Disposition of hair and beauty tools with successor relationships

The company can only consolidate this strong market position through constant innovation. The rapidly changing hair accessories sector accounts for the largest share of the number of articles. This also includes accessories, some of which are only available for one season. But even with less trend-oriented products such as hairbrushes and combs, PARSA Beauty is constantly trying to create new added value. The entire product portfolio of around 5000 items is therefore subject to constant, sometimes extremely rapid change.

This high level of dynamism is a major challenge for replenishment: stock has to be planned in such a way that there is no old stock left when new collections are released. After all, all sales shelves need to be stocked with the latest trend merchandise as quickly as possible in order to promote sales in the best possible way. Precise replenishment is therefore very important for the company’s success and has to be set up perfectly and repeatedly every season. This used to be very time-consuming.

The challenge: increasing efficiency in inventory management

The scheduling processes at PARSA Beauty were heavily characterized by manual, Excel-based methods. This approach was not only time-consuming, but also error-prone and offered little flexibility to efficiently manage the very agile product range. Each item had to be planned individually. Due to the sheer volume of 5,000 items, this could only be done once a month – and it took a whole week for all the data to be updated.

“We were caught in a constant battle with our inventory data and felt like we weren’t being strategic enough,” explains Gilles Orciari, who is responsible for demand planning at PARSA Beauty.

Just a few years after switching to SAP, PARSA Beauty was therefore looking for a new solution for replenishment management that would offer a range of key functions that had previously been insufficiently available. Above all, Orciari was looking for improved transparency for more efficient strategic planning of trend articles.

The challenge: fleeting trend articles have no history

The challenge: trend items often have short dwell times on the market, which makes it difficult to calculate forecasts, safety stocks and replenishment proposals. “Trend articles are short-lived and their life cycles are sometimes less than 12 months, which is usually required for a solid consumption time series,” explains Orciari. As a result, the consumption time series are not always long enough to produce reliable forecasts.

Extended inheritance of consumption

However, one way to extend the consumption time series is to inherit consumption. “Ideally, new items should only come onto the market once the predecessor or predecessors have been sold off,” explains Orciari. “However, the successor is usually not automatically aware of the predecessor’s inventories and incoming and outgoing items, which makes the successor’s planning difficult and time-consuming.”

Solutions such as SAP only allow one predecessor as standard. However, PARSA Beauty was looking for a solution that would allow multiple predecessors to be referenced to a new item. In accordance with the FIFO principle, the oldest versions can always be sold off completely before a newer version is ordered. The ranges are determined across all versions and potential order proposals are always determined for the latest version. For this reason, the company was looking for a much more efficient system for relationship management.