Ormatek optimizes raw material stocks using Korus Forecast service

2020: Optimization of raw material stocks using Korus Forecast service

On July 9, 2020 the CORUS Consulting company announced end of a pilot project on optimization of raw material stocks and materials in Ormatek company, the representative of the Russian commodity market for a dream. The solution is implemented on the platform of 1C for automation and a cloud serviceKORUS|of Forecast based on Microsoft Azure for forecasting of requirements. Project deliverables showed a possibility of reduction of inventory quantities for 50% without decrease in internal level of service. Implementation of management tools stocks will be the next stage of the project.

Ormatek was faced by a problem of optimization of raw material stocks, necessary for production more than 5 thousand ranges of finished goods. The producer was going to optimize amount of the materials which are stored in warehouses, but without an opportunity to precisely predict sales and also without mechanisms of management of commodity turnover and safety stocks, to buy was risky less.

For improvement of forecasting of needs for input products, optimization of planned turnover of warehouses and release of financial resources, frozen in stocks, Ormatek involved specialists of CORUS Consulting Group. Experts of the IT company offered KORUS|Forecast, service based on machine learning and technologies of Big Data for demand forecasting unrolled in Microsoft Azure cloud for forecasting solving of tasks.

"The complexity of work with Ormatek was that to predict sales of such piece goods as a mattress, impracticablly. We suggested to group products made of an identical type of raw materials and thus received several hundred clusters. The forecast model of sales works with them – and we determined the number of running meters of the specific fabric necessary in stocks in a warehouse by the obtained data on the production specification", 'Konstantin Dobrotok, the head of the Service Lab group of department of analytical solutions of CORUS Consulting Group noted'

For optimization of planned turnover of raw warehouses specialists of Corus Consulting designed tools of an ABC-categorization of the nomenclature and setup of planning parameters of deliveries depending on nomenclature belonging to this or that category – all this in the ERP system of Ormatek. Approach will allow to automate parametrization of a large number of nomenclatures and to support the minimum stock without risks for the level of service. The double categorization which considers not only a share in cost value, but also an expense of pallets is applied to decrease in load of warehouse spaces to a number of raw groups.

Specialists of Corus Consulting provided the mechanism of calculation of the safety stocks intended for a covering of not anticipated demands. It considers cycles of deliveries, average error amounts for a certain period and other factors. The mechanism will help Ormatek to avoid cases of deficit of input products.

"We suggested implement mechanisms of inventory management and planning of deliveries in the system of 1C used Ormatek. She will receive from KORUS 'Denis Saltykov, the business architect of group of departments of ERP of CORUS Consulting Group emphasized'

"During a pilot project forecasting in KORUS 'Kirill Karapchuk, the director of supply chain management of Ormatek noted'

For July, 2020 specialists of Corus Consulting implement integration between service KORUS|Forecast and the platform of 1C, finish inventory management mechanisms. During the project the ABC/XYZ/FMR categorization tools, the analysis of statistics of out-of-stock, forecasting accuracy, increase in level of customer service will be implemented and finished. Step-by-step start of the solution on different raw categories within three-six months from the moment of the beginning of use is supposed.