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Thule increases customer service levels & reduces inventory with Optilon and SO99+

Thule has made several important changes in the last year going from a decentralized set-up based on demand planning to a more centralized process. Their positive results have been significant.

About the solution

Prior to using SO99+, Thule’s forecasting process had been based first on Excel, later on a decentralized demand planning. To obtain better forecasts the process was centralized but this brought to much manual work and a lack of connection between service and inventory. The solution to these problems have been implementing ServiceOptimizer99+ (SO99+) from ToolsGroup as well as a new process implemented by Optilon. The new solution covers Thule’s biggest product segment Outdoor.

The Outdoor segment has a global customer base consisting primarily of distributors in Car and Sports, a significant portion of sales goes to OES customers in the automotive industry. There are six factories in Europe, one central warehouse, five regional distribution centers and more than 4000 finished goods. Two of the major challenges ara a distinct summer season and uneven demands.

The project has brought a common, more efficient and accurate demand planning process within the Outdoor segment. The new solution with SO99+ means forecasts and safety stock levels in the ERP are automatically updated every week based on optimizations in SO99+. Thule’s old safety stock routine was based on a defined seasonal dependent coverage rate (setting number of days’ average demand). SO99+ instead starts from an aggregated service level target; the optimizer defines service levels for each SKU to reach the aggregated service level target using an objective function. The optimization in SO99+ leads to distinct deviation in service and coverage within a service level group to maximize the overall use of the capital.

About Thule

Thule is a premium brand used globally for a wide assortment of products with a focus on solving the problem of how to bring equipment with you when using a car (roof racks, bike and water sport carriers, roof boxes). The company was founded in Sweden in 1942 and now operates in 17 countries. Annual turnover is 5.7 Billion SEK and the number of Emplyees is 3,100. Thule is divided into 4 product segments; Outdoor, Towing, bags and New ventures.

About Optilon

Optilon creates business advantage through solutions based on leading supply chain applications. Optilon takes a holistic approach to planning and optimization for companies within both manufacturing and trade, implementing market leading solutions and processes. Optilon uses its expertise to choose among the leading and most innovative applications on the market. Service Optimization and Demand Planning is a focus area where Optilon has choosen to work with ToolsGroup.

About ToolsGroup and SO99+

ToolsGroup is the company for demand-driven supply chain planning. Its software SO99+ analyzes demand history to obtain the best possible forecasts. ToolsGroup’s solutions span key supply chain planning areas such as Demand Planning, S&OP, Demand Sensing, Promotion Forecasting and Inventory Optimization and Replenishment. Its “Powerfully Simple” philosophy means that its software supports highly intelligent decision-making, and yet at the same time is easy to use.

A few words with Thule

What would you say is Unique about ServiceOptimizer99+?

Traditional demand planning considers demand history in terms of quantity only, ignoring customer order lines. SO99+ on the other hand analyzes the demand history both in terms of quantity and customer order lines, in order to better model the shape of the demand. The close connection between desired service level and inventory level is also very positive.

What results have you seen so far?

We've managed to centralize and automate our forecasting process. We've also reduced average inventory for the Outdoor segment by 15MSEK and increased the service level to customers by 20% (measured from project pre-study).