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West Marine utilized technology to improve the demand forecasting process. The company is one of the early implementers of "multi-echelon" replenishment process. The multi-echelon process facilitates integration of demand from the retailers to that of suppliers through utilization of information technology tools.
Data such as seasonal forecasts, promotion stock levels, and future assortment changes are automatically calculated so that the retailer gets a reliable projection of its future orders and so that suppliers can continually deliver accurate, on-time orders. The order forecast is in the form of machine-readable data that can be entered into a supplier's materials requirement planning (MRP) or enterprise resource planning (ERP) system to represent a key customer's demand. This enabled to minimize the effect of inventory build up in the system due to creditability of forecasting process achieved due to creation of trust among the channel partners.

This led to West Marine improving the forecast accuracy and on time shipment above 80.0% and in stock rates over 96.0% in every store every week even during peak season.

The case study clearly illustrates the fact that the organization in order to achieve the objective of promotion such as uptick in sales, profits and minimize the forecasting error had to improve the organizational design system resulting in improving the information sharing process among departments. Furthermore, organizations had to create trust among channel partners to utilize technology as an enabler to improve forecast accuracy.

Concluded.

* Contributed by: -
Uppili. R,
Alumnus of Great Lakes Institute of Management & M.A. (Economics) from Madras University,
Currently working as Research Analyst at Vistasoft India Private Limited.