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
