "the winner of the Supply Network High Achiever Award having started small and growing its demand planning initiative into a network-wide model of efficiency."
Savage Sports, a manufacturer of hunting and shooting sports equipment, joined manufacturers of cosmetics, burial caskets, air compressors, paper and architectural glass, to be one of the magazine’s 12 honorees. These companies received ManagingAutomation’s High Achiever, Progressive Manufacturer of the Year, and Editor’s Choice awards "for their agility, innovation, and efficiency in a tough economy." Representatives from the winning companies received their awards at a celebration during the 5th Annual Progressive Manufacturing Summit in Sarasota, Florida.
The PM100 Awards recognize 100 projects that have achieved distinction in at least one of the eight core disciplines defined by Managing Automation Media as being critical to business’ success in the years ahead. The disciplines are: Progressive Manufacturer of the Year, Editor’s Choice, Leadership, Operational Excellence, Business Model Mastery, Customer Mastery, Data and Integration Mastery, Innovation Mastery, Supply Network Mastery, and Training and Education Mastery. The winners are companies who have positioned themselves to take advantage of a rebounding economy in the future by continuing to improve their businesses and the way they do business rather than simply waiting to see what’s going to happen.
Annual sales of the Savage Arms’ Centerfire rifles increased from 85,000 to 150,000 guns over the past five years. In order to keep up with customer demand, the company needed to find a way to work with their supply chain to support growth without increasing expenses.
Bob Browning, Director of Supply Chain at Savage Arms, knew that they had achieved something noteworthy with their End to End Demand Planning System and submitted the detailed nomination papers to the PM100 Awards. He describes the project as follows, "This multi-year project is in conjunction with Savage’s overall Lean initiative and had the objective to develop a process throughout the supply chain of demand pull signals from the consumer, through distribution, manufacturing, and the supply base. Simply put, when a consumer buys a gun off the rack, we want a signal that goes all the way back to the steel mill to tell them to pour more steel."
End to End Planning
What began with simple, in-house kanban card replenishment systems initiated more than six years ago during the company’s early Lean implementation, evolved into a process that sends signals through their supply chain so effectively that today when a customer purchases a gun from the store it does indeed notify suppliers all the way down the chain of the need to replenish. The system travels from Savage’s customers to their material suppliers and keeps track of inventory levels for more than thirty participants. Savage Arms calls this their End-to-End Demand Planning System.
The extremely efficient system has allowed the company to reduce their inventory significantly while increasing sales, on time delivery, and customer satisfaction. To facilitate the new demand planning system, Savage Sports made capital investments in software development, interfaces, computers, and scanners of approximately $150,000.
There has been significant return on investment due to the End to End Demand Planning System in conjunction with ongoing Lean Implementation at Savage Sports Corporation. Some specific benefits that can be attributed to the new system are:
There has been no need to increase staff in material planning or purchasing – even with an increase in SKU’s from 300 to 500+ and an increase in units from 85,000 to 150,000 per year.
Supplier replenishment programs have resulted in reduced inventory and a one time real savings of over $1M.
FY 2008 WIP inventories decreased 30%.
Direct labor in shipping has decreased even though Savage Westfield has become the distribution center for all Savage products.
On time delivery has increased from low 60% FY 2004 to high 90% FY 2008.
Distributors attribute 20% sales growth to Vendor Managed Inventory program and increased fill rates.
Distributors see double inventory turn rates for Savage products.
Direct ship requirement from one retailer has become a service Savage can now offer to other retailers.
As success encouraged Savage to pursue more inventory and distribution improvements. they were able to initiate vendor managed inventory with eight of their largest distributors and have implemented direct ship distribution for Wal-Mart and Cabela’s, two of their largest customers.
Browning attributes much of the company’s success to the Lean culture that has developed at Savage. Every employee received Lean Training with the help of the Massachusetts Manufacturing Extension Partnership. "I think it (Lean) is really the foundation you have to work from," said Browning.
