Create a “Model of Your Business” with Flowcasting

Build Your Forecasts from the Store Level

Traditional forecasting and demand planning systems try to forecast store demand at the retail distribution center level based on shipments out of the DCs. But that doesn’t tell you anything about which items are actually selling or what the inventory levels are in each store. Without “demand driven” or “POS sense and respond” supply chain planning capabilities, trading partners across the retail supply chain can’t react efficiently to changes in consumer demand. They also can’t predict how demand changes impact operations in the factory.

Fortunately, there’s a new approach that makes perfect sense. With RedPrairie’s Collaborative Flowcasting (store level DRP), you only need to forecast at the item level within each store where true consumer demand begins. Flow this up through the supply chain to drive all other activities—from the store shelf to manufacturing plants and raw material suppliers.

RedPrairie’s Collaborative Flowcasting makes a completely integrated retail supply chain possible while providing substantial bottom-line benefits for both suppliers and retailers. Changes at the store level can be instantly visible to the manufacturer's plants, and everyone in the extended supply chain can work from a “Single Set of Numbers.”

Crack the “bullwhip” effect

Collaborative Flowcasting is based on the tried and tested principles of Distribution Resource Planning (DRP) s. But RedPrairie goes beyond traditional DRP solutions. Here’s how:

• Forecasts all products—fast, medium, slow and very slow movers—at the SKU/Store level
• Scalable to handle the huge volume of data generated at the store level
• Refreshed daily and based on actual store POS
• Integrated to RedPrairie’s industry leading store and supply chain execution systems

The system forecasts inventory requirements by analyzing each store’s POS and inventory data. This “item within store” forecast is then used to calculate inventory needs throughout the supply chain—so everyone is working from a consistent, single set of numbers.

This eliminates the forecast error and “bullwhip” effect induced by the typical practice of having separate forecasts at each level of the supply chain.

"Flowcasting has delivered the biggest single improvement in forecast accuracy in the history of Kraft. In a sense, Flowcasting has upended our existing thinking about the value of traditional forecasting and accompanying resources. The benefits naturally enough include lower inventory and increased sales."

— Tom Drake, director of Customer Replenishment at Kraft Foods

Results that impact your bottom line

Customers who have deployed RedPrairie’s store operations and/or supply chain execution solutions receive the added benefits of an integrated approach to planning and execution. This can efficiently direct the flow of goods and work throughout the replenishment process, and calculate the costs at each level. This allows you to make intelligent business decisions.

The Collaborative Flowcasting model goes beyond typical planning approaches, including:

• Shelves can be stocked based on demand, boosting customer satisfaction through improve On-Shelf Availability (OSA) and reducing out-of-stocks and overstocks
• Store-by-store recalculations are continuously updated to significantly improve promotion effectiveness and profitability
• Provides a more accurate picture of demand resulting in reduced safety stock at all levels
• Facilitates stronger, more collaborative relationships between manufacturers and retailers
• Brings an increased focus on growth and business goals—versus putting out fires
• Inventory planning and replenishment execution becomes part of an integrated process
• Provides retail executive management with a “Single Set of Numbers” to manage the business leading to a much Improved “Control of the Business”

True Innovation

The Flowcasting management concept has been developed by one of SC Digest's Top 10 Supply Chain Innovators of All Time. RedPrairie's Andre Martin, known as "The Father of DRP," has been credited with, in many ways, the start of today's supply chain planning software industry.