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Synchronyze Store Warehouse Demand in a multi echelon environment (Nicolas Sprotti)
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Synchronyze Store Warehouse Demand in a multi echelon environment (Nicolas Sprotti)

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  • 1. SynchronizingStore - Warehouse demand
    Nicolas Sprotti – July 1st 2011
  • 2. Nicolas Sprotti - July 1st 2011
    Synchronizing Store - Warehouse demand
    Five principles of Forecast…
    Forecast are always wrong
    Forecast must be measured and improved
    Forecast are more accurate for group of product, rather than individuals components
    Forecast are more accurate closer in
    Low-volume or erratic forecast are most difficult
  • 3. What options for a multi-echelon forecasting and replenishment ?
    Synchronizing Store - Warehouse demand
    Nicolas Sprotti - July 1st 2011
  • 4. Synchronizing Store - Warehouse demand
    Single Point Replenishment - SPR
    Roll up historical shipment
    ProfileForecast
    DC Demand
    Nicolas Sprotti - July 1st 2011
  • 5. Single Point Replenishment - SPR
    Advantages
    Disadvantages
    Historical Method
    Automatically account for warehouse to store lead time
    Simplicity : Business understand this information and metrics have been used to support decision making for some time
    Not optimized for a multi-echelon environment
    Increased demand may be delayed, perpetuating inferior fill rate and lost sales
    Synchronizing Store - Warehouse demand
    Nicolas Sprotti - July 1st 2011
  • 6. What options for a multi-echelon forecasting and replenishment ?
    Synchronizing Store - Warehouse demand
    Nicolas Sprotti - July 1st 2011
  • 7. Synchronizing Store - Warehouse demand
    Distribution Requirements Planning - DRP
    Forecasted Orders
    Roll up store order forecast
    DC Demand
    Forecasted Orders
    Forecasted Orders
    Nicolas Sprotti - July 1st 2011
  • 8. Distribution Requirements Planning - DRP
    Advantages
    Disadvantages
    Changes to store level demand forecast, promotional events, order cycle and lead-times are all captured in the order forecast
    When Store inventory become out of balance, updated store orders forecasts reflect the impact on the warehouse by reducing or increasing the quantities needed.
    Maintain accurate PI at the store level
    Forecast maintenance
    Inaccuracy of the store order forecast, increasing level of noise at the warehouse
    “ For most retailers, over 80% of SKU/Stores do not sell a single piece per week ”
    Synchronizing Store - Warehouse demand
    Nicolas Sprotti - July 1st 2011
  • 9. What options for a multi-echelon forecasting and replenishment ?
    Synchronizing Store - Warehouse demand
    80%
    20%
    Compare and Chose the best one!
    Nicolas Sprotti - July 1st 2011
  • 10. What options for a multi-echelon forecasting and replenishment ?
    Synchronizing Store - Warehouse demand
    Nicolas Sprotti - July 1st 2011
  • 11. Synchronizing Store - Warehouse demand
    Multiple Point Replenishment - MPR
    Store POS sales
    Roll upProfile
    Forecast
    Store POS sales
    Store POS sales
    Offset by AvgDC / Store lead time
    Nicolas Sprotti - July 1st 2011
  • 12. Multiple Point Replenishment - MPR
    Advantages
    Disadvantages
    Reactivity with minimal forecast error.
    Promotions and store events can be accurately translated to DC/Warehouse Demand Forecasts
    Not need to maintain a PI
    This method does not respond to the impact of changing effective inventory at the individual stores.
    Forecast maintenance
    The technological complexity caused by the need to integrate
    Synchronizing Store - Warehouse demand
    Nicolas Sprotti - July 1st 2011
  • 13. Synchronizing Store - Warehouse demand
    Product Appropriateness Matrix
    FOOD
    NON FOOD
    Grocery / Frozen
    HBC
    Electric
    FashionPull
    Fresh
    C
    A, B
    Optimum
    Adapted
    Not Adapted
    Nicolas Sprotti - July 1st 2011
  • 14. Synchronizing Store - Warehouse demand
    Q
    A
    &
    Nicolas Sprotti - July 1st 2011