Responsiveness Requires Flexibility
Today’s fashion retailers require flexible distribution models to more quickly adapt to the quickly changing market trends. To be competitive, it is no longer acceptable to set and forget the stores based on allocations created weeks, months, or years in advance. We understand that retailers are being pressured to adapt mid-stream during seasons to react to trends in the marketplace, anticipating trends based on the latest store-by-store performance and reacting quickly, by staggering orders, and holding back inventory at the distribution centers. Unfortunately, traditional allocation and replenishment systems have not kept up with these demands for flexibility.
Teradata’s allocation and replenishment solutions leverage science to support merchant experience. While science and automation cannot replace experience, it can give retailers more time, information, and leverage to make smarter decisions.
With our integrated allocation and replenishment solutions, retailers have the ability to push product based on forecasts and the latest sales early in the season, or use automated pull replenishment in-season. Further, Teradata Corporation’s solutions utilize breakthrough forecasting and replenishment techniques to allow retailers to put fashion or fashion basics on hybrid allocation or full replenishment during the season.
More Options. More Opportunity.
Teradata’s vision for fashion retail product distribution is to offer retailers a choice of how they want to distribute product rather than being constrained by the tools available to perform the distribution. The choice to push via allocation or pull via replenishment should not be constrained by incompatible, non-scalable, and inflexible systems, but should be based on the nature of the product, where the product is in its life cycle, and how much history is available to back up push vs. pull distribution decisions.
Product integration between allocation and replenishment means users can allocate product, replenish product, or seamlessly use a combination depending on business need. Each application leverages features from all other application modules within DCM. For example, DCM Allocation utilizes replenishment capabilities and leverages the most accurate store-sku forecasting solution in the marketplace, which has been proven at the world’s largest retailers. Retailers can also choose replenishment-like allocation methods like Days of Supply and Suggested Order Quantity. DCM Replenishment leverages allocation concepts as well. For example, replenishment incorporates constrained product logic when sending scarce product supplies to stores.
Teradata DCM Forecasting has been designed with fashion retailers in mind. Traditional forecasting solutions typically utilize very rigid, long-term forecasting techniques that are only suitable for basic products. Teradata DCM uses long-term forecasting techniques for truly stable basic products, but also utilizes techniques that make forecasting suitable for fashion basic and true fashion products as well. For example, forecasting techniques take into account seasonal products and partial year sales. Automated routines seek out partial year sales and dynamic trending allows for short-term, volatile product sales that occur with fashion goods early in the season.
Teradata DCM Time Phased Replenishment provides sales and order forecasts up to 65 weeks in the future. DCM uses forecasted sales and the retailer’s business rules for product minimums, maximums, service levels, Days of Supply coverage, and other replenishment rules as well as expected allocations to provide a week-by-week view of expected inventory levels and orders. These time-phased orders are used by the distribution center as a forecast, dramatically improving DC forecasts and inventory levels. DC’s can also use these orders to determine capacity using DCM Capacity Planning to understand projected capacity issues with space or personnel and act proactively to avoid capacity issues. Time Phased Replenishment also allows suppliers to have visibility into the retailers’ expected orders for both replenishment and allocation well in advance of production, supporting product collaboration.
DCM has been designed as an integrated, scalable application with multiple components that can be used together as a seamless single application; however, individual components can also be implemented separately depending on your business needs and implementation timeframes. Application components include multiple forecasting, allocation, replenishment, and capacity planning modules.
Here's a quick look at the modules that make up Teradata DCM:
Provides dynamic stratification ranking of merchandise categories and location combinations based on their contribution to the success of the business. Leveraged throughout the product to set alert priority, distribute product, and manage service levels.
Supports all standard methods of allocation along with advanced intelligent forecasting methods to manage pre-allocation, purchase order allocation, and distribution center on-hand allocation.
Automatically creates seasonal models for groups of items with similar seasonal patterns, shortening the time-consuming profiling process by up to 90% and greatly increases forecast accuracy.
Considers both an item’s seasonality and its rate of sales (sales trend) to generate an accurate forecast automatically selecting the most accurate forecast method.
Intelligent Product Introduction
Intelligently and automatically links newly introduced items to similar items to generate an accurate forecast for new product introduction.
Automatically calculates the additional stock needed to meet the increased customer demand resulting from promotional activity.
Enables the management of replenishment both at the distribution center and store level, employing user-defined business policies. Replenishment calculations consider business policies such as service levels, forecast error, risk stock, review times, and lead times.
Time Phased Replenishment
Provides a weekly long-range order forecast that can be shared with vendors to facilitate collaborative planning and order execution. Logistical and ordering constraints can be simulated to improve the synchronization of ordering with individual store requirements.
Looks at the available throughput of the retailer’s distribution centers and identifies when the available capacity is going to be exceeded by the forecasted demand.
Accurate Answers. Quick Return.
Our Teradata DCM solution drives significant ROI through improved customer service levels and reductions in unproductive inventory. The bottom line: typical Teradata DCM projects deliver multi-million dollar ROI and payback less than 12 months after implementation.
The Teradata Demand Chain Management solution is a dramatic new approach to building more accurate demand forecasts, as well as enabling you to build stronger, more collaborative relationships with vendors and suppliers.
For More Information
To find out more about how the Teradata Demand Chain Management solution can help you grow a better, more productive business, contact your Teradata representative or visit Teradata.com/dcm.