A speciality retail company for one of the world’s premium brand having retail stores across the country.
Need for forecasting
Product availability is key to the brand image and yet stocking right level is important to ensure that the company is making optimum inventory investment in the high costing products. The country wide locations also require the considerable lead time heads up for the demand as the cross transfers are expensive preposition.
Issues with the current process
Operations team was using backward average of sales to forecast the demand and place orders for the stock. Frequent stock outs was hurting the sales resulting in not only the unhappy customers but also a dissatisfied store staff.
The change we made
The existing planning process was replaced by deploying Planamind and forecast was done using statistical methods after cleaning the history of the uneven demand caused by inventory situations in the past.
Additional process change was made to involve the sales team in the sales forecasting and inventory planning process. Using the web interface the area managers could see their stores forecast and also the inventory requirement being planned using the BI reports. By click of a button they could also see the inventory imbalances within the stores in their region. They participated in the process by editing the forecast with their reasons which were evaluated by the sales head and the operations team.
Additionally, the separate forecast process was formed for ordering the stock by creating a larger time difference to ensure that the sales forecast validated by the sales team had the opportunity to be met by supply within the time frame.
Significantly higher fill rates were achieved within 4 weeks of implementation. Planamind for collaborative planning and BI reports for analysis are the integral part of the process.
As a bonus the company was able to eliminate a large part of the excess stock by managing the imbalance, making the finance team happy as well.