Section 37
How Asian Paints used forecasting to stock dealers
How do you keep thousands of shades in stock across India without drowning in inventory?
- case
- Success
- years
- 2001
- About half to about three-fourths
- Forecast accuracy · 2001
- 10 days to 3 days
- Monthly planning cycle · 2001
- About 8,000
- Sales invoices per day · 2001
- 01
The situation
Paint demand changes by shade, region and season, and a dealer who lacks the right shade loses the sale. In 2001 Business Today described Asian Paints as India's oldest paint company, launching about four new products a year, each in 100 shades. Its 72 branches had planned supply on their own, and the monthly planning cycle took 10 days.
- 02
The decision
The company linked its branches to a central server and used a shared demand-planning system with a statistical forecasting engine. About 8,000 sales invoices a day were recorded centrally within two minutes, so planners saw real demand quickly.
- 03
The outcome
Business Today reported that forecast accuracy rose from about half with manual methods to about three-fourths, with a target of 90 per cent, and that the monthly planning cycle fell from 10 days to three.