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After a year of CPFR with tire manufacturer Michelin, Sears has boosted sales and profit margins while increasing the amount of products in stores and reducing the amount of inventory in its distribution centers.
After a year of CPFR--collaborative planning, forecasting and replenishment-- with tire manufacturer Michelin, Sears, Roebuck and Co. has boosted sales and profit margins while increasing the amount of products in stores and reducing the amount of inventory in its distribution centers, Sears tells Internet Retailer. “We want to drive up sales, but unless we have products in stores that customers want, we can’t do that,” says Hank Steerman, Sears’ senior manager for supply chain.
Sears collaborates with Michelin through a Manugistics supply chain collaboration application hosted by the GlobalNetXchange to get a better view of the tire maker`s production levels and coordinate that information with changing demand throughout Sears’ retail operations This has enabled the retailer to work with Michelin early enough in the production cycle to increase or decrease orders, so that Sears can assure that the right amount of particular models and sizes of tires get delivered to the stores and regions where demand is greatest.
Sears has reduced its distribution inventory levels of Michelin tires by 26%, while improving its store fill-rate by 11%, Steerman says.
He adds that, because of the success with the Michelin project, Sears has started similar collaboration efforts with Goodyear and Sumitomo tires and expects to add several more tire manufacturers. “We see opportunities to expand these supply chain processes to other areas of the automotive category,” he says.