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RELEX Solutions Acquires Optimity for Unified Upstream Optimization Capabilities
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CASE STUDY: ATRIA
FORECASTING AND DEMAND PLANNING
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6PP
Forecast accuracy increased
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+90%
Volume-weighted forecast accuracy on a weekly level
TURNOVER
1.411 Bn€
PERSONNEL
4668
PRODUCTS MANUFACTURED
approx. 1,000
WEBSITE
Atria introduced RELEX systems to make its forecasting and demand planning more
efficient and more accurate. With RELEX’s help Atria has managed to increase its
sales forecast accuracy by six percentage points.
Atria is one of Finland’s largest suppliers of meat products and a leading food
company in Russia, the Baltic states and across the Nordic region. Atria’s
clients are predominantly in the grocery retail, the food service sector and
food industry.
> “It was clear that with the help of RELEX we could improve our planning
> accuracy while also streamlining our processes.”
>
> Jaakko Takala, Supply Chain Management Director, Atria
CHALLENGES AND GOALS
Supply chain management in the meat product sector is very challenging. The
procurement process is inseparable from the breeding and raising of animals and
lead times therefore vary from about 18 weeks to 3 years. The cost of the meat
as a raw material is the main cost element of the final product. That means
careful long-term planning is essential to ensure the best possible balance
between the supply of meat, production and sales. As the final product’s
shelf-life is short, very accurate day-by-day forecasts are essential to guide
production, ensure high availability and minimize wastage. Both are equally
important and have to be handled side by side.
Before Atria started working with RELEX it had custom-built systems for both
short and long-term forecasting and planning.
The main forecasting-related challenges for Atria come from situations like
customer-led promotions, big retailers’ buying decisions, product launches and
seasonal demand forecasting. High-level planning was also complicated by
foodservice customers that sometimes generated very high, often
seasonally-related, demand peaks.
Atria set the following goals for improving the efficiency of its forecasting
process:
* Combining short-term and long-term forecasting in the same uniform process
and implement them in the same system.
* Making the forecasting more efficient using quantitative forecasting models.
* Better support systems for managing and analysing campaigns, customer
assortment decisions and seasonal volumes.
RELEX SOLUTION AND IMPLEMENTATION
Having looked at several options, Atria chose RELEX, describing the decision:
“RELEX’s forecasting solution met our needs precisely,” says Atria’s director of
supply chain management, Jaakko Takala. “We were especially pleased that the
system offered a complete suite of tools with well thought out, well-tested and
intuitive workflows for both forecasting the base demand and managing special
situations. It was clear that with the help of RELEX we could improve our
planning accuracy while also streamlining our processes.”
Using RELEX’s statistical forecasting models, Atria has been able to bring
forecasting down to a customer-chain level, at the same time taking into account
variations in delivery volumes on different days of the week. The forecasts are
continually calculated on a customer chain-product level looking 18 months
ahead. By consolidating the forecasts at a planning-group level it is possible
to produce data for long-term raw-materials planning. Takala comments: “Even the
base demand forecasts produced by the system are more accurate than those that
can be produced manually.”
The information about Atria’s customers’ planned campaigns and assortment was
loaded directly into the system using an automatic data transfer interface. “In
addition to a planning tool, by opting for RELEX we also got a data warehouse
that makes it easy for us to analyse customers’ past promotions and their impact
on sales,” says Takala. “And that gives us information that’s invaluable for
planning future campaigns. When managing seasons having access to and being able
to analyse information about customer pre-orders and the assortment at
individual stores is extremely important.”
> “Personally, given my previous experience of IT projects, I was even a little
> surprised at how well everything went.”
>
> Jaakko Takala, Supply Chain Management Director, Atria
As a part of the implementation project, RELEX and Atria’s existing ERP-system,
Infor M3, were integrated. After the technical implementation was carried out
the planning process was moved over to the RELEX system one customer group at a
time. “The implementation and integration were no big deal,” says Takala.
“Personally, given my previous experience of IT projects, I was even a little
surprised at how well everything went.”
RESULTS
Atria’s main aim was to improve its forecast accuracy. That goal has been
achieved with accuracy increasing by over 6 percentage points; the
volume-weighted forecast accuracy on a weekly level is over 90%.
In conjunction with the introduction of RELEX systems, Atria’s forecasting has
been centralised to a skilled planning team. As a result the process has evolved
and become easier to manage and develop further.
Another area of development has been the move to rolling planning, which also
forms the basis of the sales budget. “Accurate forecasts on a customer-chain
level will allow us to assess our performance against sales targets more quickly
and to target corrective measures more effectively,” says Teemu Pitkänen, Sales
Director at Atria.
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FORECASTS ARE MORE CONSISTENT
Previously, occasional large errors in forecasts had caused problems in
production planning.
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MORE EFFICIENT FORECASTING PROCESS
Also allowing better support for the planning of customer-specific campaigns,
the management of customer chains assortment decisions and planning the seasonal
sales.
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EASIER ANALYSIS OF THE INTERNAL DECISIONS
Using the system, one can easily analyse the impact promotions and assortment
decisions have on demand.
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ONE SYSTEM FOR SHORT TERM AND LONG TERM PLANNING
Both short-term and long-term planning are based on the same forecasts and
carried out in the same system.
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TIME SAVINGS
Using statistical forecasting frees up time for planning for special situations.
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