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Briggs & Stratton, a Fortune 1000, $1.6B company, is the
world's largest manufacturer of small, gasoline-powered engines.
Its service division distributes items to 35,000 dealers around
the world. It sells and services engines to 90 countries on all
seven continents. Demand is dependent on weather conditions, so
is highly seasonal. When Briggs decided to integrate and refine
its after-market demand chain, it engaged Assiduo.

At the outset, Briggs began gathering aggregate dealer-level
demand history from its 29 independent and company-owned
distributors around the world, in order to gain a more precise
view of actual demand, close to the ultimate source. Assiduo
implemented a module to process and validate this demand history
regularly, as well as to handle automatically the hundreds of
annual supercedures as the product-line evolves.

Once the process for capturing downstream demand history was in
place, Assiduo tailored and installed its multi-stage demand
management solution to begin generating monthly statistical
forecasts for a total of approximately 250,000 SKU-location
pairs.

The Assiduo and Briggs teams also worked together closely to
refine cost models addressing major supply chain processes. This
set the groundwork for customizing and then implementing
Assiduo's proprietary multi-echelon inventory optimization
engine to control inventory levels in second tier warehouses
around the world, jointly with the main Milwaukee distribution
center.

Finally, Assiduo tailored and implemented a suite of supply
chain intelligence tools based on data-warehousing technologies,
incorporating a wide array of easily accessed business objects
for analysis, as well as a series of extensive, user-directed
graphical reports.

Assiduo's decision-support systems have achieved significant
financial benefits for Briggs & Stratton. As Peter Klug,
Logistics Project Manager for Briggs & Stratton observes, "Based
on the results of this project, we found our inventory levels at
our distribution center going down by 25 percent. We found that our
distributors were able to reduce their inventory levels by 40 percent.
Beyond just reducing inventory levels, we've maintained our
service levels at a very high rate."

The net result was an extraordinarily short payback of the
project investment. Says Mr. Klug, "At Briggs & Stratton we use
an EVA-framework to do our cost-benefit analysis. And a
successful project usually is EVA-positive in the first year.
With Assiduo, we actually had real economic value added within
the first six months."

John Guy, Vice President & General Manager of Distribution at
Briggs & Stratton assesses the project's outcome, as well as
Assiduo's contribution. "We were looking to take our supply
chain to the next level, to make it world-class, and Assiduo
helped us get there." "Assiduo has some extremely intelligent
people who designed a complex inventory management model for us
to take significant costs out of our supply chain."

Getting there, Mr. Guy further says, was "a collaborative
process." "Assiduo tailored their system for our environment,
and we gave them ideas for the type of information that would
help us fine tune the business."

In an environment in which flamboyant software industry figures
have incessantly extolled single branded corporate systems,
Briggs acknowledges having had some initial hesitation in
plugging a best-of-breed application into the existing IT
firmament. Mr. Klug admits, "Any time you take a system off to
the side and plug it into your core system, which for us is SAP,
there's a certain element of trepidation there. But with
Assiduo, the installation, the interface-all of that-was quite
easy. It probably represented less than 5% of the total
project."

The absence of complications of this sort, among other factors,
enabled the project to hit important project management targets,
despite the numerous customized elements in the mix. Mr. Guy
observes, "We were pleased that the project came in on budget,
and was completed before our season went into full swing."

Mr. Klug reserves his strongest enthusiasm for Assiduo's use of
advanced technology to address real business problems. "To
me-I've got an operations research background-what really
impressed me was the really cutting edge inventory optimization
engine, and forecasting engine that they use." As for the impact
of Assiduo's advanced forecasting system, over and above the
well-known demand management system previously in use at Briggs,
Mr. Klug calculates, "We were able to reduce forecast error by
28 percent, which was really an amazing reduction for us."

Moreover, Briggs has discovered tremendous further intangible
benefits to implementing Assiduo's system for the long-term. Mr.
Klug suggests, "Something to keep in mind is the future benefits
of having command of your supply chain, having the information
to understand your supply chain better. And that really provides
the information for improving processes, improving
communication, improving all sorts of aspects of the supply
chain going forward, far into the future."

Briggs & Stratton
Corporation is the largest manufacturer of four-cycle,
air-cooled engines for outdoor power equipment, such as lawn
mowers, pressure washers and generators. An authorized service
network of more than 35,000 dealers worldwide provides service
and genuine replacement parts for all Briggs & Stratton
engines-powering more than 90 countries on all seven continents.

Assiduo Solutions Inc. is a leading provider of tailored
decision-support applications, focused on multi-echelon
inventory optimization, demand management, and supply chain
intelligence. Based in Toronto, the firm is managed by its
founder, University of Cambridge and Bain & Company alumnus
David Chennells. Its research efforts are led by Chief Scientist
Paul Zipkin, Professor at the Fuqua School of Business at Duke
University in Durham, North Carolina, and an internationally
renowned scientist in the field of inventory management. |
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