Supply Chain Transformation

Welcome, listeners, to Season 2 of the Gains On Podcast. I'm your friendly neighborhood podcast host, Joe Davis. In this season of the Gains On Podcast, we're thrilled to spotlight something truly special. Stories from Gain's amazing customers.

This season, we highlight the experiences of some talented supply chain professionals and Gain's customers from the 2024 Gain Summit in Chicago. We had the privilege of sitting down with some of our customers and the host of Let's Talk Supply Chain, Sarah Barnes Humphrey, to hear firsthand about their experiences in working with Gaines and their experiences in working in Supply Chain. These stories showcase not just their success, but also the impact that Gaines has had on their Supply Chain journeys.

We're proud to share their inspiring achievements with you and hope that you find them as exciting as we do. In this episode, we hear from Andre Goodrow from Lawson Products. Andre is a 20 year supply chain veteran and a longtime user of Gains. We caught up with him during his visit to the Gains customer summit in Chicago.

So without further ado, here's Sarah Barnes Humphrey with Andre. Hey everyone, Sarah Barnes Humphrey here of Let's Talk Supply Chain here at the Gains Summit with Andre. Thanks for joining me. How are you?

Thanks for having me. Glad to be here at the Gains Summit again this year. Yeah, so you've been coming for quite a while. What's your favorite thing that brings you back every single year?

It's really about learning what new types of processes or new options that are available that usually come out in gains every year. A lot of times we don't take advantage of them at this time, but I think we always go back to the office, talk with executive management. provide them information of what's new and hot going on at Gains. And we've gone through different iterations of the versions of Gains.

And we're in the testing of going to X right now in the cloud. So again, a lot of stuff that is very informative. stuff that we hopefully eventually like to roll out into our organization. Well, and you can take back the data.

You can take back the options. Exactly. And present them and then it can start, you know, sort of filling the gaps in the roadmap. Exactly.

Right? Yep. Awesome. Well, why don't you tell everybody who you are, what you do, a little bit about Lawson product.

Sure. I'm Andre Goodrum, the senior manager of what we call vendor management. Vendor management encompasses everything that goes along with managing the vendor, placing POs, on -time performance, rebates, contracts, all the things of that nature while managing all the important things, right? So we also manage five, six distribution centers throughout the United States and Canada.

We have distribution centers in McCook, Illinois, here. We have one in Reno, Nevada, Suwannee, Georgia, Dallas, Texas. and then we have two Canadian distribution centers in Alberta and in Mississauga. Wow, and you said it right.

Not a lot of people get Mississauga right. I'm Canadian, so. And I live close to Mississauga. I grew up in Detroit, so I'm close enough to the Canadian border that I know most of how to say everything.

But again, we kind of, we manage 70 ,000 SKUs. And in the games world, right, that's 70 ,000 SKUs times six locations, so we're... do the math, there's a lot of skulls that we're trying to manage at any given time. We manage a hub and spoke type of distribution network, so everything, not everything, 90 % of everything that we buy is brought directly into our McCook distribution center, and then we parse it out as it is needed.

Right, okay. Wow, that's a big job. Yes. You said 70 ,000.

Correct. I can't even do that. Sounds like a lot, yeah, right. All right, so talk to me about your background.

You've seen a lot of change at Lawson. Correct. Because there's been some acquisitions and mergers, I believe. How has your experience navigating through those integrations shaped your approach really to managing operations, inventory, vendor relationships?

What does that look like? Yeah, so I've been with Lawson Products for a little over 10 years now. When I first started with them, I came on as a senior buyer. I came from a company where I managed a thousand SKUs, and I remember the first day of the job 10 years ago, here you go, here's 25 ,000 SKUs, and you're like, whoa, right?

So, progressed through the organization, right about the time we brought in gains, eight, nine years ago, I became the demand planning manager, so did that for a couple years, then moved into purchasing manager role, sourcing, back to purchasing, back to sourcing, you know, so it's been, a nice journey because you get to kind of see all of the parts of supply chain. The only part I haven't worked in is logistics, but have a decent understanding of that. But you're missing a lot.

Yeah, right. Being part of logistics. I mean, that's my background. I can say that it's maybe the most fun.

The most glamorous. But to your point, integrations, we've gone through a lot of integrations over the past five years. Not everybody we integrate into our ERP system. We still have some companies that we leave the standalone.

But everybody that we try to integrate into our SAP environment, what we find challenging is getting good data. Good data comes in. You can produce much better demand plan going forward. Crap data, honestly, right?

It's a challenge. And the last one that we integrated last August, as we were pulling all the data out of their system, their old ERP system, we found challenges that a lot of unit measures weren't correct. skews, multiple skews, cross -referenced together, carrying double inventories and multiple distribution centers. So it's been a challenge, but as we work through our product management teams and those in the distribution centers, again, it's really about getting good data.

Good data is what really drives our business, and if we have poor data, we're going to execute poorly. And what we have put an emphasis on, on the... companies that we've acquired this year is is getting that really good data and I think the organization rally now is looking at it before they make the move to acquire that there is good data there because we have found out in in past as I mentioned that It's taken us multiple years to get through to understand. Is the data finally good?

Yeah, well in acquisitions, you don't want it to take No, exactly, because again, we're at that point, we sell lots of nuts and bolts. A quarter inch screw we had in two different skew locations, under two different skews and they're the same exact part. So really trying to understand up front, get that cross -surfacing done first so that we're not carrying multiple skews with the same actual, same physical item. across multiple locations.

And occupying a lot of people's time and space to do that, right? But you also have to all be on the same language. Correct. As well.

You have to name something the same thing across the board. And I'm sure you've found that as well. Very challenging. Even with nuts and bolts that, you know, one company might name it this, you might name it this, or maybe the name before the size.

There's a lot of code that goes into the the integration if you if you do seem to want to go that route is again There's a lot of I think our our product management team spent months And in the cross -referencing phase and understanding and for us again in nuts and bolts there has to be traceability Yeah, so if you're putting in Co mingling stock and there wasn't a traceability on the old stock, then you've got some bad inventory that you really can't put into the market. Well, and that's a really big point on traceability because customs is really cracking down on understanding where your products are coming from when they're coming into the country.

Or bringing it back into the country. Yeah, and what that actually looks like. So traceability is a huge component. And if that's going to take you months to years, that's going to be hard.

You're going to get rejected at the border. Exactly. Wow, okay. So now Lawson was one of Gaines early adopters, then moved away from the platform.

So what drove the decision to bring Gaines back in and what were your initial expectations? I think really, again, part of that conversation that I remember yesterday is sometimes the IT forces that stuff down your throat. And that was the case with us. It happened before I got there.

I know they were on, Lawson Products was on Gaines, two or three years prior to myself joining and then a year before they switched back to SAP. And again, I think they were going with an upgrade and SAP can do everything and we quickly found out that was not the case. In the world that we live in, against 70 ,000 SKUs, we really rely on an accurate forecast. We want the right product at the right place at the right time.

And what we noticed was the way that we were forecasting on SAP was not advantageous to us. too much product in a location, not enough product in other locations, and it really led to poor service to our customers in that aspect. But again, right about the time that I became the demand planning manager, we were forecasting, we moved out SAP, we moved into Excel spreadsheets. No.

We have a lot of seasonal product. I can see the stress. Oh, it was... What do you say?

It was... Our forecast accuracy actually increased a couple of percentage points by moving on SAP into Excel. But again, with the sheer volume of SKUs that we're trying to forecast, it's impossible. You couldn't do well.

So we brought games back on. And again, we had an executive team that had seen it before. It was a much easier sell this time around to bring it back. But I think there's a lot of things that games provided to us in an inventory optimization.

specifically compared to SAP, but our forecast accuracy jumped 30, 40 points after moving into SAP, or moving into games, I'm sorry. And we've seen multiple iterations of, again, how do we use inventory sharings, the dynamic calculations of our service stocks, things like that that really helped us allow us to optimize and put the right amount of product in the distribution centers. And we've been running ever since, and there's no looking back at this. I hope, I mean, I don't make those decisions, but everybody on our team loves using it, the way that it's set up, the simplicity of being able to create footers and understanding what our year -to -date sales are while we're buying and forecasting.

And really, it's a very intuitive tool. I mean, SAP was so rigid, and everything that you have to do, there's... one way to get to from start to finish where gains, we feel like there's a lot more options available to us to be able to do our job. Well, it sounds like it, because I think you're using more than 30 different forecast models with gains.

So talk to us about how that's changed the way you manage that stock and the inventory. Sure. So again, pre -gains. We kind of use a weighted moving average utilizing the last two or three months being the most heavily weighted on Producing our future forecasts again.

That doesn't work in a seasonal product But moving to gains it really again it it allows us to Utilize the data more encompassing data where you we're looking at 36 months of history where we were utilizing the last six months So then how is GAINS helping you to manage those vendor relationships? Yeah, I think what What allows us to be successful in our role is is using the data that GAINS provides to us And providing that information to our suppliers. We like to over communicate with our suppliers so that there are no surprises in the future generally for again we use the 80 -20 rule, the top 80 suppliers in our organization encompass, top 100 suppliers in our company encompass probably 95 % of our spend.

Those suppliers of ours, every month we try to send, we don't try, we do send them forecasts so that they understand what our needs are. In the short term, in the long term, there are no surprises. Again, we try to overshare that information with them so that they're prepared for what our need is. They can start procuring products on their end or raw materials on their end to ensure that our delivery dates are adhered to.

Well, and that's what we need, right? I think we found over the last couple years over communication is better than. None and that's how we collaborate and we create partnerships and correct. That's what we need.

It's not a push -pull relationship It's got to be that we're working together exactly and we kind of again we went from a buying Purchasing team to more vendor management team to start to utilize and create Those more strategic partnerships with suppliers that again For them we may be a transactional customer to ours But they're a very large supplier of ours and we want to again share that over share that information get on monthly calls, buy monthly calls, just what's the state of the business?

And we are able to utilize that information out of gains. And what we've seen is service levels have improved from certain suppliers that have may have been poor performers in the past, now have raised the ranks that they're in the top 25 % of on -time performance. And for us, the amount of SKUs that we sell or stock in all locations, it is crucial for on -time performance. If we're late, If a supplier is late to our doctor by 10 days, we're late to all the distributions and replenishing their stock by at least 10 days.

So again, it is. It really is. And for our business, once you're out of stock in a certain location, it starts a snowball effect until you receive the new product in and distribute it back out to the distribution center. Absolutely.

Now earlier you talked about forecast accuracy and how Gains has given you 35 to 45 percent, I believe, right? Right. Increase. Yep.

What has that, how has that sort of impacted the organization as a whole? I mean, we all know for supply chain, that's a big win. It is. But for an organization as a whole, because when we invest in technology, it's got to be a buy in from the whole organization.

And to be able to have that win for one department. would also translate into the rest of the organization. I'm just interested to know how. Again, in all respect, it's the amount of inventory you're carrying.

Capital cost with that? Right. And we're big in the working capital. So while our sales reps would like us to carry $100 million worth of inventory, I probably wouldn't be sitting in this chair if we were, right?

So again, it's... It's understanding the trade -offs of not having product in the right place at the right time. We're in an organization, an MRO distribution company. Our value proposition is more of the vendor -managed inventory as opposed to a great juror fast and all who has storefronts.

Somebody could walk in there real quick to grab something. Look, if we don't have the product, that's where our customers are going to go for it. And we pride ourselves on maintaining good forecast accuracy because if we do, we know we're putting the right product in the right place at the right time. And that is kind of a motto we live by.

The other one is we aspire to be our customers first choice, right? And having that inventory at the time and their need is driven off of the sales forecast or sales history, right? And as long as we can maintain and understand historical all -liers, I know that's a big function we use in the demand planning space is understanding. So 100 a month, 100 a month, and an order comes in for 10 ,000.

we can drill in and understand what sales order that is for, what sales rep is responsible for that, and reach out to them. Understand, is this a one -time sale? Can we smooth back down that demand? Is this an ongoing customer?

If we don't catch up to that, we're never gonna have the proper stock in place for that customer to continue to come back and order. So again, allowing us to drill a lot deeper into sales orders, find the reps who are responsible for those large increases, can really understand and work with sales reps. And again, we utilize a couple other tools, so forecast request form. If a new customer comes on, they provide that information to us.

We get the incremental demand loaded, prepare for that. And that's what we try to stress a lot is, well, we're not as complex as a lot of the other organizations here in SNOP and IBF and stuff like that. We really try to work with our sales reps to get the information out there. They're the ones that are on the streets.

They're the ones that are selling the product. Working with them and have a two -way communication with our sales reps really helps us be successful in our job and allows us to have the sales reps sell the product when they need it. Well, and it's kind of gold, right? Because sometimes sales reps feel like we kind of leave them out to dry.

Correct. And so if you're able to work with them directly, I'm sure they're feeling like part of the team and that it's a collaboration. They feel more included. Environment.

Yeah. Yeah, and that they are confident in going and speaking to a new potential client or a new client Offering and and what they're speaking to they can be confident that that we have product stock They'll get it in two days. Whatever it may be again. I think it It is really a two -way street when it comes to that because there's a lot of times where sales rep will say We need 15 ,000 of these we go and buy the inventory and it sits on the shelf for a couple years So then you lose some trust But also again if reps are providing us that information and it really does come to fruition It allows us to trust them a lot more than we have in the past and vice versa.

It's a two -way street, right? But also if you have the right data You can make those decisions a lot more quickly than you used to before Where you would bring in the inventory and hope exactly and now you don't have to All right. How important is simulation and scenario testing? Good.

It is. Earlier this year, our task at Lawson was really, how do we drive out large chunks of inventory? We were sitting pretty heavy. Again, a lot of it still COVID -led.

We bought a bunch of inventory a couple years ago. And how do we not replenish that stock? How do we utilize? Excess stock in other locations or bring it back to delay some buying but part of what my boss senior director came to Ben Ben Sprout and and others at games was how do we run a simulation to help?

Utilize the inputs and gain to drive out inventories. How about a lowering service levels that you're trying to maintain on C and D items again a D item We're not gonna stock all the time. Right. It's a D item for a reason same with C items So lowering service levels on things like that allow us to inventories drain a little bit before we start to reorder or even letting it go out of stock, knowing full well that supplier has a two day lead time.

We know we can turn around product rather quickly, but I think it provides, you know, we were just out there with Beau explaining the simulations, right? It allows you to understand and look at different data points and say, this might not be the right decision, this one might, but it allows you to have more information at your fingertips to make those informed types of decisions. I think it's fun. It is, it's cool to see how you can tweak something and see the effects of the downstream effects.

And again, we utilize a lot of the data to correspond with our operation teams in the distribution center. Hey, here's what you look to receive over the next six weeks. Labor needs to be brought in or can be reduced. Things of that nature allow you to be more proactive in advance of something.

That's the gamer that came out at me. I was listening to you. I was like, there's some gamification in there and that sounds like a lot of fun. So now you've you've undergone a few acquisitions, I think, at Lawson.

It's really has been in the past kind of difficult to bring everybody together. All the data, all that kind of stuff. How has Gaines supported you in bringing everybody together? in collaboration and making it a lot easier for you to do that.

Again, it's having the data tip at our fingertips is really, we're going through another one right now and it's trying to identify synergies as well, right? So we just acquired a MRO distribution company up in Canada. Yes, right? Oh, Canada.

So how do we pull the data and say, here's what we Again, what we're forecasting, we utilize same suppliers. How do we utilize the data that we have in gains to provide to our future partner to try to create synergies in buying power? That's important. It is, right?

So again, think of two organizations buying something at a different cost, each buying a million units a year. Well, if you can combine buying power into a million a year. Exactly, right? So I think A lot of the stuff that we have is readily available.

Again, we can pull that data. We can use the query builders. We use the mass uploads. We use a lot of the functionalities and gains that, again, when somebody asks, we can get that data out of gains in minutes, seconds, if you will.

Sounds amazing. So looking ahead, what technologies, what innovations are you excited about implementing into your operation? I think the one that we learned about yesterday really was the dynamic lead time calculations. Again, we use static calculations and depending on a supplier, those may change, whether for the better or for the worse.

We generally don't find out until a product shows up 30 days early or 90 days late. Again, part of the vendor management that we utilize and having the conversation with the vendors is always constantly kind of checking up on lead times. I think the lead time, the dynamic lead time calculation part of that would be super beneficial to us because again, if our system says it's 90 days and suppliers routinely delivering in 75 and they don't provide us that information, the system will start to utilize that information and drive your buying.

patterns for you, as opposed to, hey, our lead times have increased from 90 to 120. Well, maybe they don't even know. And that's, again, we don't usually find out until we're using a supplier scorecard and understanding, but the aspect I like of this is it really does it dynamically for you. And in real time, it sees you issued this at 90 days, it's actually showing up at 60, so on and so forth.

It'll adjust it. And again, if we're buying it 90 days and it's really 60, we're buying 30 days of initial product every time we order, and as we try to get leaner with our inventories, this is something that I think helps drive us in the right direction. The other things is the AI, obviously in the world today, AI is a big thing, and machine learning, and again, for the sheer amount of SKUs that we sell, forecast, purchase, stuff like, AI and ML seem, Like the right option for us and let the system Utilize all the information behind the scenes to make calculated and informed decisions for you Allows people to spend more time doing strategic type things as opposed to a lot of the tactical work that we do now So it's again.

It's it's how do we go back to? To our office and sell this to everybody there is the biggest challenge that we face after that come in here for the last seven eight years But I know it always stays on top of their heads where we work routinely with our games guy, Jack, and he's always kind of saying, hey, what do you guys think about this? Should we do this? And really, as we continue to grow, I think it makes a lot more sense for us to get into these types of things.

Well, and I think about the conversation around with the vendors, right? And I think how much better you feel going into the conversation with a vendor when you can say to them, Your lead time is 90 days, but you've actually been delivering to us in 60 to 70 class Which is amazing. Yes, it's and it depends on your supplier, right? If it's a if you're buying 10 million hours worth of product That could that extra 30 days could be a lot of money.

All right, if you're buying pennies worth of products It may be a couple thousand dollars worth of product. But again, ultimately our goal is How do we maintain a proper level of inventory to service our customer at 98 % same day order line fill? How do we get to a level to, again, there's diminishing returns of putting too much inventory in, but also. Well, what it means to them too.

Exactly. Because they can now go to their other customers and say, well, actually. A lot more people will be happy, right? If you can reduce your lead times by 30 days by the system.

Seeing and recognizing that type of stuff. I think that's fascinating. Amazing. Amazing.

All right So last question as you continue to innovate and grow what advice would you give to other? organizations companies supply chain leaders to optimize their supply chain look we When we first brought it on I didn't I didn't it's just another tool right and We've really seen the first of the labor. I mean you sometimes expect a rollout, an implementation from somebody, a software company, and six weeks later, they're gone. It's cost you money to talk to somebody.

I can get Ben on the phone and he'll call me back. If he doesn't answer, he's calling me back in two hours. Jack, same thing. The level of customer service that Gains provides to us is top notch.

But also, again, It's all about the inputs that you utilize in gains, inventory carrying cause, service levels. You're the one that physically determines what you wanna put in the system. And again, utilizing simulations, you can understand what types of inventory you're gonna carry. There's just, honestly, there's so much that we utilize gains for that you're missing out if you don't.

You really are. And to see, again, come in here for the last eight years, Eight years ago, there was no talk of AI, ML, dynamic lead times. Really to see every year how much they roll out and try to bring to the market for their customers, it's exciting. It's awesome.

It's really cool to see that, again, they're a company that doesn't want to stop learning. They want, how do they continue to be the best of the best and get to the level that let's see their customer base grow by double, triple, quadruple, whatever, maybe. Well, and don't forget, simulation is just fun. Yes.

It is. Right? It brings fun to our everyday. Absolutely.

Well, Andre, thank you so much for joining me here at the GAINS Summit. Awesome. Thank you for having me.