Context:

Simoniz is a company dedicated to understanding the needs of its consumers, who are passionate about the world of cars and motorcycles. For more than 30 years, it has positioned itself as a leading company in the automotive sector for vehicle care, beautification and protection, through products developed and tested with high quality standards. Simoniz is currently present in more than 5 countries in the region with expanding production and marketing capacities to meet the needs of its customers. It has a portfolio of more than 5000 products and annual sales of more than 25 million dollars.

With more than 2.2 million units sold monthly across its different product categories and distribution channels, demand planning, production and inventory management become key processes in your supply chain. In order to meet the service levels required by customers, while keeping inventory levels to a minimum.

The main objective is to achieve a sustainable balance sheet, where product availability is guaranteed without incurring excessive inventories that exponentially increase operating expenses and storage costs

Expectations & Benefits

High levels of service demonstrate adequate inventory management, preventing bankruptcies due to stock or product unavailability, which translates into increased sales revenues. In turn, low inventory levels free up working capital, captured by low-turnover, obsolete products, or overproduction leading to oversupply.

In order to achieve operational excellence in the supply chain, Simoniz integrated its Siesa ERP with Datup's Optimized Demand Planning and Inventory SaaS solution, powered by artificial intelligence (AI). The benefits were:

• Increase sales revenue up to 4 times, thanks to increased service levels on portfolio products with the highest revenue and turnover.
• Decrease volume due to excess inventory up to 3 times, by reducing inventory levels related to oversupply.
• Generate hourly and weekly demand forecasts for 5000+ active items with accuracies greater than 85%.
• Integrate in a matter of weeks: sales histories, demand, promotions, commercial forecasts, sold out, inventories and master tables without investing in servers or specialized personnel.

Increasing Service Levels, Reducing Losses

Figure 1. Inventory loss (stockouts) projected based on Simoniz sales budgets versus Datup's demand forecasts for 2020-Q3, 2020-Q4, 2021-Q1 and 2021-Q2.

Rising Service Levels: The First Front of Efficiencies

We face the challenge of increasing service levels while preventing inventory shortages and bankruptcies. We recognized that product availability directly impacts sales and revenues across all our service channels.

Demand Planning Solution

We implemented Datup's Demand Planning solution, which identified the most critical products using an ABC-FSN-XYZ analysis. We focus on references classified as AF, which represent the highest revenue share and turnover based on demand history.

Accuracy in Forecasts

We prioritize accuracy in forecasting high-value products. Each percentage point of improvement means hundreds or thousands of additional units in our production plan, ensuring availability and, therefore, service levels and revenues.

Outstanding result: We achieved WMAPE errors between 1%-18% for all high-value references with Datup forecasts.

Thanks to this accuracy, we consistently exceed the 90% threshold in our service levels, based on reliable demand forecasts rather than uncertain business budgets or manual adjustments.

Quantification of Benefits

We estimate potential out-of-stock losses by comparing real demand with forecasts for four quarters (2020-Q3 to 2021-Q2):

• Previous process: Potential losses of 11.120 million
• With Datup: Reduction to 4.6 billion in losses

Significant improvement: We increased sales revenues by 250%, ensuring better product availability thanks to automated and intelligent demand planning.

Efficiency Projection:

For future projects, we offer an ROI calculator that estimates potential savings. Efficiencies in availability and inventory management can reach up to 6 billion, demonstrating the enormous potential for optimization in the supply chain.

Lowering Inventory Levels, Reducing Operating Costs

Figure 2. Excess inventory due to overstocks projected based on Simoniz sales budgets versus Datup's demand forecasts for 2020-Q3, 2020-Q4, 2021-Q1 and 2021-Q2.

A second efficiency front derived from demand planning with Datup focused on reducing operating expenses and storage costs due to excess inventory. In addition, to the increase in service levels and revenues, demand planning with Datup guided the reduction of inventory levels that seek to commit less working capital in the short term.

In general, demand planning efforts often overestimate the volumes to be produced, in order to prevent losses due to inventory failures. While this practice ensures product availability for most demand scenarios, it also generates significant oversupplies due to sales expectations with partial compliance. Cost overruns related to increased inventory levels then become a problem with continuous and sustained growth over time.

The demand planning supported by Datup also offers a response to this scenario of oversupply. Based on the classification of high-value products and demand forecasts for the solution, the resulting excess inventory was compared to historical demand for the quarters 2020-Q3, 2020-Q4, 2021-Q1 and 2021-Q2. The same comparison was made taking the resulting excesses based on Simoniz's sales budgets. The oversupply volume for Simoniz accumulated 16.6 million units. For its part, Datup totaled 11 million units, which represents an efficiency equivalent to 160% in inventory levels.

It is possible to translate this efficiency into savings by crossing all the expenses and costs associated with storage and maintenance by reference with the help of the Datup ROI calculator Calculate estimated ROI when implementing DATUP in your business. Savings from inventory management, purchasing, supplier management, personnel and physical infrastructure reach 300 million a year.

Finally, it is worth highlighting the behavior of the 2021-Q1 quarter, being the only period where Datup forecasts generated 60% more excess inventory (Figure 2). However, for this same period, the Datup solution estimated 400% lower losses due to inventory failures (Figure 1). The highest of all the periods analyzed. This demonstrates how artificial intelligence autonomously maximizes benefits in one scenario, in response to lower returns in others; which is a constant challenge in supply chains.

Operational Efficiency

Datup's Optimized Demand Planning and Inventory solution provides its customers with the advantages of software as a service, artificial intelligence and automation. For Simoniz, it means having a 7×24 solution available, with levels of precision and insights beyond the reach of traditional solutions, and response times in minutes.

Simoniz demand planning involves forecasting more than 5800 individual references and more than 1200 promotional combos, considering for each one short, medium and long-term forecasts in 5 demand scenarios: base, rise and moderate fall, and extreme rise and fall. The process is executed automatically and autonomously for 6 hours each week, in order to support demand and production planning with decisions supported by data evidence and the effectiveness of artificial intelligence.

Ready-To-Go Data

At the start of the journey with Datup's Demand and Inventory Planning solution, Simoniz has achieved additional benefits in the continuous improvement of its supply chain:

• Reduce the operational burden on work equipment: The solution has allowed the demand and production planning team to reduce operational tasks that occupied around 80 hours per month (50% of their working day) to 2 hours per month. The time saved is now invested in more strategic tasks, taking advantage of opportunities and better preparing for the challenges involved in business growth.
• Improve transparency and visibility: Through control boards or dashboards provided by Datup, they have unified information from their own systems, customers and suppliers, facilitating the monitoring and monitoring of the planning of more than 6000 references and promotional kits, warning of important changes with respect to business value.
• Purge the product portfolio: Based on ABC-FSN-XYZ analyses, strategies were generated to evaluate revenue share versus maintenance costs for each product reference. Thus, attention was focused on references of high value for the business and on those candidates for a debugging or deregistration process. This type of analysis is carried out periodically, based only on the results delivered by the Datup solution, instead of diverting multiple resources into its preparation and generation.

Quick-wins

At the start of the journey with Datup's Demand and Inventory Planning solution, Simoniz has achieved additional benefits in the continuous improvement of its supply chain:

• Reduce the operational burden on work equipment: The solution has allowed the demand and production planning team to reduce operational tasks that occupied around 80 hours per month (50% of their working day) to 2 hours per month. The time saved is now invested in more strategic tasks, taking advantage of opportunities and better preparing for the challenges involved in business growth.
• Improve transparency and visibility: Through control boards or dashboards provided by Datup, they have unified information from their own systems, customers and suppliers, facilitating the monitoring and monitoring of the planning of more than 6000 references and promotional kits, warning of important changes with respect to business value.
• Purge the product portfolio: Based on ABC-FSN-XYZ analyses, strategies were generated to evaluate revenue share versus maintenance costs for each product reference. Thus, attention was focused on references of high value for the business and on those candidates for a debugging or deregistration process. This type of analysis is carried out periodically, based only on the results delivered by the Datup solution, instead of diverting multiple resources into its preparation and generation.

‍