Business Analytics in Action
How Hubbardton Forge Leverages RSI to Improve Results
Hubbardton Forge (HF) is one of America’s oldest and largest continuously-operating commercial forges. They design and manufacture innovative lighting solutions in Castleton, Vermont where they started in 1974. Creative designers and skilled manufacturers collaborate to handcraft premium lighting solutions. Innovative designs and high quality products are the hallmark of this company. The Hubbardton Forge motto is: “Reliable. American. Makers.” This serves as an overt reminder of the pride they take in their reliable lead times and dependable delivery performance. HF customers have come to expect great products that arrive on time, when promised.
Effectively using modern business analytics to manage inventory is critical to Hubbardton Forge consistently delivering their products, on time, to their customers all around the world. It’s impossible for traditional formula-based methods to incorporate all of the required supply chain factors to accurately determine optimal inventory levels. It is for this very reason that HF has selected Right Sized Inventory (RSI) to partner with them in meeting the challenges of modern inventory management.
The connection between Right Sized Inventory and Hubbardton Forge goes all the way back to 2015 when Steve Wiegers met RSI’s co-founder Dave Cook at a supply chain conference. Steve, now the VP of Operations, recognized how RSI’s inventory optimization solution could benefit HF’s supply chain. According to Steve, RSI has helped Hubbardton Forge to standardize planning processes, reduce administration costs, improve service levels, mitigate expedites, and unleash substantial working capital.
Hubbardton Forge’s high mix, low volume business model requires thousands of unique parts to build the wide array of lighting products they offer to their customers. These parts need to be available to support the reliable lead times and on-time deliveries that the company is known for. However, HF also has a business imperative to avoid tying up too much working capital in inventory that sits idle for long periods of time. HF was interested in eliminating the headaches that inventory imbalances can cause. Specifically, avoiding having too much inventory while at the same time eliminating the need for costly expedites to avoid stockouts. Striking the right balance between high customer service and reasonable inventory levels is where RSI is able to make a big positive impact.
One of Hubbardton Forge’s strengths is their supply chain knowledge and experience. The HF and RSI relationship is a great example of how business analytics can be used to improve operational and financial performance, even for a company with serious supply chain chops, like Hubbardton Forge.
Some of the specific benefits that Hubbardton Forge have realized from using RSI’s patented predictive analytics inventory planning and optimization technology include:
Managing inventory policy for over 7,000 unique parts managed through RSI
Supporting 2-3 week lead times for products that are 100% build to order
Eliminating need for previous homegrown inventory policy systems
Standardized and streamlined inventory planning processes
Integration with HF’s ERP system (Epicor), enabling dynamic inventory setting updates
In addition to the above benefits, RSI helped HF withstand the impacts of the CoVID pandemic. Hubbardton Forge leveraged RSI’s analytic capabilities to model inventory policies for parts more susceptible to supply disruptions. HF was able to proactively build additional inventory buffers for these parts, avoiding severe impacts to customers, even during the most chaotic periods of the pandemic. As a result, Hubbardton Forge was able to maintain delivery reliability at over 90% service level for their customers, down slightly from their normal 95%. This during a time when many other enterprises were unable even to fulfill orders.
HF trusts the inventory policy recommendations that RSI provides. Monthly inventory policy recommendations for nearly 99% of the 7,000+ items HF analyzes through RSI are accepted without modification. HF’s supply chain experts are able to effectively examine the 1% of recommendations that require additional review. RSI enables straightforward methods to identify, examine and, in some cases, adjust data for items that may have demand anomalies or outlier data points. Once data anomalies are addressed, HF always re-processes the data back through RSI. This is a testament to the high confidence they have in RSI’s predictive analytics capabilities.
In the rare instances where HF’s supply chain team needs support, RSI’s supply chain experts are available to jump in. Data connections between RSI and Hubbardton Forge’s ERP system are managed through seamless file transfers. Item master and demand data is moved from the ERP system to RSI on a monthly basis. The RSI file upload process itself occasionally detects issues with the incoming data from the ERP system which enables efficient resolution. Once processed, RSI’s results are easily loaded back into HF’s ERP system for use in ordering and manufacturing decision making.
Hubbardton Forge is not a company that takes quality and reliability lightly. From the craftsmanship and creativity inherent in their products to the care with which they deliver their products to customers, this company believes in doing things the right way. Right Sized Inventory is proud to support HF in their pursuit of bringing amazing lighting products to their customers, whenever those products are needed. Modern business analytics aren’t just for Fortune 500 companies. The supply chain experts at RSI are passionate about helping enterprises of all industries and sizes leverage analytics to improve business and financial performance. Perhaps, even your enterprise!
