Product: Manufacturer and Seller of Bottled Spring Water
Number of Employees: 70
Years in Business: 13
Location: Randolph, VT

Situation

Vermont Pure Holdings, Ltd. bottles, markets and distributes natural spring water under the Vermont Pure® and Hidden Spring® brands and distilled water with minerals added under the Crystal Rock® brand to the retail consumer and home/office markets through its wholly owned subsidiaries, Vermont Pure Springs, Inc. and Crystal Rock Spring Water Company. Vermont Pure Holdings, Ltd. is a regional focused company and the eighth largest bottled water company in the United States. Vermont Pure Holdings, Ltd. is well positioned for future growth by capitalizing on opportunities in existing markets, expanding to new markets, and continuing the execution of its growth strategy.

Solution

Execution of their growth strategy resulted in their Randolph, Vermont plant experiencing growth in inventories associated with expanding product lines and double-digit growth in shipments. A leading edge customer service company, Vermont Pure recognized that operational systems that had been integrated into their business years earlier were no longer effective in managing the new day-to-day requirements. This left them with a challenge: sustain sales and product line growth while balancing resources.

Specifically, Vermont Pure needed a way to manage its finished goods inventory while meeting customer expectations. Working with VMEC, the team at the Randolph plant began applying Lean manufacturing principles to the problem. By developing a "Finished Goods Supermarket," the team was able to create a single scheduling point. This new capability provided a detailed model for testing various operational scenarios and finished goods stock levels against actual customer order patterns. The new scheduling tool incorporates real-time finished goods inventory, time-phased open orders, forecast data, customer variability and plant capacity, providing the team with planned inventories by SKU on a weekly basis.

Results

The impact has been significant, including an impressive seven-figure decrease in finished goods inventory. In addition, Vermont Pure has experienced both warehouse and trucking cost savings, overtime reductions and an increase in the percentage of product shipped direct to customers as the model contained seasonality attributes key for the summer months.