Blue Yonder Case Studies Airtight Operations

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	Airtight Operations Blue Yonder

Airtight Operations

Blue Yonder

Technology Category	Functional Applications - Enterprise Resource Planning Systems (ERP) Functional Applications - Inventory Management Systems
Applicable Industries	Chemicals Construction & Infrastructure Healthcare & Hospitals
Applicable Functions	Logistics & Transportation Procurement
Use Cases	Inventory Management Supply Chain Visibility
Services	System Integration
Challenge	Airgas, Inc., the largest distributor of industrial, medical and specialty gases and welding equipment and supplies in the United States, faced unique supply chain challenges due to its large business network. The company had set ambitious goals for growth and profitability, implementing an aggressive business strategy driven by organic growth and numerous core, product line and strategic acquisitions. However, the company’s rapid, acquisition-fueled growth was not supported by its existing systems. Airgas used a mixture of legacy systems and industry-specific solutions to manage demand, but these systems were not integrated and could not scale to keep up with the company’s growth. Each of the company’s 12 regional operating companies ran its own version of a demand management solution, further complicating the need to manage almost 3.5 million items in a complex wholesale distribution environment. As a result, Airgas lacked the enterprise-wide view of supply and demand needed to optimize inventory, reduce costs and drive customer satisfaction. Read More
About Customer	Airgas, Inc. is the largest distributor of industrial, medical and specialty gases and welding equipment and supplies in the United States. The company is also one of the largest national distributors of safety products, a leading source of nitrous oxide, dry ice and liquid carbon dioxide, as well as process chemicals, refrigerants and ammonia products. The company employs more than 14,000 associates and serves a diverse customer base that includes welders and metal fabricators, construction firms, hospitals and clinics, nursing homes and home healthcare providers, equipment manufacturers and research laboratories. To meet the needs of its diverse customer base, Airgas built a nationwide distribution platform across multiple channels, including retail branches, distribution centers and inbound and outbound telemarketing centers. Airgas’ integrated network consists of approximately 1,100 locations, from retail stores serving walk-in customers to large distribution centers (DCs) strategically located across the U.S. Read More
Solution	To solve its critical inventory balancing challenges, Airgas began evaluating automated demand and fulfillment systems. The company wanted a truly integrated supply chain management solution – one that would link suppliers and sub-suppliers, internal operations, trade customers, retail customers and end users. After a thorough review, Airgas selected JDA Demand and JDA Fulfillment, from JDA Software’s Intelligent Fulfillment™ solutions, to address its business challenges and achieve a global view of its inventory. Airgas leverages JDA Demand to manage more than one million demand forecast units and uses aggregation and reconciliation to forecast at multiple levels. The company generates monthly forecasts and publishes updates that are made by the demand planners daily. JDA Fulfillment allows Airgas to manage 250,000 unique items, including 912,000 stocked SKUs and more than 2.5 million non-stocked SKUs through its network of 1,500-plus vendors. The company runs its fulfillment plan nightly, generating more than 4,000 purchase orders in a typical business day. Read More Log in to view content
Contents

Technology Category

Functional Applications - Enterprise Resource Planning Systems (ERP)

Functional Applications - Inventory Management Systems

Applicable Industries

Chemicals

Construction & Infrastructure

Healthcare & Hospitals

Applicable Functions

Logistics & Transportation

Procurement

Use Cases

Inventory Management

Supply Chain Visibility

Services

System Integration

Challenge

Airgas, Inc., the largest distributor of industrial, medical and specialty gases and welding equipment and supplies in the United States, faced unique supply chain challenges due to its large business network. The company had set ambitious goals for growth and profitability, implementing an aggressive business strategy driven by organic growth and numerous core, product line and strategic acquisitions. However, the company’s rapid, acquisition-fueled growth was not supported by its existing systems. Airgas used a mixture of legacy systems and industry-specific solutions to manage demand, but these systems were not integrated and could not scale to keep up with the company’s growth. Each of the company’s 12 regional operating companies ran its own version of a demand management solution, further complicating the need to manage almost 3.5 million items in a complex wholesale distribution environment. As a result, Airgas lacked the enterprise-wide view of supply and demand needed to optimize inventory, reduce costs and drive customer satisfaction.

About Customer

Airgas, Inc. is the largest distributor of industrial, medical and specialty gases and welding equipment and supplies in the United States. The company is also one of the largest national distributors of safety products, a leading source of nitrous oxide, dry ice and liquid carbon dioxide, as well as process chemicals, refrigerants and ammonia products. The company employs more than 14,000 associates and serves a diverse customer base that includes welders and metal fabricators, construction firms, hospitals and clinics, nursing homes and home healthcare providers, equipment manufacturers and research laboratories. To meet the needs of its diverse customer base, Airgas built a nationwide distribution platform across multiple channels, including retail branches, distribution centers and inbound and outbound telemarketing centers. Airgas’ integrated network consists of approximately 1,100 locations, from retail stores serving walk-in customers to large distribution centers (DCs) strategically located across the U.S.

Solution

To solve its critical inventory balancing challenges, Airgas began evaluating automated demand and fulfillment systems. The company wanted a truly integrated supply chain management solution – one that would link suppliers and sub-suppliers, internal operations, trade customers, retail customers and end users. After a thorough review, Airgas selected JDA Demand and JDA Fulfillment, from JDA Software’s Intelligent Fulfillment™ solutions, to address its business challenges and achieve a global view of its inventory. Airgas leverages JDA Demand to manage more than one million demand forecast units and uses aggregation and reconciliation to forecast at multiple levels. The company generates monthly forecasts and publishes updates that are made by the demand planners daily. JDA Fulfillment allows Airgas to manage 250,000 unique items, including 912,000 stocked SKUs and more than 2.5 million non-stocked SKUs through its network of 1,500-plus vendors. The company runs its fulfillment plan nightly, generating more than 4,000 purchase orders in a typical business day.

Impact #1	Reduced days-on-hand inventory by 21 percent
Impact #2	Increased customer fill rates from 89 percent to nearly 95 percent
Impact #3	Limited the increase in number of buyers/ planners to 13 percent even though the company’s revenue grew by nearly 300 percent

Impact #1

Reduced days-on-hand inventory by 21 percent

Impact #2

Increased customer fill rates from 89 percent to nearly 95 percent

Impact #3

Limited the increase in number of buyers/ planners to 13 percent even though the company’s revenue grew by nearly 300 percent

Benefit #1	21 percent reduction in days-on-hand inventory
Benefit #2	Increase in customer fill rates from 89 percent to nearly 95 percent
Benefit #3	Limited the increase in number of buyers/ planners to 13 percent despite a remarkable revenue increase

Benefit #1

21 percent reduction in days-on-hand inventory

Benefit #2

Increase in customer fill rates from 89 percent to nearly 95 percent

Benefit #3

Limited the increase in number of buyers/ planners to 13 percent despite a remarkable revenue increase

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Overview

Airtight Operations

Operational Impact

Quantitative Benefit