Cleaning Up Demand Forecasting

Rapid growth causes KIK Corp. to seek out solution for sales forecast accuracy

St. Louis  November 25, 2002  For North America's largest private-label liquid cleaner manufacturer KIK Corp., rapid growth drove the company to rethink its demand forecasting strategy. Implementing a corporate-wide forecasting system to replace a manual system, the company turned to Demand Solutions Forecast Management (DS FM) and Demand Solutions Requirements Planning (DS RP) to integrate factories with actual demand.

In a five-year period KIK's employee base grew ten-fold while its number of factories jumped from one to 12. During the same period the company introduced more than 1,500 products and became the single-source provider of private-label bleach to many large North American retailers. Faced with rapid growth, KIK needed to achieve greater accuracy in its sales forecasts.

"Our existing forecasting system wasn't automated and sophisticated enough to generate timely, accurate forecasts. We tended to run high on inventories in order to ensure continuous and timely supply to our customers," said David Cynamon, chairman and CEO of KIK. "We chose Demand Solutions because it is suited to the size of our business and can grow as we grow. Its ability to improve, automate and shorten our forecasting cycle helps us meet our inventory and sales objectives while enabling us to continue to serve our customers effectively and efficiently."

KIK has been running DS FM in a test bed for several months and plans to go live with the new corporate forecasting system this month. Later this year the company plans to roll out DS RP to each of its factories for assessing requirements, as well as Demand Solutions Rough Cut (DS RC), a tool for modeling demand fulfillment.

"Demand Solutions is flexible enough to adapt to our growing business and the way we operate," said KIK's Vice President, Logistics Tony Di Bias. "Demand Solutions enabled us to drill down to a customer's individual order item, greatly improving the quality of our forecasts. We've also been able to cut our forecast processing time from days to just 30 minutes."

Di Biase said DS FM offers additional flexibility because unlike more complex, expensive systems, DS FM does not force a formula but selects the formula that best addresses each item's demand pattern. The software integrated with KIK's existing enterprise resource planning system and did not require additional infrastructure outlays.