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| Case Study |
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Customer specific forecasting model helps
global giant improve forecasting accuracy |
By leveraging Patni's expertise in SAP APO, a global conglomerate improved its forecasting capability
for key customer accounts
The Client
The client is one of the largest
conglomerates in the world and
operates in over 200 countries
across the globe.
The Challenge
For managing demand planning, the client was using Manugistics for its North
American operations. The North American division consists of two groups
responsible for demand planning - one group is responsible for national level
demand management while the other group focuses on demand planning for
high-value customers.
To enhance customer satisfaction and increase operational efficiencies, the
client desired to plan demand for individual customers based on optimum
order quantity. In this model, the actual Point of Sales (POS) data was to be
taken as the base, and optimum order quantity was to be calculated by
considering inventory policies and other constraints. However, calculation of
optimum order quantity was a challenging task as it was to be derived by
applying various parameters related to the customer's inventory policy,
demand and different time lags. By implementing this forecasting model, the
client desired to:
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Increase accuracy in its forecasting process for its key accounts |
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Separate the baseline forecast from promotion planning |
The Solution
As the client was already using SAP APO DP to manage demand planning in Europe, a decision
was taken to implement the same solution for its North American operations. Having delivered
a number of successful projects for the client, Patni was chosen for conducting a feasibility
study and implementing SAP APO DP for national and customer specific forecasting. Patni
partnered with the client to deliver a complete end-to-end solution which included Business
Analysis, Prototype Design, application design, application development and unit testing.
Despite challenges such as complex BW reporting requirements and huge data volumes, Patni
helped the client successfully meet its desired objectives within a short timeframe.
Solution highlights include:
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Development of a Point of Sales based CPFR (Collaborative planning forecasting and
replenishment) model for high-value customers |
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Development of algorithm for calculation of Optimum Order Quantity |
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Development of framework for specific analytical reports such as inventory trading. |
Due to Patni's solution, today, the entire demand planning is based on customer material
number and the customer calendar. This is linked to the client's SAP product number, product
hierarchy and customer calendar. Forecast data is fed to the BW for calculation and evaluation
of metrics like forecast accuracy and errors. To support the process, Patni designed reports
such as Forecast attainment reports, Waterfall reports, Collaborative Planning reports using
Perfect order calculations and BEx (Business Explorer) reports.
The Technology
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SAP BW 3.0b as Data Hub
and Reporting |
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SAP APO 3.0b for Forecasting |
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SAP R/3 4.6b for Material Mapping Information |
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UNIX Shell Scripts for Customer Files Processing |
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Autosys for Batch Scheduling |
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The Benefits
As the entire project was delivered using a dominant offshore
component, the client gained significant cost savings. Some key
benefits for the client include:
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Reduced instability in the inventory levels due to improved
forecast accuracy for key customer accounts |
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Increased competitiveness due to access to data generated at
the retail level. For example, retail information is available
in the global datawarehouse and can be shared by other
reporting applications |
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Enhanced customer service and communication between the
client and its customers |
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Availability of a solution that is easily maintainable - without
the complex & intense master data driven APO SNP module. |
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