ToolsGroup Launches ‘Service Optimizer 99’ Software to Support Growing Number of Companies Seeking to Achieve Top Service Levels
BOSTON--Industry-leading companies are breaking through customer service-level barriers and achieving fill rates above 99 percent, increasing top-line revenues and meeting heightened customer demands. To support this drive toward a higher standard, ToolsGroup, a global provider of demand-driven inventory optimization solutions, today introduces Service Optimizer 99, enabling companies to outperform by achieving record customer service levels.
At least seven global industry leaders are already achieving 99 percent or higher service levels assisted by ToolsGroup technology. One, a Fortune 500 consumer packaged goods company, improved fill rates to above 99 percent in one division while simultaneously reducing average finished goods inventory by 25 percent.
A second ToolsGroup client, one of the world’s largest confectionery companies, achieved 99.6 percent service while simultaneously generating more than $7 million in inventory savings (more than 12 percent) in the first three months. Other companies that reported achieving 99+ percent service include a multi-national oil company and a wholesale distributor of electronic parts and equipment.
Achieving superior customer service levels has proven to be both strategic and profitable for these early adopters with benefits that include:
- Top-line growth and increased margins driven by fewer lost sales
- Higher forecast accuracy for improved supply chain execution
- Stabilized supply chains with less working capital and less expediting
Industry analysts welcome this new performance standard and say service-level excellence is a top priority for today’s leading companies, aligning with a recent survey of supply chain executives by ToolsGroup.
“Companies must drive global supply chain performance through consistent customer service metrics. Subordinate all other metrics under this key metric,” says Tim Payne, from the March 31, 2006 Gartner Report, “Five Key Themes for Balancing Customer Service with Efficiency in the Supply Chain.”
“Improving customer service levels has been identified by the majority of customers (56 percent) as the top pressure for improving the inventory process,” added Nari Viswanathan, research director, supply chain and logistics, Aberdeen Group, based on a recent Aberdeen study. “In addition, fully 82 percent of surveyed respondents say it is highly important to their company to increase service levels without increasing inventory investment.”
ToolsGroup’s cross-industry survey of more than 200 supply chain professionals and operations managers echoed analyst sentiment. It found more than half the companies surveyed were focused on improving customer service rates, with most important reasons being; achieving service level agreement (SLA) targets, increasing margin to the top line and improving market share.
What has held companies back in the past from achieving 99+ percent customer service has been a combination of poor forecast accuracy and incorrect safety stock calculations. Persistent forecast bias and the inability to correctly allocate the forecast to a daily, Stock Keeping Unit (SKU), and account-location level, have caused high daily forecast error. This, combined with widespread use of obsolete and inadequate inventory modeling, has lead to frequent stock-outs and excess inventory.
ToolsGroup’s new Service Optimizer 99 addresses this problem head-on through Forecast MicroAllocationTM, which transforms demand plans into highly detailed forecasts, accurately allocated by day, SKU and account-location. Combined with advanced statistical inventory modeling and mix optimization, it helps companies drive service levels up to 99 percent and above, while improving supply chain stability and reducing overall inventories.
“There is a clear gap between planning processes and daily execution at companies today, which causes a lot of manual interventions and inefficiencies,” said Joseph Shamir, CEO of ToolsGroup. “Service Optimizer 99 carefully bridges that gap, making 99+ percent service levels possible.”
To hear supply chain professionals at a ToolsGroup client company describe experiences in achieving 99+ service levels, attend a special re-broadcasted Consumer Goods Technology Web seminar on Wednesday, Sept. 19, 2:00 p.m. ET. To register and attend, visit: https://consumergoods.webex.com/consumergoods/onstage/g.php?t=a&d= 488170745 (Due to the length of this URL, it may be necessary to copy and paste it into your Internet browser's URL address field. You may also need to remove an extra space in the URL if one exists.)
About ToolsGroup
ToolsGroup is an innovation partner for companies who want to achieve outstanding customer-service levels, top-line growth and improved forecast accuracy with less global inventory. Our customers improve daily forecast accuracy and correctly set safety stocks to achieve up to 99+ percent customer-service levels. ToolsGroup’s flagship Service Optimizer 99 platform with Forecast MicroAllocationTM, transforming demand plans into highly detailed and accurate daily forecasts, allocated by Stock Keeping Unit (SKU) and account-location. For more information on ToolsGroup and its solutions, please visit www.ToolsGroup.com.
