Canadian Retailer - The Supply Chain & Logistics Issue - 25

IMPLEMENTING FLOWCASTING
To implement flowcasting, here are some important guidelines:
* Executive understanding, support and commitment is important
* The effort should be largely about changing business processes,
paradigms and behaviours-a focus on change management is
important. This necessitates time spent educating executives,
planners, merchants, operations and merchandise suppliers
* Walk before you run: cross-functional process labs, prototypes
and pilots can help teams internalize the education and new
processes and gives them the opportunity to provide input
and suggestions
* A software solution is needed that has the capabilities
required. PAL used a solution from JDA Software-the leading
provider of flowcasting technology
* Process coaching and support to help people ingrain the new
ways of working and unlearn the old

As sales happen, daily, the entire retail supply
chain is recalibrated. If sales are happening faster in one store for a particular item, then its next
planned replenishment is automatically moved
forward to ensure that the item does not go out-ofstock. If sales happen at a slower rate, then future
planned replenishments are pushed out-keeping
store inventory in check. The effect of these daily
'course corrections' are then immediately and
automatically recalculated into the plans for the
rest of the extended supply chain-from the store
shelf all the way to the supplier.
Benefits

The Flowcasting process has measurably and
significantly contributed to the following benefits:
* An increase of greater than 6 per cent in the
in-stock rate across all products in all stores,
regardless of the planning scenario
(e.g., including promotional periods, new
products, new stores, etc.)
* Increased same store sales
* Improved inventory turns at stores and DCs
* Improved inventory flow to the store shelf, resulting in a significant reduction in backroom
inventory and congestion at most stores
* Reduced costs throughout the organization as
a result of using the projections for planning
and flowing inventory to the shelf

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Improving collaboration and control

The flowcasting process has given Princess
Auto the capability to manage their business to a
single set of numbers-whereby all groups, including suppliers, are driven by a common forecast of
consumer demand and each department's plans
are the translated version of this forecast into
actionable information with which to improve service, cost and productivity.
Internal collaboration between merchandising
and supply chain teams has vastly improved since
they are now speaking the same language: sales.
Promotions planning and performance is a key
area where improvements materialized. Merchants
and demand planners collaborate and agree on a
sales forecast. And for situations where there is potential upside sales benefit, they can also agree and
plan, independent of the sales forecast, an inventory flow plan to potentially realize the sales.
Flowcasting has also improved collaboration
with vendors, by simplifying the information
shared and expectations. 52-week projections of
product purchases (i.e., planned purchase orders)
are shared with their vendors in the form of a supplier schedule and refreshed on a weekly basis so
the vendors have visibility to see future requirements and plan accordingly. The vendors use
these projections to plan raw materials and production and are adhering to the concept of "silence

THE SUPPLY CHAIN & LOGISTICS ISSUE

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