The study ofretail enterprises chainDemandforecasting inthe supplychainmanagementAbstract: Forecasting is an important content of demand management and the sourceand foundation of supply chain operations; it also is a starting point of the chain retailenterprise supply chain optimization demand management. Our chain retailenterprises want to reduce supply chain inventory, improve service levels, andimprovethe competitiveness ofthe enterprise in thefierce competition intherapidreflect market demand,it mustconstantlyimprovetheaccuracyof demandforecasting. In this paper, by analyzing the present situation of our chain retailenterprises supply chain demand forecasting and the existing problems, expounds thedemand forecast deviation to the serious consequences of the chain retail enterprisesand the whole supply chain, and puts forward the methods and steps of improvingdemand forecasting accuracy.Keywords: chain retail supply chaindemand forecasting1. Supply chain management and demand forecastingFor chain retail enterprise, supply chain management is the modern managementtheoryas thepowerful weaponto achieve competitive advantage,itrefers to chainretail enterprises as the leading enterprises of the supply chain, upstream ordownstream through improved supply chain relationships, integrating and optimizingthe flow of information in a supply chain, logistics, capital, quickly reflect the needsof customers, with right quantity, right quality, at the right place, right time, with thebest cost and theright priceforthegoods production and salesChain retail enterprise supply chain demand forecasting is mainly refers to predict endconsumers will buy products quantity. If demand forecasting and the actual demanddifference are too big, they will have great influence on the supply chain operation,lead to increase the operating costs of the supply chain, reduce customer satisfaction,especially those with the change of market trends, and closely linked with the brandmarketing and market events, greatly influenced by factors such as season, advertising.salespromotionproduct.Accurate demand forecasting can quickly reflect market demand, thereby reducingsupply chain inventory, with the lowest cost to provide customers the best qualityservice to improve the competitiveness of the enterprises. Therefore, demandforecasting link running and optimization of the supply chain has a crucial role.2. The analysis of the present situation of supply chain demand forecasting of chainretail enterprises2.1 Ignore the demands of consumersSupply chain is run through the entire process of circulation of commodities,including raw material suppliers from starting, to production, to retailers, to variousstoresandsupplyofgoodsshelves,waseventuallypurchasedbyconsumersandprovide consumers with all related services processes, and includes some reason the
The study of retail enterprises chain Demand forecasting in the supply chain management Abstract: Forecasting is an important content of demand management and the source and foundation of supply chain operations; it also is a starting point of the chain retail enterprise supply chain optimization demand management. Our chain retail enterprises want to reduce supply chain inventory, improve service levels, and improve the competitiveness of the enterprise in the fierce competition in the rapid reflect market demand, it must constantly improve the accuracy of demand forecasting. In this paper, by analyzing the present situation of our chain retail enterprises supply chain demand forecasting and the existing problems, expounds the demand forecast deviation to the serious consequences of the chain retail enterprises and the whole supply chain, and puts forward the methods and steps of improving demand forecasting accuracy. Keywords: chain retail supply chain demand forecasting 1. Supply chain management and demand forecasting For chain retail enterprise, supply chain management is the modern management theory as the powerful weapon to achieve competitive advantage, it refers to chain retail enterprises as the leading enterprises of the supply chain, upstream or downstream through improved supply chain relationships, integrating and optimizing the flow of information in a supply chain, logistics, capital, quickly reflect the needs of customers, with right quantity, right quality, at the right place, right time, with the best cost and the right price for the goods production and sales. Chain retail enterprise supply chain demand forecasting is mainly refers to predict end consumers will buy products quantity. If demand forecasting and the actual demand difference are too big, they will have great influence on the supply chain operation, lead to increase the operating costs of the supply chain, reduce customer satisfaction, especially those with the change of market trends, and closely linked with the brand marketing and market events, greatly influenced by factors such as season, advertising, sales promotion product. Accurate demand forecasting can quickly reflect market demand, thereby reducing supply chain inventory, with the lowest cost to provide customers the best quality service to improve the competitiveness of the enterprises. Therefore, demand forecasting link running and optimization of the supply chain has a crucial role. 2. The analysis of the present situation of supply chain demand forecasting of chain retail enterprises 2.1 Ignore the demands of consumers Supply chain is run through the entire process of circulation of commodities, including raw material suppliers from starting, to production, to retailers, to various stores and supply of goods shelves, was eventually purchased by consumers and provide consumers with all related services processes, and includes some reason the
above commodity flows in the opposite of the reverse process (such as income, theconsumer returned merchandise, etc.)throughout the process.Throughout the process,all the links arefrom consumer demand togradually complete. In this process, everystep out of line will result in the entire supply chain issues, and even paralysis.Therefore, supply chain management should be consumer-centric, to predict consumerdemand in thereal concern basis.2.2Classificationof goods aredisordered and duplicateRetail chains in the early stage of operation, the types of goods areless, so it is easy tomanage, and therefore requires only a simple classification can operate. But now, withthe development of reformand opening times, China has entered into the"materialrich"state.Withthetypesof goodsincreases,thedifficulty of management isalsogradually increasing.The majority of our retail chains category management is not yetmature, restricted the business management efficiency. Retailers found that thenumber of goods is not proportional to the sales performance and customersatisfaction. Store large increasing in the redundant goods did not provide the suppliersales growth, but by a lot of repetition and homogeneity commodity suppliers dilutethe sales scale,making the enterprise overall sales growth did not providethe suppliersales scale of synchronous growth, and leading to scale did not increase enterprisebenefit. As the growth of the number of stores and scale, the number of products andsuppliers with sharp growth, and the commodity management ability and efficiency isdeclining,management costis increasing2.3 Forecasting models are traditional and singleImplementing category management is for the purpose of more effectively discoverand meet the retailer's target shoppers, thereby improving performance, but a lot ofchain retail enterprise when carries on the demand forecast, only pay attention to theprediction of a single product demand, did not predict according to category. Themain cause of the problem in, distinguishing different category in different markets.stores, and the prediction information group is difficult, and enterprises have nochoice when using these vast amounts of information. In reality, every store buyingpatterns are different, in different stores, the same type of product sales model isdifferent, the prediction model of single goods cannot meet different category forecastrequirements.2.4 Not enough scientific prediction methodDemand forecasting methods mainly include qualitative forecast and quantitativeforecast and integration of the two methods of prediction. At present most of the retailchains in history data as the basis of demand forecasting, also the effects of thepromotion plans in demand forecasting. But there are still many small retailenterprises only by hand or experience. In most cases, only relying on manual work isdifficult to accurately for demand forecasting, need some information tools to helpenterprises to realize precise demand forecasting and optimal management. And fromexperiencetopredict,morecannotguaranteeitsaccuracy2.5 The lack of coordination with suppliersOur chain retail enterprises and suppliers of cooperation are still in its infancy.Duetothe emergence of newforms,the competitions between retailers are serious.Retailers
above commodity flows in the opposite of the reverse process (such as income, the consumer returned merchandise, etc.) throughout the process. Throughout the process, all the links are from consumer demand to gradually complete. In this process, every step out of line will result in the entire supply chain issues, and even paralysis. Therefore, supply chain management should be consumer-centric, to predict consumer demand in the real concern basis. 2.2 Classification of goods are disordered and duplicate Retail chains in the early stage of operation, the types of goods are less, so it is easy to manage, and therefore requires only a simple classification can operate. But now, with the development of reform and opening times, China has entered into the "material rich" state. With the types of goods increases, the difficulty of management is also gradually increasing. The majority of our retail chains category management is not yet mature, restricted the business management efficiency. Retailers found that the number of goods is not proportional to the sales performance and customer satisfaction. Store large increasing in the redundant goods did not provide the supplier sales growth, but by a lot of repetition and homogeneity commodity suppliers dilute the sales scale, making the enterprise overall sales growth did not provide the supplier sales scale of synchronous growth, and leading to scale did not increase enterprise benefit. As the growth of the number of stores and scale, the number of products and suppliers with sharp growth, and the commodity management ability and efficiency is declining, management cost is increasing. 2.3 Forecasting models are traditional and single Implementing category management is for the purpose of more effectively discover and meet the retailer's target shoppers, thereby improving performance, but a lot of chain retail enterprise when carries on the demand forecast, only pay attention to the prediction of a single product demand, did not predict according to category. The main cause of the problem in, distinguishing different category in different markets, stores, and the prediction information group is difficult, and enterprises have no choice when using these vast amounts of information. In reality, every store buying patterns are different, in different stores, the same type of product sales model is different, the prediction model of single goods cannot meet different category forecast requirements. 2.4 Not enough scientific prediction method Demand forecasting methods mainly include qualitative forecast and quantitative forecast and integration of the two methods of prediction. At present most of the retail chains in history data as the basis of demand forecasting, also the effects of the promotion plans in demand forecasting. But there are still many small retail enterprises only by hand or experience. In most cases, only relying on manual work is difficult to accurately for demand forecasting, need some information tools to help enterprises to realize precise demand forecasting and optimal management. And from experience to predict, more cannot guarantee its accuracy. 2.5 The lack of coordination with suppliers Our chain retail enterprises and suppliers of cooperation are still in its infancy. Due to the emergence of new forms, the competitions between retailers are serious. Retailers
continued to pursue efficiency and profit maximization. And invested heavily todevelop its own brand, but due to the lack of professional production andmanufacturing,ownbrand it is difficult to success; In thepursuit of scale advantage,quickly set up shop, set up their own distribution center,purchase of POS system, butsince there is no common standards and IT language, logistics and information is hardto match the retailers and suppliers, scale advantage is difficult to establish, lead tolow efficiency of supply chain, the overall costs.Although many our countries chain enterprises have applied VMI (Vendor ManagedInventory), due to the limited suppliers in upstream and downstream enterprisesoverall coordination level.The lack of cooperation consciousness leading to thesupplier's inventory costs add and increase the risk of suppliers,so the VMImanagement pattern has not effectively under the mode of supply chain demandforecasting.3. The consequences of demand forecasting deviating from the marketThe total supply chain inventory including in the warehouse, on distribution andinventory on the shelves.Demand forecasting is higher than the actual level ofdemand will bring enterprise backlog of inventory. The phenomenon is the "bullwhipeffect".Duetotheexistenceof thebullwhip effect,retail chainsvariationof demandforecasting errors in amplifier, thereby increasing its upstream manufacturers andsuppliers of the production, supply, inventory management, and marketing ofinstability.High inventory not only reduce the cash flow,increase the operating costs,will slow market reaction speed, increase due to the product expired, the damagecaused by the loss. Once an enterprise in the supply chain to improve the accuracy ofthe forecast, and a series of stable business plan, it can start smoothly carry out sales,production, distribution, or other operations, such as inventory, shipping,transportation, reverse logistics, service and other business, and improve efficiency.3.1ReducingtheservicelevelDemand forecasting deviating from the market in improving part of the inventory, it atthesametimecanbringothergoods out ofstock.In2o03,theChinaassociation ofchain management in collaboration with Roland Berger consultant's rate of Chinesegoods out of stock, the survey found domestic retailers of goods shortage rate at about10%.Whenever somegoods out of stock, stores of other merchandise to tally staffwould be displayed in the position of shortage of goods, caused the appearance ofstore shortage rate is low, so blinded by retail enterprise headquarters. Over the longterm, the best-selling products on the shelves will be less and less, unsalable goodswill be filled with, even if this kind of goods after the arrival of the goods, cargohandling personnel may also think display goods shelves have been selling goods instock for a long time.Stakeout rate is one of the indicators measuring chain retailenterprise service level, the shortage rate is higher, the lower the service levelAccordingto statistics, if all stores canguarantee thebestgoods intheframe rate,soevery storeincreasedaverageannual salesof upto6.4millionYuan3.2Lossofcustomers'loyaltyDemand forecast deviation to retailers can't provide timely and effective servicesaccording to customerrequirements,leadingtoa loss of customers.For customers
continued to pursue efficiency and profit maximization. And invested heavily to develop its own brand, but due to the lack of professional production and manufacturing, own brand it is difficult to success; In the pursuit of scale advantage, quickly set up shop, set up their own distribution center, purchase of POS system, but since there is no common standards and IT language, logistics and information is hard to match the retailers and suppliers, scale advantage is difficult to establish, lead to low efficiency of supply chain, the overall costs. Although many our countries chain enterprises have applied VMI (Vendor Managed Inventory), due to the limited suppliers in upstream and downstream enterprises overall coordination level. The lack of cooperation consciousness leading to the supplier's inventory costs add and increase the risk of suppliers, so the VMI management pattern has not effectively under the mode of supply chain demand forecasting. 3. The consequences of demand forecasting deviating from the market The total supply chain inventory including in the warehouse, on distribution and inventory on the shelves. Demand forecasting is higher than the actual level of demand will bring enterprise backlog of inventory. The phenomenon is the "bullwhip effect". Due to the existence of the bullwhip effect, retail chains variation of demand forecasting errors in amplifier, thereby increasing its upstream manufacturers and suppliers of the production, supply, inventory management, and marketing of instability. High inventory not only reduce the cash flow, increase the operating costs, will slow market reaction speed, increase due to the product expired, the damage caused by the loss. Once an enterprise in the supply chain to improve the accuracy of the forecast, and a series of stable business plan, it can start smoothly carry out sales, production, distribution, or other operations, such as inventory, shipping, transportation, reverse logistics, service and other business, and improve efficiency. 3.1 Reducing the service level Demand forecasting deviating from the market in improving part of the inventory, it at the same time can bring other goods out of stock. In 2003, the China association of chain management in collaboration with Roland Berger consultant’s rate of Chinese goods out of stock, the survey found domestic retailers of goods shortage rate at about 10%. Whenever some goods out of stock, stores of other merchandise to tally staff would be displayed in the position of shortage of goods, caused the appearance of store shortage rate is low, so blinded by retail enterprise headquarters. Over the long term, the best-selling products on the shelves will be less and less, unsalable goods will be filled with, even if this kind of goods after the arrival of the goods, cargo handling personnel may also think display goods shelves have been selling goods in stock for a long time. Stakeout rate is one of the indicators measuring chain retail enterprise service level, the shortage rate is higher, the lower the service level. According to statistics, if all stores can guarantee the best goods in the frame rate, so every store increased average annual sales of up to 6.4 million Yuan. 3.2 Loss of customers’ loyalty Demand forecast deviation to retailers can't provide timely and effective services according to customer requirements, leading to a loss of customers. For customers
many times to visit the stores found that no can choose goods, can transfer shoppingplace, this will lead to loss of traffic slowly like a best-selling goods stores, presentobvious decline in sales.According to the survey, when out of stock, 37% of shopperswould choose toleavethe store (among them,6%of shoppers would immediatelyleave, go to another purchase, 31% of shoppers will go to another to buy this product,but to continue in the store to buy other commodities, it can cause damage to the store,create the sales opportunity for other competitors; 48% of shoppers will buy withaltermative category, which is the loss of the manufacturer, And 15% of shoppers willgive up to buy the goods, stores and manufacturers are losses.4. Methods and steps to improve the demand forecast accuracy4.settinguptheforecastingmodelChain retail enterprises need to consider the different category, different dimensionsand different levels havedifferent demandforecastingmodel.For example:incommodity level, according to the category, type of commodity, series, color or sizeto determine prediction unit?In channel level, a franchise or business should beconsidered? In the aspect of geographical location, is considered the national orregional or city? In different levels to establish different demand forecasting modelcan improve the accuracy of demand forecasting. Even at the same time analysis theinfluencing factors of demand forecasting, historical average, seasonal demand factorsof demand forecasts, sales trend forecast, promotion factor prediction, etc., of courseshould alsoanalyzethe influenceof otherfactors,andmay extend tootherfactors4.2CreatingthefundamentalforecastingAccording to the demand forecast model and the categories of features, choosing theproper demand forecasting method, a preliminary forecast the market demand ofdifferent goods in different regions or stores. For those selling time is long andrelatively stable product sales, quantitative prediction technology can be used toanalyze the sales history, thus confirming its development trend and future demand4.3 Management the powerful factorsDue to many market factors (such as seasonal factors,promotion factors,certainevents.etc.)havebigger influenceonthepredictedresults.suchas:food,clothingandother goods sales promotion sale, seasonal merchandise seasonal rigid demand growth,some events demand for related products, etc.,which requires the enterprise whenpredicting must adjust based prediction, based prediction on the basis of thepromotion information, season, cycle, competitive information, devouring effect, etc.4.4ConstantlynegotiateandreachaconsensusoneffectiveNo matter use what method to get the prediction results, and the best across all levelsof the supply chain business partners work closely together to improve the quality ofprediction(for example:by intelligent tradingplatformITE's or cooperative systembetween suppliersand retailers),between enterprisesthrough advanced InternetandWebtechnologyexchangeand sharing of business information,thephaseclosetotheprediction model and the method for prediction of constantly communicate theirresults, and on this basis, make more accurate prediction, the demand and supplyAccordingtotheconsensusforecastofthedemand,asaresult,reachtheformation ofa consistent demand plan. Therefore, retail enterprises need a favorable supply
many times to visit the stores found that no can choose goods, can transfer shopping place, this will lead to loss of traffic slowly like a best-selling goods stores, present obvious decline in sales. According to the survey, when out of stock, 37% of shoppers would choose to leave the store (among them, 6% of shoppers would immediately leave, go to another purchase, 31% of shoppers will go to another to buy this product, but to continue in the store to buy other commodities, it can cause damage to the store, create the sales opportunity for other competitors; 48% of shoppers will buy with alternative category, which is the loss of the manufacturer; And 15% of shoppers will give up to buy the goods, stores and manufacturers are losses. 4. Methods and steps to improve the demand forecast accuracy 4.1 setting up the forecasting model Chain retail enterprises need to consider the different category, different dimensions and different levels have different demand forecasting model. For example: in commodity level, according to the category, type of commodity, series, color or size to determine prediction unit? In channel level, a franchise or business should be considered? In the aspect of geographical location, is considered the national or regional or city? In different levels to establish different demand forecasting model can improve the accuracy of demand forecasting. Even at the same time analysis the influencing factors of demand forecasting, historical average, seasonal demand factors of demand forecasts, sales trend forecast, promotion factor prediction, etc., of course should also analyze the influence of other factors, and may extend to other factors. 4.2 Creating the fundamental forecasting According to the demand forecast model and the categories of features, choosing the proper demand forecasting method, a preliminary forecast the market demand of different goods in different regions or stores. For those selling time is long and relatively stable product sales, quantitative prediction technology can be used to analyze the sales history, thus confirming its development trend and future demand. 4.3 Management the powerful factors Due to many market factors (such as seasonal factors, promotion factors, certain events, etc.) have bigger influence on the predicted results, such as: food, clothing and other goods sales promotion sale, seasonal merchandise seasonal rigid demand growth, some events demand for related products, etc., which requires the enterprise when predicting must adjust based prediction, based prediction on the basis of the promotion information, season, cycle, competitive information, devouring effect, etc. 4.4 Constantly negotiate and reach a consensus on effective No matter use what method to get the prediction results, and the best across all levels of the supply chain business partners work closely together to improve the quality of prediction (for example: by intelligent trading platform ITE’s or cooperative system between suppliers and retailers), between enterprises through advanced Internet and Web technology exchange and sharing of business information, the phase close to the prediction model and the method for prediction of constantly communicate their results, and on this basis, make more accurate prediction, the demand and supply. According to the consensus forecast of the demand, as a result, reach the formation of a consistent demand plan. Therefore, retail enterprises need a favorable supply
agreement, and supplier over by retailers and suppliers' evaluation and collaboration,bothtoreducethe intermediatelinks,maximizetheprocess efficiency.Atthesametime, it will also bring to retail enterprises with the lowest cost of goods.4.5PerformancereviewDueto thevolatility of the market,and also rapidly changing demand, in the processof execution plan, the need for some unusual movements or on the basis of predictingthe sharp change of manage and adjust in a timely manner, and constantly review andcheck the execution according to the circumstance of execution effect, graduallyachieve optimization in continuous feedback, and constantly revised and provideaccurate data for future business and optimized.5. Case--*- market research of “Run Yan""Run Yan" is a P & G's original brand of shampoo, only for the Chinese market, theonly series of products using Chinese native plant resources in P&G. Once upon atime, “Run Yan" by P&G, think of it as a new growth points, Once upon a time,countless industry,outside of its advertising and image,Once upon a time wethoughtagain black hairfluttering in the spring, but in2002 it has been halted and than exitingthe market, what's the matter? In the outside world seems to be a "sand" questionnaire,P&G people can see the"gold": real investigators faith is respondents casual - alwayshope their "has a black head of hair, a pair of watery big eyes" - isn't that what themodel of the traditional Oriental beauty?By listing a lot of market research work before, P & G's "let your hair more black andbright,innerbeautydoreleaseRunYans shampoo wasbornThere are many market researching works P&G doing before “Run Yan"existed inthe market.5.1"Worm" researching - zero distance observing the consumersA known as the"personal plan"of commercial market research quietly rolled outIncluding then embellish changqing Huang, “Run Yan" 's brand manager, a dozenpeople separately to Beijing, Dalian, Hangzhou, Shanghai, Guangzhou and otherplaces to choose eligible target consumers, and they have lived for 48 hours, "worm"investigation. From respondents in pajamas morning sleep dimly go to the bathroombegan to wash a face to brush their hair, wash hair makeup for the night, ladies lifedaily life, food, cosmetic, wash hair care habits panoramic view. Changqing Huangeven carefulponders respondents'characterand inner world.InthesurveyP&Gfound that consumers thought moist and vitality ofthe black hairis the most beautiful.P&G also through secondary data, a survey found that science has shown thefollowing:Put a hair under a microscope, you will find that the hair is made up of many smallskin, these are called cuticulapili material directly affect the appearance of the hair.The cuticulapili of the healthy hair neatly,and damaged hair, hair is tilted or brokenskin, hair look yellow and dark.And nourishing ingredients can make the cuticulapiliof embellish hair dew formation, and form a layer of protective film on the hair.effectively prevent the loss of moisture, complement hair moisture and nutrient, makehair smooth, shiny,smooth and more moist.At the sametime,still cangreatly reducethe fracture of the hair and embellish hair dew friction, make your hair meek
agreement, and supplier over by retailers and suppliers’ evaluation and collaboration, both to reduce the intermediate links, maximize the process efficiency. At the same time, it will also bring to retail enterprises with the lowest cost of goods. 4.5 Performance review Due to the volatility of the market, and also rapidly changing demand, in the process of execution plan, the need for some unusual movements or on the basis of predicting the sharp change of manage and adjust in a timely manner, and constantly review and check the execution according to the circumstance of execution effect, gradually achieve optimization in continuous feedback, and constantly revised and provide accurate data for future business and optimized. 5. Case- market research of “Run Yan" “Run Yan" is a P & G's original brand of shampoo, only for the Chinese market, the only series of products using Chinese native plant resources in P&G. Once upon a time, “Run Yan" by P&G, think of it as a new growth points; Once upon a time, countless industry, outside of its advertising and image; Once upon a time we thought again black hair fluttering in the spring, but in 2002 it has been halted and than exiting the market, what's the matter? In the outside world seems to be a "sand" questionnaire, P&G people can see the "gold”: real investigators faith is respondents casual - always hope their "has a black head of hair, a pair of watery big eyes" - isn't that what the model of the traditional Oriental beauty? By listing a lot of market research work before, P & G's "let your hair more black and bright, inner beauty do release “Run Yan” ’s shampoo was born. There are many market researching works P&G doing before “Run Yan” existed in the market. 5.1"Worm" researching - zero distance observing the consumers A known as the "personal plan" of commercial market research quietly rolled out. Including then embellish changqing Huang, “Run Yan” ‘s brand manager, a dozen people separately to Beijing, Dalian, Hangzhou, Shanghai, Guangzhou and other places to choose eligible target consumers, and they have lived for 48 hours, "worm" investigation. From respondents in pajamas morning sleep dimly go to the bathroom, began to wash a face to brush their hair, wash hair makeup for the night, ladies life daily life, food, cosmetic, wash hair care habits panoramic view. Changqing Huang even careful ponders respondents’ character and inner world. In the survey, P&G found that consumers thought moist and vitality of the black hair is the most beautiful. P&G also through secondary data, a survey found that science has shown the following: Put a hair under a microscope, you will find that the hair is made up of many small skin, these are called cuticulapili material directly affect the appearance of the hair. The cuticulapili of the healthy hair neatly, and damaged hair, hair is tilted or broken skin, hair look yellow and dark. And nourishing ingredients can make the cuticulapili of embellish hair dew formation, and form a layer of protective film on the hair, effectively prevent the loss of moisture, complement hair moisture and nutrient, make hair smooth, shiny, smooth and more moist. At the same time, still can greatly reduce the fracture of the hair and embellish hair dew friction, make your hair meek