Syktyvkar Tissue Group (STG JSC) is a leading Russian manufacturer of paper tissue and substrate products. In 2019, STG began implementing a sales and operations planning process, S&OP. The new approach initiated a transformation of the company's entire supply chain and manufacturing processes. “STG was looking for a vendor to implement an integrated planning system for sales, inventory management and manufacturing. It was strong advisory skills and years of industry expertise that made the company’s choice in favor of GoodsForecast. GoodsForecast.
The main objective of integrated planning is profit maximization. GoodsForecast's demand forecasting and sales planning system was the first module of its integrated enterprise business planning suite.
GoodsForecast’s professionals set up mathematical models that enabled forecasting demand and sales with due consideration of previous periods, trends, seasonality, information on distributors' warehouses and delivery addresses. SKUs and packaging were also taken into account in the calculations. The system enables to build a monthly rolling plan for the next year and a half.
The project lasted about a year. After drafting and coordinating terms of reference, the following work was completed: data collection and preparation, model development and customization, system deployment and pilot run.
Before the stage involving data analysis and setting up mathematical models, GoodsForecast’s and STG’s professionals agreed on the most important indicators of forecast accuracy for the business. Several dozens of experiments were conducted based on a large volume of data: more than 500 product lines, more than 2,200 customers, etc. As a result of the experiments, 7 different models were selected to reflect changes in STG’s key product and brand groups over time. The selected models performed best using the previously agreed upon accuracy metrics.
In the spring of 2022, the forecasting system was put into commercial operation.
The implementation of the GoodsForecast demand forecasting and sales planning system improved STG’s accuracy of long-term, medium-term and operational sales planning by 20%.
Today, STG’s professionals can more accurately assess ultimate demand for their products and, when making production plans, focus on actual consumption, not only on the history of orders received from retail chains and distribution centers.
GoodsForecast and Syktyvkar Tissue Group completed the first implementation stage of the integrated business planning platform, demand forecasting and sales planning forecast. Next, three more units will be implemented to automate supply chain management and inventory management operations at distributors' warehouses and output planning.
The implementation of GoodsForecast’s demand forecasting and sales planning system has a favorable impact on the achievement of STG’s main goal and upgrading of S&OP processes in the company, i.e., maximization of EBITDA and acceleration of product, raw and basic materials and inventory turnover.
More accurate demand forecasting, finished goods inventory management and utilization balancing will help STG become a market leader and secure a stronger competitive position.
«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».
Pavel Pimenov, Head of Analytical Service, Syktyvkar Tissue Group