Users say that IF/SO is straightforward and easy to learn
In the direct-to-customer business, efficient inventory management is the key to customer satisfaction, cost containment, and ultimately, profits.
The Inventory Forecasting and Stock Optimizer (IF/SO) from Forerunner Systems, Inc., is an inventory management software package that supports planners in their decision making.
First released in 1995, the system was designed by catalog industry veterans who understood the needs of direct-to-customer businesses. This inventory system ultimately allows the user to decide what, when, and how much to purchase. It forecasts demand for soft and hard goods at the color/size level.
Forerunner currently has some 24 installations at companies whose annual sales range from $10 million to $1 billion. Among them are the Williams-Sonoma catalogs (Williams-Sonoma, Hold Everything, Chambers, and Pottery Barn) and the Cinmar catalogs (Ballard Designs, Garnet Hill, and Frontgate), as well as Saks Folio and Lakeshore Learning Materials.
IF/SO offers forecasting curves at the catalog level, by individual merchandise categories, and by item level if necessary, to forecast inventory demands for the life of multiple promotions in predetermined time frames.
IF/SO also facilitates both bottom-up, item-level forecasting and top-down category planning — or both, for a comprehensive item-level merchandising and purchasing plan.
IF/SO is a straightforward yet flexible system that users tell us is easy to learn and use. Installation and training take 45 days on average. Training manuals are provided and all other documentation is available online through help screens.
Features and functions
The Windows-based system runs on the Revelation relational database. Users may choose between Windows NT and Novell NetWare operating platforms. The program is written in OpenInsight, a fourth-generation language that is part of Revelation.
IF/SO has been interfaced to such leading direct-to-customer order management systems as CommercialWare, Ecometry (formerly Smith-Gardner), and Sigma Micro, as well as a number of proprietary systems. In order for IF/SO to receive information, user companies must map their host systems to the standard interface import file formats provided by Forerunner.
Once the setup promotion fields are established, the system will run from information extracted from host order management systems. IF/SO can be updated nightly via an automated import run. Forerunner will consider customization to IF/SO to meet the specific needs of user companies.
OpenInsight includes a report writer that generates custom reports as needed, and additional reporting may be required. Some users we contacted utilized IF/SO’s export feature to do additional sorting and reporting, as the core reporting in IF/SO is somewhat limited.
Inventory control personnel typically perform IF/SO’s inventory analyses with just four or five primary screens (depending on whether the item is single- or multi-SKU). In addition, a weekly demand forecast analysis can be performed by means of an eight-step process.
Promotion planner screen
High-level information about the promotion to be measured (promotion identification and description, total planned orders, and dollars and percent complete) is logged in on this screen.
Item factors screen
Specific data about a given promotion (items, pricing, type of item — color/size vs. single SKU — page number, percent of page, and curve type) are shown on this screen. Curve types are created or selected from historical promotions. Color/size items include a few additional required fields, such as the percent of colors and sizes to the style. Data can be copied and modified from other promotions or downloaded from the host fulfillment system.
Intelligent forecaster screen
This is the central analysis tool to aid in the decision-making process. Accessed from the item factors, it enables the user to compare past promotions for the item or similar items, if desired, and display the demand in units and dollars, three different sell-through formulas, and gross profit. This information is summarized, blended, and a recommended forecast is suggested.
Stock projection and buy plan screen
This screen identifies items that are over- or under-bought or are tracking to the forecast. It shows quantities available by color/size, net demand, quantity and dollars on order, weeks of supply, and quantity remaining at the end of the promotion. A second view shows inventory position by week and indicates when an order must be placed to ensure delivery, allowing for adequate lead time and safety stock.
Demand forecast analysis
The promotion marketing plan is reviewed for changes to the dollar or order plan and any revisions necessary in IF/SO. The forecast variance report verifies the total promotion plan and the percent complete, and the user determines if specific items should have their own curves. The auto item forecast adjustment function can be run as needed to revise relationships and create new forecasts for all items in a promotion. The assortment variance report reviews the relationships between colors and sizes offered to ensure their percent contributions are correct, on an as-needed basis. The forecast balance report ensures that changes to the item forecasts are in tune with the total promotion plan dollars.
The stock status function analyzes stock and creates the buy plan. The backorder and overstock alert reports identify items for action that are sorted in order of greatest importance. The buy plan reports are run for selected vendors based on forecast inventory needs. IF/SO creates suggested buying decisions, but does not have a purchase order module. Instead, the suggested buys can be uploaded to the corporate purchase order system.
Multilevel kit module
Available for an additional cost, this module will gather data and forecast demand for components of the kit and will roll into the demand for component items, as well as individual demand if these items are also sold individually. Functionality includes multiple kit relationships, kit nesting, kit demand for components, ability to purchase both the kit and components, and color/size kits.
Assortment planner module
Scheduled for release in mid-2001, this module will be available for an additional fee. It will offer a suite of reports, including displayed plan, whole season, and compare season versions. The assortment planner allows for top-down planning by promotion down through division, department, class, and item. Up to five plans can be developed simultaneously, and an automatic reconciliation feature will cascade the plan from the department/class level down to the item level. Additionally, items that are being planned can be frozen if there is limited supply from the vendor and the automatic reconciliation process will not adjust these items.
Scheduled for release before the end of 2001, this module will be available for an additional fee. It will analyze items across all promotions, catalog, and Internet. It will factor in time periods when the item will be displayed, number of hits, and length of time on the Internet; and it will roll these projections into the base IF/SO forecasting modules.
All the users with whom we spoke were very satisfied with IF/SO and would select it again. Lucy McCausland, inventory control manager at French Country Living, told us, “I am extremely impressed with IF/SO and the staff of Forerunner Systems, as they are easy to work with and are quick to respond to any question. I feel they are filling a niche in the marketplace that is much needed.”
Cathie Martin, director of inventory management for Faith Mountain, says, “I would highly recommend that any catalog company at least take a look at IF/SO to see what it can do for you.”
Users commented that IF/SO was easy to learn and that forecasting analyses are straightforward. They also noted that the training done on-site was thorough and the instructors took time to answer questions, explain the process, and offer practical examples.
One user told us that IF/SO has enabled the company to cut its backorders drastically, thus improving initial order fill and increasing gross margin.
Although Forerunner’s system does not include marketing and other forecasting functions, user comments indicate that it does do a good job with its core functionality of forecasting items across multiple promotions.
Since inventory is any direct-to-customer company’s number one asset, having a software tool like IF/SO to help you maintain efficient stock levels can prove to be extremely beneficial.
Curt Barry is president of F. Curtis Barry & Co. He can be reached at 1897 Billingsgate Circle, Suite 102, Richmond, VA 23233; by phone at (804) 740-8743; or by e-mail at firstname.lastname@example.org (Web site: www.fcbco.com ).
FORERUNNER SYSTEMS, INC.
Address: 100 Shoreline Hwy., Suite 310-B
Mill Valley, CA 94941
Telephone: (415) 332-4032
Fax: (415) 332-9170
Contact: Mary Sullivan
Sample pricing: Concurrent two-user system $78,000; 1-5 additional users $3,000 each; 6+ users $2,500 each. Network accelerator (required): $1,250.
Optional modules: Kitting, assortment planner, and e-commerce module, $10,000-$18,000 each. Companies with sales in excess of $250 million and international companies, call for quote.
Annual maintenance: 18% of total license fee starting in year two
Installation and training: 12% of total license fee
Technical support: 24/7