MrMax Corporation

Automated demand forecasting enables smarter retail operations

Published on 03-Sep-2010

Validated on 16 Dec 2013

"The IBM CPM solution has contributed favorably to our profit-generating structure. It has reduced inventory by 10 percent and product defects to half." - Junya Yuki, SCM Program Manager, SCM Head Office, MrMax Corporation

Customer:
MrMax Corporation

Industry:
Retail

Deployment country:
Japan

Solution:
C-Suite Framework, Express, Smart Work, Smarter Planet, Supply Chain Management, Operational Management, Optimizing IT

Overview

MrMax is a discount retailer founded in 1925 with 42 stores and whose headquarters are located in Fukuoka Prefecture. The company deploys its stores mainly in Kyushu and Chugoku regions (western Japan) and employs over 2,302 employees. After the retailer sensed the early emerging trend of discount retailing in the U.S., a leading country in retail business, it launched its own first discount retail store in 1978 to follow the style. MrMax soon became a pioneer of discount stores in Japan.

Business need:
The existing demand forecasting process for this major Japanese discount retailer had many limitations because it leveraged complementary and isolated systems to forecast demands and place orders based only on past point-of-sale (POS) records. The retailer sought an automated demand forecasting, planning and ordering solution to help it achieve its profitability goals.

Solution:
IBM was engaged to implement its highly innovative Category Profit Management (CPM) solution in the retailer’s headquarters. CPM forecasts demand automatically, and uses an algorithm to pursue profit maximization for a given category of goods. It also provides simulation and analysis capabilities for demand forecasts allowing employees to quickly adjust operations.

Benefits:
· Enables the client to derive new insights to holistically manage the sales floor of stores · Maximizes category profits by interconnecting individually instrumented systems

Case Study

MrMax is a discount retailer founded in 1925 with 42 stores and whose headquarters are located in Fukuoka Prefecture. The company deploys its stores mainly in Kyushu and Chugoku regions (western Japan) and employs over 2,302 employees. After the retailer sensed the early emerging trend of discount retailing in the U.S., a leading country in retail business, it launched its own first discount retail store in 1978 to follow the style. MrMax soon became a pioneer of discount stores in Japan.

Now the company has several shops in Kanto (eastern Japan) area as well, and aims to expand its business actively in the Tokyo metropolitan area. Following the business policy “To make your everyday life more affluent, convenient and enjoyable,” the company carries a variety of daily necessities such as sundry articles, clothes, foods, interior goods and home electric appliances. While Japan’s economy is in a drastic transition, MrMax is focusing on its business growth to achieve 100 million yen in revenue and 300 stores, looking 10 to 20 years ahead. As of March 2009, MrMax has a revenue of 10.2 billion yen.

The Need
The existing demand forecasting process for this major Japanese discount retailer had many limitations because it leveraged complementary and isolated systems to forecast demands and place orders based only on past point-of-sale (POS) records. The retailer sought an automated demand forecasting, planning and ordering solution to help it achieve its profitability goals.

The Solution
IBM was engaged to implement its highly innovative Category Profit Management (CPM) solution in the retailer’s headquarters. CPM forecasts demand automatically, and uses an algorithm to pursue profit maximization for a given category of goods. It also provides simulation and analysis capabilities for demand forecasts allowing employees to quickly adjust operations.

What makes it smarter
· Enables the client to derive new insights to holistically manage the sales floor of stores
· Maximizes category profits by interconnecting individually instrumented systems

For more information
Please contact your IBM sales representative or IBM Business Partner. Visit us at: ibm.com/retail

Products and services used

IBM products and services that were used in this case study.

Hardware:
Storage: DS4700 Express, Storage: TS3100 Tape Library, System x: System x running Windows, System x: System x3250, System x: System x3850 M2

Service:
GBS SCM: Enterprise Asset Management

Legal Information

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