The project of optimization of replenishment action in Adidas shops using Microsoft Dynamics NAV

In the fall of 2011 of Adidas made in Impact-Soft company an inquiry for development of functionality for calculation of optimal inventory level in shops. Earlier for these purposes of Adidas used the algorithm developed and implemented by own forces. Over time there was a need of optimization of the existing algorithm of calculation of optimal inventory level for shops. Unfortunately, it had a number of shortcomings, and the decision on development and implementation of a new algorithm was made. ABC Replenishment – the algorithm used in Adidas headquarters in Germany was taken as a basis.

ABC Replenishment represents the procedure of calculation of optimal inventory level of goods in shop on the basis of a number of values, including ABC-grade of the article and the size.

According to offers of Adidas company Impact-Soft the module ABC Replenishment was implemented by employees in Microsoft Dynamics NAV.

Now when calculating optimal inventory level in shop there is an opportunity as basic parameters to use:

• statistics of daily sales of this article within the last two weeks,
• the seasonality coefficient calculated on the basis of sales in the same season 1 year and 2 years ago
• the current remaining balance in shop,
• delivery time in shop (taking into account territorial remoteness of shop).
• grades of the article and the size (is calculated on ABC analysis, for example grade And – the article enters 50% of sales, B – 30%, C – 20%)

As daily calculated quantity of lines the shop-article-size approximately equally in 4.5 million, employees in Impact-Soft used optimization of the appeal to a DB at the expense of a call of the stored SQL procedures. Calculation is implemented in the form of 6 parallel flows, each of which is performed on the Application Server. In case of failure of the equipment calculation is resumed from the interrupted place. On the central board of the person on duty information on possible hangup of process, or on the processes which were not starting in due time is issued. The magazine of start quickly displays the course of accomplishment of each flow.

ABC Replenishment gives the chance most effectively to calculate requirements of shop for replenishment action and optimization of purchases taking into account a number of the values, the most significant for specifics of business of Adidas company.

Staff of Impact-Soft company completely automated settlement process of optimal inventory level. While the previous algorithm allowed to work only in a semi-automatic mode, required involvement of human resources and did not consider ABC classification. The new algorithm allowed to increase the accuracy of calculation of replenishment, necessary for shop, by 10%.