Success story

Bodybuilding.com uses alerts to strengthen its demand planning prowess.

Logility provided Bodybuilding.com the visibility to make better planning decisions and more accurately respond to customer demand.

-45% Icon arrow down

Reduced back orders

-10% Icon arrow down

Reduced inventory by more than 10%

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Reduced promotional pull down

-45% Icon arrow down

Reduced back orders

-10% Icon arrow down

Reduced inventory by more than 10%

-50% Icon arrow down

Reduced promotional pull down

Challenges

Bodybuilding.com is one of the world’s largest online sports nutrition stores and fitness sites, with more than 30 million fitness enthusiasts visiting each month. As a pure play e-commerce company, Bodybuilding.com has access to near instantaneous customer demand that can be used to drive both short- and long-term demand planning. Bodybuilding.com relies on a variety of analytics and alerts in Logility to make more informed decisions and more accurately respond to customer demand.

One morning the Bodybuilding.com demand planning team was greeted with a big surprise. Over the weekend a popular bodybuilder posted a YouTube video calling out his top 10 favorite supplements, complete with links to the site where viewers could place an order. Some supplements were big sellers. But a few were lower volume, less-well-known SKUs. One item that normally averaged 30 sales per week had sold nearly 800 units in just a few days.

With more than 14,000 SKUs, Bodybuilding.com’s demand planners already faced a full workload. Because unexpected demand complicates the picture, they needed a better way to quickly identify under- and over-performers. The planning team utilized standard alerts including Demand Planning Compared Forecast to Future Orders and Demand Planning Future Orders Percent of Resultant Forecast, to drive a rapid business response.

Inventory challenges

Bodybuilding.com needed to manage inventory more efficiently and prevent out-of-stocks.

Improve forecasting

They needed to quickly identify over- and under-performing items.

Driven by promotions

Better management of a highly promotional-driven environment was imperative.

Solutions

The Demand Planning Compared Forecast to Future Orders alert captures any item exceeding the forecast and highlights ones that Bodybuilding.com will not be able to meet with inventory on hand and expected inbound orders. Bodybuilding.com runs this alert at the beginning of the week, then works with vendors to locate or produce more inventory as needed. 

The Demand Planning Future Orders Percent of Resultant Forecast alert is run at the beginning and end of the week. The first run identifies items that are overselling either 50%, 80% to over 100% of the forecast. The second run, at the end of the week, identifies items that are underselling by 10%, 20% to 50% of the forecast.  

To customize these alerts and prioritize items for investigation, the company leverages inventory segmentation analysis to identify A-B-C items. For example, one alert captures any high priority ‘A’ items where the forecast is exceeding future orders by over 100%. The company aligned the Logility alert thresholds—Critical, Warning, or Information—with the A-B-C codes, so for example, all A items have a severity bucket of critical. Global filters also enable planners to isolate classification of items and see those that are either new or active, and therefore able to be replenished. 

Demand Planning and Inventory Optimization

Pricing and Promotion Analysis

Inventory Planning and Optimization

Replenishment Planning and Optimization

Now when the system flags an issue, planners recognize it quickly. Bodybuilding.com Demand Planner Chris Halsted explains, “On Monday morning, I see all of the items that I need to investigate. I simply click a link to open the forecast hierarchy view. From there I can make adjustments, force them down if needed, and we can start buying.” Similarly, with underperformers, Bodybuilding.com can make a business decision to revise the forecast, or take a deeper dive and look at drivers and the impact on promotional activity.  

Just 18 months after leveraging advanced analytics and activating alerts, backorders have dropped an impressive 45%, overstocks are down 10%, and total inventory is down by over 10%. “Our forecast accuracy has been improving month after month, and that’s a win-win situation for everyone, but especially our customers,” added Halsted.  

Bodybuilding.com also used Logility to create new views of inventory trends that enhanced collaboration with suppliers. As a result of better planning and greater visibility, the company has reduced its US fulfillment center count from five to two locations. Leveraging Logility’s capabilities to adjust safety stocks and shift demand to fulfillment centers helps the business quickly reconfigure to the new distribution network. “We made major transitions without increasing our back order percentages,” says Halsted, “and it was very easy to do with Logility.” 

Results

Logility Demand Planning provides visibility across Bodybuilding.com’s supply chain network to increase forecast accuracy and right-size inventory levels. 

Logility Inventory Planning allows Bodybuilding.com to improve inventory performance and customer support through demand and inventory plan alignment. 

Logility Replenishment Planning helps Bodybuilding.com to isolate and manage inventory and service performance at a product-specific level. 

With Logility, Bodybuilding.com was able to reduce backorders by 45%inventory by over 10% and promotional pulldown by 50%. They increased forecast accuracy and were able to eliminate two DCs and pared safety stock without increasing backorder percentages. 

Logility makes our lives so much easier. The alerts and analytics deliver exactly what we need to see to proactively react to our market and produce a better forecast.