Interview: Why it’s good to have PREWIT, not just for Christmas
The food business was used to the share of goods sold in graduations being between 60 and 70 percent (in 2004 it was approximately 25 percent). However, with rising prices, end customers are focusing much more on promotional goods – their share has climbed to 80 percent. Manufacturers are under pressure – they have to know as precisely as possible how much and which goods they should produce (not only for discount events). And take into account numerous factors, such as product durability, delivery dates, and market fluctuations. “They don’t only have a problem during the Christmas peak. But if they prepare well, they can produce efficiently throughout the year, including the most demanding months of the year,” say DYNAMIC FUTURE company representatives Petr Jalůvka and Jan Šlajer in an interview.
There is less than a month until Christmas, and another sales frenzy is in sight – Easter. How do you think companies manage these challenging times?
Jan Šlajer: With DYNAMIC FUTURE optics, in some cases it’s not great. These periods place the greatest demands on producers of goods with a short shelf life, typically producers of dairy, meat, and similar products. It’s extremely important for them to be able to comprehensively predict demand, and to be able to prepare for what they have to produce, in what volume, and when. But it’s necessary to add that planning is not just a seasonal matter.
Will your demand forecasting tool handle this for them?
Petr Jalůvka: PREWIT (PREdiction WIzard Tool), developed by the DYNAMIC FUTURE team, has no ambition to make decisions for people. But it will provide them with the basis for their decisions to be based on, and they can make them correctly. Because we believe that the human brain is an amazing computer that is able to do many things far more efficiently than an application. And when we connect it with a smart application, the result must be perfect.
Let’s be more specific. What is PREWIT for?
Jan Šlajer: It’s a very good application, capable of predicting the daily demand for promotional and non-promotional goods within the food industry. Thanks to this, our customers are able to prepare their production in such a way as to cover the demands of their customers, to produce neither less nor more than their customer will sell. So they have to work, for example, with the mentioned graduations, but also durability or branded products. If they make more than the customer buys, they can’t sell it to anyone else. In short, their predictions must be as accurate as possible.
Petr Jalůvka: For goods with a short shelf life, it’s always a problem to determine in advance exactly what the customer will buy, and in what quantity. For example, yogurts can have a shelf life of twenty-one days; the customer needs to have them on the shelves at least seventeen days before expiration. Delivery days, in which the goods travel from the manufacturer to the seller, also play a role.
What input data does PREWIT work with?
Petr Jalůvka: Like all predictive tools, it’s based on historical data. The application is built on top of the MS SQL database, and the user interface is accessible using a web browser. The graphic output gives the possibility to work with filters and perform correction of predicted values. The plan is then created taking into account the stock status of individual items in the warehouse, ordered quantity, reserved quantity, goods on the way, and is rounded up to whole packages.
Jan Šlajer: In many companies, a whole team of people is dedicated to such relatively complex calculation operations, which calculates the production plans manually, or with the support of Excel. When they use PREWIT, they simplify the whole process, and can focus on strategic production management.
How does PREWIT help during production peaks?
Jan Šlajer: Even though we are talking about the pre-Christmas peak, companies have problems with production planning all year round. Now they are “only”” several times larger. If you have goods with a short shelf life, if you don’t sell them within, let’s say, five to ten days, the market no longer wants to buy them. Additionally, as people focus more and more on sale items, the demands on knowing how much to produce are increasing. If you make a lot and don’t sell, you have a problem. If you produce too little and don’t meet the demand, you also have a problem.
Which businesses use PREWIT?
Jan Šlajer: PREWIT is successfully used by MP Krásno, OLMA, Steinex, and we are launching it in Madeta.
Petr Jalůvka: It’s important to say that it serves not only production planners, but is also a perfect tool for salespeople. They should also have information on production and shipping on a daily basis, so that they can continuously solve their requirements with customers, and communicate any adjustments with production.
What makes this tool unique?
Jan Šlajer: A major competitive advantage of DYNAMIC FUTURE is that we are able to explain to the customer how our SW works. A lot of competing tools have a huge number of algorithms, and that’s not our way.
Petr Jalůvka: Yes, PREWIT delivers data that people trust.
Jan Šlajer: In addition, if we develop a new module for one customer, we will of course offer it to other clients as well. We are constantly developing PREWIT, adding new functionalities.
Can PREWIT also be used outside the food industry?
Petr Jalůvka: Why not. We primarily build it for companies that carry out promotional and non-promotional sales of goods with short consumption. The product mix that other manufacturers also have is relatively large. And
PREWIT is designed to predict and plan sales and production, provide insight into inventory volume, inventory movement, and more. It’s important for every company to respond flexibly to customer requirements and make the entire supply chain as efficient as possible. PREWIT can help with that.
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