New software drives ‘true value’ for hardware store giant, including inventory reductions
True Value is optimizing its inventory levels and replenishment efforts with a new demand forecasting solution.
True Value, a Chicago-based distributor of hardware, built its reputation on learning how to anticipate customer demand. But when the company needed a more accurate way of replenishing inventory based on actual customer buying trends, particularly for highly variable categories like seasonal, weather dependent and novelty items, True Value embarked on a strategy to revamp its demand planning and replenishment processes.
By adding JDA Demand, True Value gained a single, accurate, enterprise-wide view of customer demand. More granular forecasting capabilities drill down to the hourly and item levels, driving more dynamic and variable demand categories. Previous systems would miss trend changes and the opportunity to adjust demand forecasts.
Since deploying JDA Demand, True Value has seen millions of dollars in inventory reductions, while sustaining an industry-leading first-time fill rate and improving turns on its inventory investment. With fewer stock-outs, True Value can deliver a better customer experience, leading to increased sales and satisfaction, according to the company.
“We needed a better way to predict demand more accurately,” said Lyndsi Lee, divisional VP of inventory and global sourcing, True Value. “JDA has surpassed our expectations and been a true partner, driving inventory reductions we can choose to reinvest as well as improving our ability to forecast demand.”
True Value plans to expand its JDA footprint this year with a replenishment planning module that will not only forecast demand changes more quickly, but also react and replenish faster, according to the company.
The deployment of the solution coincides with True Value’s overall growth strategy. In the spring, the company sold a majority stake to Washington D.C.-based private equity company ACON Investments. Through the deal, ACON Investments now owns 70% equity of True Value Company. Current True Value members kept 30% equity, and received a $196 million cash payout.
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