1. Managing the Long Tail Ed Goetting – Director of Sales & Operations Planning Oct 2016 APICS / VIA Meeting

2. About Solo Cup/Dart Container

3. SKU Proliferation 20,000+ SKU’s total 11,000 legacy Solo Causes:
Marketing differentiation
Material substrates
Environmental
Special prints
Private Label
Custom packaging
Merger activity
Manufacturing complexity
PET, PP, PS, PLA
Height of nesting rings,
Rim diameter,
Lid application
Case Packs, Combo Packs
Bottom Embossed, Non-Embossed,
Ounce/Milliliter Capacity

4. Dealing with the Long Tail at Solo
S&OP formally introduced at Solo in 2010
Emphasis on inventory reduction, fill rate improvement, supply/demand matching, and forecast accuracy
Focus tended to be on large volume items
Cross-functional SKU Rat efforts
Used ABC methodology in Manugistics – static # of days, based on volume
C&D targets were insufficient for many low-volume items

5. New Challenges from the Dart Acquisition
Dart acquired Solo in May 2012
Case Fill Rate Target increased from 98.5% to 99.6%
“One Truck One Invoice” (OTOI) initiative will increase distribution of Solo product from 9 distribution points to 21
Legacy Solo products:
MTF w/ Fcst: Increase from 11,000 to 20,000+ SKU’s
Existing ABC methodology not sufficient in the new environment

6. Implementation of MEIO
Multi-Echelon Inventory Optimization (MEIO)
Multi-Echelon - Evaluates stocking policies and levels across Raw Materials, WIP, FG at various stages of distribution.
For the purposes of the OTOI project, we limited the scope to FG at buffer warehouses and forward-deployed warehouses.
Targets a specific service level outcome which can also be tailored to focus on particular customers or products
Statistical Safety Stock model considering demand and supply volatility
Previous Methodology
New Methodology
Advanced Planning System
Safety Stock set by volume (ABC)
Arithmetic
Buffer DC’s used for overflow
MEIO
Safety Stock set based on demand/supply volatility and replenishment parameters
Statistical
Optimized for 99.6% fill rate
Buffer DC’s used to reduce total inventory requirements
Extract Master & Transaction Data
Import Results

7. Example SKU’s
412TN/2111 at DC041
Fcst = 1.0 cs/day; dmd variability = 3.2; 49 orders in 2014; Statistical SS Target = 28 days
New SS Target
Old SS Target
GSP49/JR505 at DC052
Fcst = 1.2 cs/day; dmd variability = 9.5; 7 orders in 2014; Statistical SS Target = 155 days
New SS Target
Old SS Target
Both items are “C” items with a prior Manu SS target of 21 days

8. Optimization Results / Next Steps
Current network: Can achieve 99.6% with significantly less inventory
New statistical targets recently implemented at all locations and categories
New network: Increase from 9 to 21 distribution points will require more inventory than optimized current network, but still less than existing inventory
Running parallel environments for the current network (pre-OTOI) and the new network (post-OTOI)
Implementing current network targets in Manugistics for deployment and short-term production scheduling
Implementing new network targets for longer-term production planning and capacity models
Using combination of current and new network targets to help plan/execute OTOI moves
Currently transitioning to a new prod planning system – S099 will remain as bolt-on

9. Dart Container Corporation Director of Sales & Operations Planning
Thank You
Ed Goetting
Dart Container Corporation
Director of Sales & Operations Planning