Teradata Demand Chain Management (DCM): Version 4
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Teradata Demand Chain Management (DCM) Release 4, launched on October 1, 2007, aims to optimize inventory management and improve sales by providing accurate demand forecasts and intelligent replenishment strategies. The solution addresses challenges such as out-of-stock rates, which average 7.9% nationally and lead to significant revenue loss, particularly during promotions. By leveraging advanced algorithms and historical data, Teradata DCM enhances alignment between inventory investment and customer demand, resulting in improved sales and inventory turnover rates.
Teradata Demand Chain Management (DCM): Version 4
- 1. Teradata Demand Chain Management (DCM) Release 4
- 2. Teradata Highlights • Teradata Corporation – Launched October 1, 2007 > Global Leader in Enterprise Data Warehousing – EDW/ADW Database Technology – Analytic Solutions – Consulting Services > Positioned in Gartner’s Leaders Quadrant in data warehousing since 1999 • U.S. publicly-traded software company > S&P 500 Member > Listed NYSE: “TDC” > NYSE Arca Tech 100 • Global presence and world-class customer list > Nearly 925 customers > More than 2,400 installations • 6,400+ associates
- 3. The Demand Chain Results Inputs • Accurate demand forecast • Location Sku: Time Series • Statistical and user defined Forecasts, Orders, Allocations replenishment plans • Individual location based • Actionable allocation plan Demand Pulls Product historical sales, future events • Inventory strategy, lead times, trend How much of each item do I need to have at each Location and when? Source Carrier DC Store Consumer Inputs Product Flows Efficiently End Results • PO data, Partners, Orders, • Product in the right place at the ASN’s right time • Expected ship and arrival (ETA’s) Is the ordered product moving efficiently • Improved sales and turns • Anticipated events through the supply chain to the Locations, • Customer satisfaction according to plan and latest trends? • Merchandise movements
- 4. The Opportunity Demand Chain Improvements! • After 40 years of investment in technology to address Out-of-Stocks and improve inventory productivity • Retail Out of Stocks average 7.9% nationally, over 10% on promoted items we still have • A typical retailer loses 4% of sales due to OOS > 8% to 10% OOS, doubling during promotions > Redundant and unproductive • Retailers experience OOS rates between 6% and inventories 10% for non-promoted products > Returns • For promoted products, OOS rates of 18% to 24% are not uncommon • In an AMR Research survey, almost 70% of shoppers surveyed said they would shop for OOS “ 10% reduction in out-of-stocks is the items at a competitor’s store or website equivalent of adding a billion-dollar brand.” – Jake Barr, Proctor & Gamble “ Staying in-stock remains the top revenue opportunity in North America.” – VP Sales, Top 5 CP Company
- 5. Teradata Solutions Demand Chain Management Financial Customer Management Demand and Supply Chain Solutions Management Teradata Demand Chain Management Seasonal Demand Contribution Profile & Intelligent Forecasting Profile Clustering Promotions Automated Time Phased Management Replenishment Replenishment Intelligent Product Capacity Allocation Introduction Planning Teradata Enterprise Data Warehouse Industry Logical Data Models
- 6. The Value Of Teradata DCM • Our extensive experience in implementing demand and supply chain solutions for leading global retailers, validate our ability to > Optimize regular and promotional store/SKU forecast and order accuracy > Improve promotional planning, and > Align inventory investment with customer demand • This results in > Sales increases ranging from 2% - 8% > Inventory turns increases ranging from 20% - 40% > Improved labor productivity and execution • This delivers a substantial net earnings increase and payback in less than 12 months after implementation
- 7. The Solution Teradata Demand Chain Management Regular and Replenishment Item and Allocation Capacity Promotional Contribution Point-in-Time and Planning Demand Forecast Time Phased DCM Modules DCM Modules DCM Modules DCM Module • Contribution • Seasonal Profile • Auto and Time • Capacity Planning • Demand Phased Outputs Outputs Forecasting Replenishment • Ranking of items • Shifting of orders • Promotions Mgt • Allocation based on sales to account for • Intelligent Prod dollars, sales units Outputs available DC Intro and gross margin • Up to 65 week order capacity dollars Outputs forecast • Regular and • Multiple time Promotional sku horizons location level and • Forecast based aggregate forecasts allocation with • Automated various methods Seasonal Profiles including • Multiple time contribution horizons from daily to 65 weeks
- 8. The Solution Teradata Demand Chain Management • Dynamic ranking of Product performance at any level of the product or location hierarchy • % Ranking according to contribution to sales units, sales dollars and margin dollars • As with everything else in DCM, contribution coding is done “bottom-up” at the Store/SKU level! > This enables greater precision (and ROI) in inventory investments > Enables localised assortment Item • Solution used to identify importance to the business Contribution • Automatically picks up Life Cycle changes DCM Modules • Contribution Contribution % Customer Service Level Outputs Code Contribution Actual Desired • Ranking of items based on sales dollars, sales A Top 60% 79% 99% units and gross margin dollars B Next 20% 83% 97% C Next 15% 95% 95% D Next 4% 100% 93% E Bottom 1% 100% 91%
- 9. The Solution Teradata Demand Chain Management • Automatically identifies products and locations that demonstrate similar seasonal selling patterns without hierarchical dependencies • Provides a forecast based upon actual consumer demand, accounting for lost sales due to stock outs Regular and • Use of multiple algorithms in parallel to drive Promotional greater forecast accuracy in a bottoms up approach Demand Forecast • Ability to forecast future promotions based upon DCM Modules past promotions’ results considering various • Seasonal Profile • Demand Forecasting promotional drivers • Promotions Mgt • Intelligent Prod Intro. • Simulation capability optimizes forecasts and orders Outputs • Provides the ability to intelligently match new SKUs • Regular and to existing SKUs in order to seed an initial forecast Promotional sku location level and for the new SKU aggregate forecasts • Automated Seasonal Profiles • Multiple time horizons from daily to 65 weeks
- 10. The Solution Teradata Demand Chain Management • Provides both point-in-time and time phased replenishment • Business policies transform the sales forecasts into replenishment orders, over multiple time horizons (daily to 65 weeks) • Time Phased Orders allow for Store-DC Synchronization Replenishment • Orders built at store and DC, approve or modify store and Allocation orders to DC for execution Point-in-Time and • User defined service levels, safety stock considers, Time Phased volatility, popularity, rates of sale, forecast accuracy DCM Modules • Auto and Time Phased • Supports a variety of Allocation methods and types Replenishment including forecast driven • Time Phased Replenishment • Integrated Replenishment and Allocation supports Outputs hold ‘n flow strategy for distribution • Up to 65 week order forecast • Multiple time horizons • Forecast based allocation with various methods including contribution
- 11. The Solution Teradata Demand Chain Management • Calculates DC capacity utilizations and adjustments needed to stay within capacity and support demand • Each week, corporate roll ups at cube, case and pallet are done for all order forecasts, for all locations, for a 65 week planning horizon • Can include the results of a Simulation from the Replenishment module 140,000 130,000 Capacity Planning 120,000 110,000 DCM Module • Capacity Planning 100,000 Outputs Week • Shifting of orders to 90,000 account for available DC capacity 80,000 70,000 60,000 50,000 32 33 34 35 36 37 38 Cumulative Shortfall 4,879 25,074 17,433 1,427 0 0 Requirement 58,665 63,275 67,426 75,067 91,073 135,143 80,171 Capacity 92,500 92,500 92,500 92,500 92,500 92,500 74,000 Cases
- 12. What Is Unique About DCM? • Provides a forecast based upon actual consumer demand, accounting for lost sales due to stock outs • Use of multiple algorithms in parallel to drive greater forecast accuracy in a bottoms up approach • Automated Seasonal Profiling identifies products and locations that demonstrate similar seasonal selling patterns without hierarchical dependencies • Ability to forecast future promotions based upon past promotions’ results • Dynamic ranking of product performance at any level of the product or location hierarchy, enables alignment between inventory investment and return • Time phased replenishment that provides synchronization of inventory throughout the supply chain and supports collaboration with vendors • Integrated Forecasting, Replenishment and Allocation solution • Scalability which enables a forecast to be calculated for every sku location weekly or daily and rolled up at any level of product/location hierarchy...resulting in improved accuracy
- 13. Teradata DCM Release 4 Dashboard/Workbench • Improved Usability through coherent navigation – less clicks • Change location/category selection without leaving screen • View details on Exception or SOQ without leaving screen • Provide meaningful information and alerts with minimal navigation • Focus alerts on actionable information • Alerts to tell user what to look at versus simply dumping information • Pre-defined layouts, flow and navigation by key roles • Flexibility for UI configuration • Maximum flexibility for configuring DCM Customer specific views • Role specific views – can be as simple or complex as desired • Define multiple pages for different processes/views • User preference to > include/exclude portlets > define same portlet multiple times for different scopes of data
- 14. Teradata DCM Release 4 KPI and Contribution Details • YTD, MTD, Week comparison • Actual, Plan and Forecast • Multiple Graph Types • Configurable Settings • KPI Metrics by Contribution • Breakdown by Sales $, Units, GM $
- 15. Teradata DCM Release 4 Exception Details • Exception Detail screen allows user to change the Location/Classification and Exception Type to view. • Available for Executives, H.O. and Store/DC Managers to review Exceptions at appropriate Location/Classification level from Exception Portlet in DCM Workbench. • Exception Summary panel displays each Exception Type: # SKU/Locations, trend arrows and sparklines for selected Location/Classification • User has ability to define which Exception Types to display and including optional trend arrows and sparklines in Exceptions Setting screen. • Ability to drill into the Exception Detail screen for a specific Exception Type to display SKU/Location detail grid with hyperlink to an Exception Popup Graph