Data feels the pulse of demand

Amer Sports needed a better way to predict the demand for its products, as well as sales, in the global market. The company wanted to produce just the optimal amount of products. It needed predictability – that is, data.

The solution was a unique data platform that makes predicting demand and the supply chain more accurate and transparent than ever before. The result is a genuinely data-driven culture of operation, in addition to benefits worth millions of euros.

Starting points

Amer Sports is a Finnish group of customer-focused sports equipment companies. Its internationally known brands include Salomon, Wilson, Atomic, Arc’teryx, Mavic, Suunto and Precor. Amer Sports sells its products to consumers in more than 30 countries through resellers and through its brand stores, outlets and online store.

Amer Sports needed better ways to manage its extensive network of suppliers, as predicting and managing the supply chain had been challenging in terms of procurement, production, deliveries and sales. The company planned and predicted its business operations quarterly, which was slow and not sufficiently accurate. The company had a strong willingness to solve the problem using data – all it needed were the right partners and tools.

Strategy

The company was aiming for a modern, uncomplicated analytics solution to ensure that the stores would not run out of products and to avoid overstocking. Key business goals for supply chain development through analytics included:

• Decreasing the cost of materials
• Improving customer satisfaction and ensuring the availability of products through a well-managed supply chain
• Improving visibility into material streams, from shops all the way to the consumer
• Streamlining internal financial processes through automation and easy-to-use, self-guided business intelligence solutions
• Improving communication between sales and production
• Developing a more agile and transparent culture of operation by making use of data and forecasts, even in operational management and operations
• Accelerating the cycle for making use of data by moving from quarterly reporting towards more real-time forecasting
• Creating a data platform that enables new solutions to be developed on the existing implementation

Solution

Customer and sales data go together well

To improve the management and predictability of the supply chain, Amer Sports and Solita designed and implemented a new platform that combines customer data with sales data and makes it easy to analyse, visualise and share data. Data analysis revealed that it is possible to automate the prediction of demand by combining customer data with sales data from the ERM system. The data also shows how many items of each product are left in each store and when the stock will be sold.

Combined data makes it possible to provide sellers and the entire supply chain with lists of vendors who are running out of stock. Amer Sports’ sellers have been linked to the supply chain and are automatically alerted if a reseller has run or is running out of products. The identification of well-functioning sales channels ensures that stores will never run out of products.

For example, if the blue sports watches supplied by Amer Sports are selling particularly well in a sports shop in Milan, sellers and suppliers will be informed of this through the data platform. A seller can contact the store at the right time and offer more products. This creates additional sales and ensures the availability of products, which considerably increases net sales. In its first year of operation, the data platform increased the sales of sports watches by a few per cent in the fourth quarter, which was the goal. This was achieved by improving the effectiveness of B2B sales by means of sales data, which was possible even at such short notice.

Creating a scalable platform – only the sky is the limit

The solution was developed in an agile manner, in line with the best Lean and DevOps principles. The solution hypothesis was tested directly with end customers, and changes were made to improve usability, based on real user experiences. The functionality of the changes was tested, and once a sufficient level had been achieved, the entire solution was automated, from data uploads to the implementation of the infrastructure.

Scalability was kept in mind throughout the project. The data platform is not sporadic. Instead, the more the service is used and the larger the amount of data that is collected, the better forecasts the service is able to produce. The current use of data is only the beginning – new solutions can be built on the existing data platform in the future, including solutions that make use of artificial intelligence, to provide customers with more personalised services.

Amer Sports’ data platform in brief:

• A powerful tool to support supply chain management and increase sales efficiency was created by combining customer and sales data into a single platform.
• The sellers are aware of the resellers’ stock levels and are able to contact the right resellers at the right time.
• The Microsoft PowerBI and Azure cloud technologies were used to implement the solution. As a result, the entire organisation has quick access to the relevant data.
• The platform offers unlimited opportunities for further development, for making use of artificial intelligence and personalised services, among other options.

Benefits

POTENTIAL FINANCIAL BENEFITS WORTH TENS OF MILLIONS OF EUROS

The prediction of consumer demand offers immense financial potential if it is implemented accurately enough. Using forecasts produced by the data platform, production and the logistics chain can be adjusted optimally to demand at an accuracy of 90 per cent. This can reduce the cost of materials by tens of millions of euros annually by minimising sales lost because of product unavailability and identifying new opportunities for additional sales.

TRANSPARENCY AND AGILITY – LOCALLY AND GLOBALLY

Amer Sports’ data solution enables financial management processes and increases the transparency of self-service BI, offering easy, real-time access to information throughout the organisation. This brings data to the operational level from a hard drive collecting dust at the head office.

“Now we know exactly what the situation is with our products at each store globally. We can predict sales and material streams, from the orders of raw materials all the way to the end customer. Our sales forecasts for the Christmas season, for example, have improved and have helped us plan our purchases of raw materials and our production more accurately than before. We have succeeded in reducing material waste for the benefit of the environment.” Mark Orenius, Amer Sports

A BETTER UNDERSTANDING OF CUSTOMERS’ NEED

The new data platform is delivering exactly what Amer Sports was looking for: better customer knowledge. The data platform has taken the company’s ability to understand and predict customers’ needs to an entirely new level.

“For a reorder business company as Suunto, it is a great advantage to have visibility of how sell through is progressing at customer level. This is the first year we have this advantage, thanks to the tools developed by our data analytics colleagues. It helps us to identify where we have additional reorder opportunities and also where we have sell through challenges, crucial information in both cases.” Alvaro Camin, Global Commercial Director, Suunto.

TOWARDS A DATA-DRIVEN CULTURE OF OPERATION

Letting go of old ways of working and adapting to new ones can be difficult and painful for some organisations. At Amer Sports, however, making use of data met with enthusiasm, and internal processes have become genuinely data-driven over a short period of time.

“The business impact primarily has to do with culture. Previously, we relied on reports and forecasts supplied by the sales organisation, with the data sources varying between countries and teams. Now the head office has data of a consistent quality and is able to monitor consumer demand on a weekly basis and is also able to steer marketing and sales operations at very short notice. This, of course, changes behaviour across the organisation.” Marko Orenius, Director, Digital Business Platform