Brookstone
Founded in 1965, Brookstone has grown into a specialty retailer that spans the country in mall and airport locations, and offers a variety of consumer products. Today, its four primary product categories are technology, wellness, travel and home.
Headquartered in Merrimack, N.H., the company maintains its own Brookstone-branded product development arm better known as Brookstone Labs. Although it outsources all manufacturing, its headquarters location is still where the company engages in research and development. In Mexico, Mo., Brookstone operates a 400,000-square-foot distribution center.
“We try to replace 40 percent of our product assortment annually so that we stay new, trendy, and relevant,” says Darrin Weigle, director of inventory management. “We have a robust merchandising organization that works shoulder-to-shoulder with both Brookstone Labs and our Asia Combine supplier-management partner. Our Brookstone-branded products are typically designed to either uniquely solve an everyday problem, or to elevate the everyday life of our consumers.”
Diverse Structure
Brookstone currently manages five diversified sales and operating channels. This structure came about as a result of the economic challenges of recent years, which negatively impacted Brookstone’s retail mall sector. And while the traditional brick-and-mortar retail mall stores are still the foundation of the company, Brookstone now also operates retail airport stores, seasonal pop-up stores, in the wholesale market space and within their rapidly growing e-commerce channel.
This diversification of the company’s sales channels has allowed Brookstone to see meaningful sales growth over the last few years. However, it has also significantly increased operating complexities relative to the manner in which the company conducts its daily business. As one significant example of these growing complexities, channel diversification prompted Brookstone to maintain separate channel-specific inventories with different sets of managers, staffers, processes and technologies utilized to plan, procure and get products out to its channel partners and customers.
That was not an ideal setup because the separate operating structures required to support each of these diversified channels were both costly to run, and were also not empowered to drive enterprise-wide economy-of-scale benefits for Brookstone as a whole. The dilemma, according to Weigle, was to figure out how to support the unique operating needs of each diversified sales channel, while also driving both capital and operating efficiencies.
In its traditional channel, Brookstone has about 220 retail mall stores whose replenishment needs are all serviced from the company’s single national distribution center. Brookstone operates about 50 airport stores as well with very limited space and storage capacity, and with seasonality patterns that are markedly different than the mall stores.
From a wholesale standpoint, the company works to get Brookstone-branded products into external retailers, produces wholesale sets for big-box retail partners, and then maintains forecasting and replenishment plans based upon partner-POS data. As for the seasonal pop-up stores, those require daily forecasting and allocation agility because the company has only six weeks to maximize their sales and financial productivity. And lastly, Brookstone’s e-commerce division needs strong planning support for its Internet sales, catalog sales with varying circulation strategies, and drop-ship sales.
“That level of complexity had led to inventory inefficiencies and a corresponding lack of capital efficiency,” Weigle says. “Toward the end of 2012, we ultimately decided upon an operating structure that embraced the pursuit of economy-of-scale benefits. Rather than supporting Brookstone’s diversified channel needs with separate people, processes and technologies, we have now centralized supply chain planning and are working toward deploying a single integrated EDM and DRP platform; a ‘One EDM – One DRP’ strategy, so to speak.” EDM stands for enterprise demand management, while DRP means distribution requirements planning.
To enable the One EDM – One DRP strategy, Brookstone partnered with Park City Group (powered by Prescient Systems), Logility and consulting partner Carnegie Technology Group. These allow Brookstone’s planning functions to move to a single organization and integrated planning platform to help the company better plan for sales and inventory in support of all five channels.
“Trying to find an integrated technology solution to handle all of these unique and channel-specific requirements was a challenge, but now we are about 95 percent done with our deployment,” Weigle says. “The entire effort has been focused on bringing everything under one organizational structure and having a single proven process to help maximize the performance of the enterprise.”
As a Team
All of this requires careful collaboration among Brookstone’s leadership. Weigle’s team handles all supply chain planning and inventory management in support of Brookstone’s diversified operating divisions. Brookstone has a separate team located at the company’s Mexico, Mo. distribution center to oversee the inbound logistics of products arriving from Far East contract manufacturers, physical warehousing, customer order processing and outbound logistics.
“My team handles the company’s planning, purchasing, stock transfer and allocation operations, while a separate team out at the DC manages physical distribution and both inbound and outbound traffic,” Weigle says. “We also have our overseas partner, Asia Combine, who helps us manage our relationships with many of our import suppliers.”
Bringing its One EDM – One DRP initiative over the finish line will be major for Brookstone in 2013. As it works through the final weeks of solution deployment and thoroughly training its people, the company is looking forward to future challenges.
“Not only has supply chain planning centralized at Brookstone, but our merchandising organization has adopted a centralized structure and now oversees all operating divisions as well,” Weigle says.