Supply Chain Performance

How Chatsworth Products Manages Supply Chain Disruption

On a recent SourceDay webinar, two members of the Chatsworth Products team—Jonathan Peters, Director of IT, and Spike McBride, Senior Director of Materials and Logistics—shared their preparation for managing supply chain disruption. Like many other organizations, they have spent the last few years focused on improving the efficiency and resilience of their supply chain. 

SourceDay CMO Sarah Moore opened the webinar with a brief survey that captured just how significant the challenges of supply chain disruption are on a regular basis across companies:

  • The business impact of COVID-19 has been manageable (90%) or major (10%). 
  • The vast majority (89%) of the respondents have been managing all of the changes via emails, phone, and spreadsheets sent back and forth to suppliers.
  • 78% have seen all of the following types of changes: moving product in because of demand spikes, pushing orders out or cancelling them because demand has softened, and even production facilities that have been forced to close in response to stay at home orders. 

Even without the exceptional disruptions of 2020, something as seemingly straightforward as PO acknowledgement remains a challenge. 56% of the respondents reported that they don’t know how many of their supplier POs go unacknowledged, and 44% said that up to half of all their POs are unacknowledged.

All of these challenges have broad business implications for company financials, operational performance, and IT systems burden, and the Chatsworth Products team was all too familiar with them. 

Financial Impact of SourceDay

Historically, Chatsworth struggled with too much work in process (WIP) inventory on the floor, leading to late deliveries, damaged product, and unnecessarily tied up cash flows. Once they integrated their Epicor ERP with SourceDay, they saw late deliveries go from 35%+ to 10%, and WIP has been cut by 66%, improving customer satisfaction and reducing the stress level of the Chatsworth team. It was also an opportunity to cut costs, as many of their contracts contained expedite fees, requiring Chatsworth to bear the burden of accelerated shipping services.

Less inventory on hand not only freed up Chatsworth’s cash flow, it literally opened up their facility. They have reclaimed 90% of their warehousing space and converted it into manufacturing floor because of the way they are now able to optimize their inbound materials.

Achieving Supplier Collaboration at Scale

When Epicor announced that they were discontinuing their supplier portal, Chatsworth not only went looking for a replacement, they took it as an opportunity to reimagine how they collaborate with suppliers. With an extremely busy IT team, they needed a solution partner who could facilitate the implementation and supplier onboarding process. Chatsworth’s Epicor ERP was integrated with SourceDay in a matter of days, and their suppliers came online quickly as well, starting with a few handpicked key companies.

Chatsworth obviously appreciates the ability to increase transparency and improve communication with their suppliers, but those suppliers appreciate it as well – something they have been very vocal about since their onboarding.

Powering “Hyper Growth”

Chatsworth has not only been streamlining and improving their business processes, they have been on a “hyper growth” track as a company, leaving their historical supply chain chaos behind. As a 100% employee-owned company, each person has an added incentive to improve process efficiency. They have also acquired two new companies since their implementation, and both are eager to get SourceDay in place to manage their supply chains as well because they have heard about the benefits already realized. 

Chatsworth has optimized their planning and buying decisions, reduced their warehousing footprint, and increased their manufacturing capacity – all because of the decision they made to manage their supply chain through SourceDay. This has also empowered them to deal with large-scale disruptions to their supply chains in a way that doesn’t mean falling back on excessive stores of inventory. 

To hear the full Chatsworth Products story, catch the full webinar recording here

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