The problem
The ongoing transformation of the distribution sector for periodical publications requires a focus on core competencies for companies and their deep knowledge of customers. Strategies towards the exploitation of experience stored in historical information in daily distribution operations are increasingly important.
The optimisation of the operations may bring a competitive advantage in a changing environment such as the present one. Factors such as stagnation in circulation, the increase in the area printed and the price of paper, existing competition between different companies, the use of promotions to drive sales, supply chain integration and increasing technological changes have all contributed to the results of newspaper companies and distributors being threatened by major reductions.
Given this situation, efforts to reduce costs and increase circulation are of initial importance.
The objectives of optimising distribution are different and sometimes conflicting: to reduce returns of unsold copies, and reduce the number of outlets where copies are sold out. If improvement on both at the same time is achieved, costs can be reduced without losing sales or, more importantly, reputation and loyalty.
The solution
AIS has developed a set of solutions for demand forecasting and optimisation of the distribution outlets. A system oriented towards editors, Predeman, and a system geared towards press distributors, Gesdeman.
The main features of Predeman are:
- Forecasting at the point of sale and publication level, with statistical models, Box-Jenkins.
- Support for publications with different publication frequencies.
- Methods for incorporating the experience of the circulating agent and other variables, such as events, promotions and holidays.
- Circulation policy simulators for determining the returns target for points of sale, according to current policy in the organisation.
The most important features of Gesdeman are:
- Predeman module to optimise demand forecast for periodic publications.
- Treatment of special editions and non-periodical publications.
- Relational management of information from publications and agents.
- The segmentation module to perform complex selections of retail outlets and publications based on many criteria.
Demand forecasting systems, Predeman and Gesdeman, provide benefits for distribution companies that have a direct impact on the income statement:
- Reducing the number of unsold copies, calculating the optimal distribution value per outlet, thereby ensuring quality of service.
- Increases sales by reducing the number of outlets that run out of stock and analysis of hidden sales.
- Effective management of the distribution network, using powerful segmentation tools, allowing the print run to respond to last minute changes, etc.
