Distribution-free forecasting methods help to optimally assess customer expectations
By Felicitas Heid-Davignon (Anita Dr. Helbig GmbH) and Dr. Bernd Reineke
Hardly any other industry is as dependent on the correct assessment of sales potential as the clothing industry. Anita Dr. Helbig GmbH therefore decided to use the DISKOVER SCO (Supply Chain Optimizer) forecasting and scheduling system to support sales planning in order to forecast customer expectations as optimally as possible using scientifically supported distribution-free forecasting methods. The special feature of this installation is the black box, which works in the background. This means that no training is required to select the appropriate procedure, as the system works independently.
Anita Dr. Helbig GmbH manufactures and sells corsetry and swimwear in large cups and sizes for expectant and nursing mothers as well as for women who have undergone breast surgery, for young fashionable women with large bust sizes and strong women who need relief. As a stock manufacturer, the bodice specialist relies on good planning quality in order to avoid unnecessarily high stock levels while still being able to deliver the items ordered by customers on time. A particular problem for Anita Dr. Helbig is that the number of new models and/or color designs is constantly increasing. As a result, the number of planning items is constantly increasing. The greater number of variants also increases the irregularity, which makes it all the more difficult to estimate the sales figures for each planning item. In the past, sales figures were calculated by averaging past values. As a result, product trends were only recognized very late and the quality of planning declined as the product range changed more frequently. This led to increased stock levels for non-turners and a lack of availability for items in high demand, which is particularly annoying for sales and customer satisfaction.
To improve the situation, Anita Dr. Helbig decided to support the planning process with a specialized planning tool. The DISKOVER SCO system from Abels & Kemmner GmbH was chosen. The reasons that tipped the scales in favor of DISKOVER SCO were:
- Possibility to simulate the supply chain with the target delivery readiness level as an optimization criterion and selection of the most suitable forecasting methods and parameters
- Dimensioning of suitable safety stocks to cushion sales fluctuations and supply bottlenecks
- Possibility of automated determination of sales expectations without manual effort.
Before DISKOVER was implemented, a detailed analysis of the sales items was carried out (see reference number 342). By simulating several scenarios, the readiness to deliver and the inventory level were optimized. In particular, the addition of distribution-free methods showed significantly better results than simulations without these control variables.
Distribution-free methods should always be used if the fluctuation in consumption values per period is not normally distributed. Experience shows that only approx. 25% of all consumption series are normally distributed, i.e. three quarters of the items to be forecast do not have a normal distribution. Such items can therefore only be forecast to a limited extent or not at all using the standard methods of conventional forecasting or ERP systems, as these usually only offer methods that assume a normally distributed demand (e.g. mean value method, exponential smoothing). If the normal distribution is not given, conventional forecasting methods produce very inaccurate results and lead to incorrect delivery readiness levels.
At Anita, Dr. Helbig GmbH, DISKOVER SCO was initially only to be used to optimize demand forecasts. However, special requirements, such as the regular adjustment of batch sizes, e.g. taking packing units into account, could also be solved and implemented within a short time. After coordinating the data structures and additional functionalities, DISKOVER SCO was put into operation in just a few weeks. When selecting the DISKOVER database, expensive and complex solutions such as MS-SQL or Oracle were deliberately avoided. Microsoft Access was selected as an inexpensive solution, which is completely sufficient in terms of both the expected data volume and performance and also offers simple options for evaluating the data flexibly and in line with requirements.
For the optimization, DISKOVER SCO receives the interface data such as master data, movement and order data in the form of ASCII files with a pre-agreed structure. Optimization runs lasting several hours are then carried out once a month, usually at the weekend. After optimization, the results are transferred back to the higher-level ERP system based on an IBM AS400 computer in the form of text files. DISKOVER SCO therefore works as a black box in the background without direct intervention by the dispatcher.
Due to the high degree of automation, this solution can be operated without great effort. And since DISKOVER SCO acts as a black box, no training is required. The monthly optimized forecast data is made available in the leading ERP system without changing the front end. Consequently, nothing has changed for the dispatchers. Only the delivery readiness and the inventory situation improved continuously. All this is achieved without much intervention in day-to-day business and simply by selecting the right scheduling procedures and parameters. The question remains as to why not all companies are doing this yet.
About Anita
As a specialist supplier of corsetry, swimwear, e.g. also for expectant and nursing mothers or special medical products for the aftercare of breast operations, Anita forms a competent, internationally active network of 20 individual companies with a total of approx. 1,200 employees and an annual turnover of approx. 80 million euros. The share of sales outside the core markets of Germany and Austria is already well over 50% and is rising sharply. Sales are preferably handled by the company’s own subsidiaries, in some cases via exclusive importers.
In the global market, the Group enjoys an excellent reputation as a niche provider of high-quality specialty bodices and can count itself among the most entrepreneurially successful companies in the clothing industry. The company’s own production sites are located in Germany, Austria, Portugal, the Czech Republic and the Far East. In addition to sampling, practically all prefabrication takes place at the Brannenburg site. The highly elastic materials used place special demands on the cutting of the parts in order to achieve the best fit. Cutting to size is therefore a core competence in the production process. This and the technical complexity of cutting on a cutter line mean that this work step is largely concentrated at the Brannenburg site. The company sells a wide range of products, which is reinforced by the wide range of sizes that it serves and for which the company is known on the market. Four product ranges are sold in the corsetry segment, which differ in terms of their target groups, their demand structure, their contribution margins and the dynamics of fashion changes (Care; Maternity; Classics; Rosa Faia). There are also bathing collections for the same target groups, which are produced to pre-order.
Felicitas Heid-Davignon is Head of Logistics at Anita Dr. Helbig GmbH in Brannenburg.
