CASE STUDY - Inventory Optimization Solution
HNI Achieves Fast ROI with LeanDNA Inventory Optimization Platform
“We want our team members to focus on value-added activities. When you’re spending most of your day just getting the information you need to do your job, it’s not productive for them. It used to take 12 different screens to get their information, and now with LeanDNA, we get everything we need in one place”
—Jay Senatra | Director of Supply Chain
Focused on providing high levels of quality and customer service, HNI over the last 75 years has grown into a global leader and premier supplier of office furniture, fireplaces, and heating stoves. With a team of expert analysts and managers, the company manages 400 suppliers and procures 400,000 different parts. As a leading manufacturer of business and residential building products, HNI’s highly complex manufacturing process is about 95% build-to-order with a high number of SKUs and customizable options.
HNI began exploring LeanDNA’s analytics platform with the goal of finding a solution that their analysts could utilize to easily identify issues to proactively plan and respond faster when they arise. LeanDNA’s platform improves on-time delivery, optimizes inventory and reduces operational costs by aggregating, sorting, and organizing complex data sets automatically. By leveraging LeanDNA, HNI was able to save time, money, and resources by alleviating the cumbersome task of manually exporting and analyzing stale spreadsheets
The Challenge
Managing Complexities for Two Distinct Challenges
HNI had two distinct challenges to address:
Inventory Optimization Techniques
HNI analysts are overloaded with the cumbersome task of manually managing disorganized, hard-to-digest, complex data sets through traditional spreadsheets “Our analysts spent a lot of time getting the data cleaned up so that we could actually use it”, Senatra explained. “As we re-analyzed our parts year after year, it was taking us 3-4 months to manually go through all 400,000 parts.”
Supply Chain Execution
The company’s seating business alone uses 50,000 different fabrics that customers can buy. HNI also offers several thousand different finishes for all of the wood desks, credenzas, filing cabinets and other products that it makes. “We offer a lot of special, unique and different designs across our product lines,” said Senatra, “all of which add to the complexity of our operations. Our analysts were spending 80% of their time cleansing and massaging the data, and 20% actually analyzing it and making decisions. We wanted to flip that.”
The Solution: Introducing the Inventory Optimization Platform
LeanDNA Handles the Math
HNI integrated LeanDNA’s inventory platform to alleviate their challenges by reducing manual processes so their employees can shift their focus to higher valued tasks and operate more efficiently to increase on-time deliveries for their customers.
By using this advanced technology, HNI was able to proactively manage inventory and minimize the impacts of shortages to save money and resources.
“We now have days or weeks to solve the problems before they happen versus having to solve the issues after they’ve occurred. We can get a sense of where the trend is heading and get in front of it.”
—Jay Senatra | Director of Supply Chain, HNI
LeanDNA’s platform has helped prioritize exception alerts by relevance to save time and allow the procurement team to focus on higher valued tasks such as PO management, exception management, inventory strategy, and delivery, and plan for every part (PFEP) governance.
The procurement team benefits from the platform through its automated filtering of excessive, unnecessary alerts. “Now LeanDNA handles the heavy lifting – You just open a report and the shortage list is right there.” Through this feature, the team reduced repetitive tasks which saved them time and enabled them to focus on more important matters.
The Results
Impacts of Efficient Resource Management
LeanDNA provides comprehensive shortage visibility which allows HNI to accurately assess, identify, and manage inventory to improve on-time delivery.
“LeanDNA has also improved supplier on-time delivery and provided better visibility into which parts are falling below inventory targets. The system was fairly easy to get up and running, which can be attributed to HNI’s quickly achieved return on investment (ROI).”
—Jay Senatra | Director of Supply Chain, HNI
Since implementing the platform, the company has already achieved significant results with plans to continue enhancing processes by identifying and addressing demand spikes that are 3x the standard deviation greater than the mean. “We’re incrementally building one process on top of the next,” said Senatra, “knowing that if we keep suppliers’ inventory healthy, we won’t need to worry about whether they can deliver on time. As long as we have the inventory, we can hit our own order dates.”
The company is currently using application programming interfaces (APIs) to integrate additional applications with LeanDNA to further improve other areas.
Key Metrics
- 20% improved on-time and completed shipment rates
- 400,000 different parts
- $600 million in annual spend
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