Svyaznoy Group (Goods4Cast). Demand forecasting system implementation

Project History

In January, 2007 according to the results of the tender of Svyaznoy Ltd selected Forecsys company as system provider of demand forecasting.

For the choice of system provider of demand forecasting among the leading Russian and international IT companies a competition of forecast accuracy was held. Daily 5 participating companies gave the demand forecasts on the range of each of 10 outlets selected for carrying out tender. At the same time as the sixth participant Svyaznoy performed with the system of own development. When two-week statistics of forecasts of participants was saved up, Svyaznoy compared them to real sales of goods and selected the system of demand forecasting from Forecsys.

In July, 2007 Goods4Cast was brought into trial operation on 10 outlets of the Customer. In the fall of 2007 the system of demand forecasting was put into commercial operation on all (1600) outlets of network of the Customer.

Increase in forecast accuracy of demand allowed Svyaznoy to reduce losses from storage of expensive trade inventories and to reduce the amount of the half-received profit caused by temporary lack of goods in shops.

Approach basis

The basis of the project was formed by the Goods4Cast platform developed by Forecsys company for optimization of planning of activity of the company.

Project Features

Main objective of the project – reduction of trade inventories when preserving the same goods availability for buyers. A project task - deployment and setup of a system for automatic more exact demand forecasting and management of trade inventories of Goods4Cast.

At the first stage of works inspection of business processes was executed and the technical specifications on system implementation are approved. To library of algorithms of the Goods4Cast system it was decided to add prediction algorithms, usual for the Customer.

At the second stage the Goods4Cast system was customized according to the purchasing policy of Svyaznoy Ltd and integrated into information environment of the Customer.

At the runtime the project the Customer put into operation the new data warehouse about sales, and it was required to execute additional integration of a system with new data source.

Functional characteristics

• The Goods4Cast system automatically calculates the need for goods for each shop of network taking into account last sales, the factors affecting demand and also economic risks of inventory management.
• A system samoobuchatsya. For different goods different techniques of forecasting are used.
• A system daily defines the optimal number of the order of each goods in each outlet of retail network.
• System performance
• The Goods4Cast system is daily used for forecast calculation of demand for each of 1600 shops of Svyaznoy Ltd. The active range of goods contains 15000 names. For processing of such amount of data the workstation based on 2 x Dual Core AMD Opteron Processor 2218 2.6GHz, 16GB, is used by raid 600GB.

Forecast calculation for all outlets takes 4-5 hours a day.

Awards

Implementation of the system of demand forecasting of Goods4Cast by Forecsys company in Svyaznoy network is mentioned by an award of CNews AWARDS 2008 as the best IT project of 2007 in the Trade Upgrade nomination.