Previously, the European business was forecasted separately by each country, but the Western-European management decided it needed the same process everywhere to maximise benefits from the global Hanes Supply Chain. It also wanted better reporting structures in place and software to measure performance (KPI’s). Hanes opted to rollout FuturMaster’s demand forecasting software in Western Europe for driving sales and projections.
Nonetheless, the new technology would allow each country a degree of flexibility and the ability to come up with fine-tuned, localised ranges wherever deemed more profitable. This would mean that regular, top-up purchases like men’s briefs or t-shirts would be fed primarily through its global reserve stock using centralised planners, while local planners would work on the development of more seasonal or promotionally-led products specific to Europe.
“There are two ways of producing within the global Hanes Supply Chain: you can either ‘make to stock’, with target levels of stock held in distribution centres and pushed out to the market; or ‘make to order’, for producing single units before shipment out,” explained C. Pecriaux. “We decided that a combination of the two would work best for us in Europe.”
Both central and local planners have dedicated screens targeted to the needs of each individual, or country, simplifying the process. He said that monthly meetings and regular communication is vital to help them compare forecasts and work on the best combination of forecasts.
“Sales in textiles are largely driven by trends, so it’s really important to work closely with local experts to make the right selection.”
For largely seasonal, localised products, clearly a ‘make to stock’ approach is not wise, in case some particular styles or colours don’t work.
Hanes has seen an increase in forecast accuracy of up to ten percent, depending on the category of products and learning curves, country by country. What’s more, fewer people are having to grapple with using a variety of different systems across the globe and no longer wasting so much time on forecasting. Manual data errors and out-of-stocks have also been reduced.
“Long lead times of up to six or seven months for products coming from Asia means having to be able to forecast a long time ahead with pin-point accuracy,” said Pecriaux.
Using the same reporting and KPI measures in Western Europe has standardised procedures and made everyone work towards the same goals much more efficiently, he added.
“We have expanded our brand portfolio, diversified our business internationally and across channels, and increased the leverage of our powerful global supply chain to deliver more consistent organic growth and higher cash-flow generation,” said Hanes’ CEO Gerald W. Evans Jr. in a recent statement.
The company now has easy-to-use tools to make projections and see, for example, what stock is likely to be left at the end of a six-month season. It can also gauge whether to increase or decrease production every few months, based on looking at sales patterns over a year or two-year horizon.
“Millions of data points are fed into our program and, over time, it learns patterns and behaviours that can identify a supply chain issue before it happens – right down to the SKU level,” said Ben Martin, HanesBrands chief advanced analytics and global planning officer. “This can help fix any problems before they occur and ensure we have the right products when and where our customers want them.
“If we see a particular colour taking off in retail, meaning consumers are buying it at a much higher rate than what was planned, the algorithm will recognise that and suggest a shift in production. The system is sifting through millions and millions of data points – something a human could never process in the required time frame – and drawing connections across the chain to identify potential issues.”