Syktyvkar Tissue Group realigns its production processes with GoodsForecast

By more accurately forecasting demand, managing finished goods inventory and balancing output, the company will be able to strengthen its market position and increase customer loyalty.

Moscow, October 6, 2022. Syktyvkar Tissue Group (STG) has completed the implementation of the GoodsForecast system for demand forecasting and sales planning, which will be the first module of a set of solutions for integrated business planning at the enterprise. Thanks to the implementation of the system, CTG can more accurately assess ultimate demand for its products and, when making production plans, focus on actual consumption, not only on the history of orders received from retail chains and distribution centers.

The mathematical models underlying the system allow forecasting demand and sales volume taking into account past periods, trends, seasonality, information on distributors' warehouses and delivery addresses. SKUs and package volumes are taken into account in the calculations. The planning horizon is 18 months, so the system allows STG to build a rolling plan for the next year and a half on a monthly basis.

It took about a year to implement the project. During that time, the terms of reference were prepared and approved, the system was deployed, models were developed and customized, data were collected and prepared and the pilot run was completed. As a result, the forecasting system was put into commercial operation last spring. The preparation of data for analysis was the main challenge and the most time-consuming stage of the implementation process.

Before analyzing the data and tuning the mathematical models, key and most business-critical forecast accuracy metrics were captured and agreed upon with CTG. In the course of customization, several dozens of experiments that were complicated by a large amount of data – more than 500 product lines, more than 2,200 customers, etc. – were conducted. Based on the results of those experiments, seven different models were selected to reflect changes in CTG’s key product and brand groups over time. The selected models performed best using the previously agreed upon accuracy metrics.

Next, three more units will be implemented to automate supply chain and distribution warehouse inventory management and output planning processes.
Pavel Pimenov, Leading Demand Forecasting Analyst, Syktyvkar Tissue Group OJSC, said: “The implementation of the new system marks the start of an impressive pool of work and changes that will ultimately help more accurately generate output plans that take into account a multitude of factors. This will not only allow us to better meet the needs of our customers but will also make a favorable contribution to the environment through better utilization of production resources.”

“We started cooperating with Syktyvkar Tissue Group back in 2020 when we implemented a small consulting project at their facility. Based on the results of the audit, we issued our recommendations and the management of the company found them practical and workable and decided also to implement a project on introducing tools. For us, this is an indicator of customer confidence and the right vector for our own development when we are able to reengineer business processes and support them with technological solutions within a single work plan,” Sergey Kotik, Development Director of GoodsForecast, commented.

About Syktyvkar Tissue Group
Syktyvkar Tissue Group (STG), Open Joint Stock Company, is an industrial enterprise specializing in manufacturing tissue products such as commodity paper substrate, products under its own brand Veiro (household products) and Veiro Professional (out-of-home products) as well as private label products for retailers. The company was established in 2005.
Today, Syktyvkar Tissue Group runs two production sites in Syktyvkar (Komi Republic) and in Semibratovo settlement (Rostov district, Yaroslavl region).
Syktyvkar Tissue Group's key priorities include saving energy, reducing waste and protecting water and forest resources.
CTG is continuously increasing the percentage of recycled materials (waste paper) used in its production operations. Recycling paper that has lost its consumer properties allows reducing the amount of waste going to landfills by more than 40,000 m3 annually.

About GoodsForecastGoodsForecast, a Russian vendor of innovative systems based on machine learning and AI, is part of Forexis Group founded by a team of mathematicians of Lomonosov Moscow State University and the Computing Center of the Russian Academy of Sciences. The company ranked among Top 3 in the world by forecasting accuracy at M5 Forecasting Competition and won Russian and international competitions on multiple occasions. Its customers include major Russian companies operating in the FMCG, retail and industrial sectors (Cherkizovo Group, Technonikol Corporation, Rusagro Group, international KNAUF Group, Pulse pharmaceutical company, O'KEY Group, Perekryostok and Verny supermarket chains, M.Video-Eldorado electronic stores and other major manufacturing and trading companies). GoodsForecast is a grantee of the Innovation Assistance Foundation and RFRIT. Skolkovo resident since 2013.