Case Study: Stanley Black & Decker achieves Six Sigma service levels and reduced safety stock with Demand Solutions' Service Level Optimizer

The Stanley Works Latin America achieves excellence in safety Stock Program

Stanley Black & Decker’s Latin America distribution operation faced pressure to raise service levels while lowering inventory across a catalog of more than 1,000 items and a six-week safety-time policy. Management singled out about 50 “never out” and high-priority “hot” SKUs that required a 100% fill rate, and sought a way to optimize safety stock rather than treating all products the same. They engaged Demand Solutions and its Service Level Optimizer (a feature of Demand Solutions Forecast Management) to test a data-driven approach.

Using Demand Solutions’ DS Forecast Management and the Service Level Optimizer, Stanley Black & Decker grouped items by demand, set service-level targets, and recalculated safety stock recommendations. The project reduced inventory (allowing a burn-down to optimized levels) while maintaining or improving service: about 18% of Miami inventory represented 80% of demand, and of the 50 “never out” items only one missed the 100% service level (in two months with no forecast). The initiative led to Six Sigma certification in December 2004 and demonstrated measurable safety-stock reduction without sacrificing customer service, validating Demand Solutions’ optimizer.

Stanley Black & Decker

Gerry Toomey

Sales Planner for Stanley Latin America