1. SUCCESS WITH
LOGILITY L O G I L I T Y V O YA G E R S O L U T I O N S
a c as e s tu d y
The Heat Group
gets a supply chain makeover
Women “Down Under” rely on The Heat Group, an Australian cosmetics and The Heat Group
beauty products distributor, to ensure they stay “easy, breezy, and beautiful,”
just as the Covergirl tagline says.
Recognized as one of Australia’s hottest distributors, The Heat Group has an Facts
established track record of growing brands. Selling to department stores and pharmacies Industry: Cosmetics distributor
throughout Australia, The Heat Group established its position as a major player in the Headquarters: Mount Waverley, Victoria,
cosmetics market in 2001 by gaining the Australian distribution rights for Procter & Gamble Australia
owned brands Max Factor and Covergirl. In just three years, The Heat Group doubled Profile: The Heat Group is an Australian
sales of these brands, and they continue to grow, year on year. In 2005, The Heat Group cosmetics and beauty products distributor
purchased the brand Ulta 3, the next year the company received distribution rights for the with Australian distribution rights for well-
Chanel brand Bourjois, and most recently obtained distribution rights for Elite’s range of known Procter & Gamble owned brands,
beauty products. Max Factor and Covergirl.
Unique challenges on the world’s biggest island Challenge
The Heat Group wanted to increase supply
Operating from a single distribution center in Melbourne, The Heat Group, like other
chain visibility across the company, simplify
Australian businesses, faces supply chain challenges related to its isolated nature. Leads
the process, and increase collaboration with
times tend to be longer in Australia, averaging from three to six months for finished goods,
its business partners.
and four to nine months for raw materials.
The cosmetics industry adds its own complexities. The Heat Group owns the inventory after
Logility Solution
purchasing it from the brand owner, and is responsible for moving it to market. With = The Heat Group deployed Logility Voyager
approximately 400 product SKUs for each of the five brands, the company must double the Solutions™ and increased forecast
accuracy by 9 percentage points, boosted
number when planning to account for “tester” items and special displays.
fill rate by 5.8 percentage points, and
New product introductions and seasonality also come into play with distinct winter colors significantly improved internal and external
versus summer shades. And, close to 40% of The Heat Group’s monthly sales are driven by collaboration.
promotional activity. Promotional packs including items such as displays, samples, and = The Heat Group worked with Logility’s
testers are sent to customers during these periods. All the pack parts have separate part Australian distributor, Demand
numbers, and The Heat Group does not carry safety stock for these items, creating Management Systems Pty Ltd., to design
challenges from a supply chain planning perspective. unique performance reporting views that
distribute management information to key
A clear vision of success stakeholders within the organization,
With a small supply chain team and growth five times the market rate, The Heat Group’s increasing visibility and improving
management decision making.
supply chain objectives were to streamline the planning process, and increase supply chain
visibility across the company’s functional and organizational boundaries. Izabela
Laskowski, supply chain manager for The Heat Group explains, “Our goal was empower the The Bottom Line
supply chain team not only to manage the day-to-day data, but also to have access to the = Increased forecast accuracy by 9
overall picture for strategic planning.” percentage points
= Boosted fill rate by 5.8 percentage points
The Heat Group turned to Logility Voyager Solutions™ to support the company’s rapid
growth, and accomplish the goal of increased supply chain visibility internally across the = Raised service levels while maintaining
company and externally with business partners. target inventory levels
= Improved internal collaboration across the
company and external collaboration with
business partners
“With Logility Voyager Solutions in order to make fact-
‘demystify’ the planning process
we have been able to
based decisions. Logility has given us the tools to increase
visibility in a timely manner with a small team and little effort.
Izabela Laskowski
”
Supply Chain Manager
The Heat Group

2. T H E H E AT G R O U P - L O G I L I T Y V O YA G E R S O L U T I O N S
Logility Voyager Solutions™ help Previously, The Heat Group’s supply chain team “With Logility Voyager Solutions we have been
companies like The Heat Group achieve relied primarily on spreadsheets, requiring an able to ‘demystify’ the planning process in order
competitive advantage and improve enormous manual effort and leaving little time for to make fact-based decisions. Logility has given
operational and financial performance. deep analysis. With Logility Voyager Solutions, us the tools to increase visibility in a
The Heat Group was able to expand its brand timely manner with a small team
Logility Voyager Solutions portfolio from three to five brands without and little effort,” says Laskowski.
enable you to: increasing headcount in the supply chain
= Increase forecast accuracy department. While many software solutions will
= Align inventory with customer demand generate forecasts and create a plan, additional
= Optimize inventory levels and increase benefits in productivity have been achieved by
inventory turns fully embracing the flexibility and collaborative
= Boost customer service through powers of Logility’s built-in performance
product availability, accurate order management. This has allowed the business to
fulfillment and on-time deliveries share the same numbers, individually presented
= Optimize your entire value chain and to each aspect of the business.
get the right products at the right price
to the right place at the right time The right information made accessible to
the right people
The Heat Group has embraced an “open book”
supply chain policy, meaning that all information
is available companywide and to its partners, the
emphasis being on collaborative forecasting.
Internally, key performance indicators (KPIs) that
The Heat Group tracks are available to not only
the supply chain team, but also to sales and
marketing. Using Logility’s built-in performance
management, fill rates, current and projected out-
of-stocks, and projected inventory on hand are all
now shared company-wide. Externally, business
partners like Procter & Gamble have access to
current sales forecasts, purchase plans, and
inventory projections.
Beautiful results
A clear vision of what success looks like
combined with a proven process has led to
impressive results for The Heat Group. The
company’s fill rate increased by over five
percentage points, and forecast accuracy has
improved by close to nine percentage points.
Additionally, with easy access to past and current
performance numbers, The Heat Group has
developed a strong sales and operations
planning process (S&OP).
The combination of functionality across Logility
Voyager modules and integrated performance
management provided The Heat Group not only
the ability to plan products, it allowed the clear
visibility to help plan the business.
Learn how Logility Voyager
Solutions can help your ABOUT LOGILITY: With more than 1,250 customers worldwide, Logility is a leading provider of
company achieve success collaborative, best-of-breed supply chain solutions that help small, medium, large and Fortune 1000
800-762-5207 companies realize substantial bottom-line results in record time. Logility Voyager Solutions is a complete
+44 (0) 1932-846060 supply chain management solution that features performance monitoring capabilities in a single Internet-
www.logility.com based framework and provide supply chain visibility; demand, inventory and replenishment planning; sales
and operations planning (S&OP); supply and inventory optimization; manufacturing planning and scheduling;
transportation planning and management; and warehouse management.
© 2010 Logility Inc. Logility is a registered trademark and Logility Voyager Solutions is a trademark of Logility, Inc. All other trademarks are the property of their respective holders. E0410