Chun Au Knitting Factory Limited Weaves Retail Intelligence with IBM Cognos Solution

Overview

Challenge:
Chun Au needs to deploy a full-fledged retail management solution that improved its forecasting and budgeting control, while enabling faster decision making.

Solution:
IBM’s partner CES deployed its cesOTB retail management solution that used IBM Cognos TM1 at its core.

Mr. King Chun, Sales & Operation Manager, Chun Au Knitting Factory Limited

Chun Au is no newcomer to the apparel scene in Hong Kong.

For several decades, the garment manufacturer focused on producing the best undergarments available through their own retail brand “Chicks”, as well as for other knitted garment brands. A strong commitment to quality and standards, use of first-class materials, and detailed workmanship have always met their clients’ needs.

Although company reaped success in underwear market, it knew that competition and a changing demography will pose huge challenges to their business sustainability. In September 2003, the company switched gears and conducted a major brand revamp to open up the casual wear market, so injecting vital elements into its highly popular “Chicks” brand. At the same time, for targeting the younger generation, it intensively delved into new product designs and functions to strive for perfection.

Benefit:
The IBM-based solution speeded up analysis and forecasting, improved accuracy, eliminated errors and ensured that business decisions were closely aligned with actual retail market needs.

Thread of Challenges

Moving from a manufacturing focused operation to a retail one needed mindsets to change. The operation had to become less reactive and more proactive in forecasting what the market wanted.

That meant that their merchandising department had to slice and dice data to build different scenarios for both the line managers and senior management. That took time—especially on Microsoft Excel spreadsheets. Populating the tables manually from different systems was also both laborious and wasted more time.

A huge worry was human error. With so much data being transformed into the Excel spreadsheets, a single human error can spell disaster to weeks of effort. At the same time, drilling fast into the color, size and type of apparels was not going to be as easy as a few mouse clicks.

Scenario building was also becoming a challenge. To understand the impact of key decisions, the merchandising department had to build different scenarios manually to predict the outcomes. Since the calculations were done through complex Excel formulae, the decisions were one-way in nature. That meant line managers could hardly contribute to the decisionmaking process even though they were the ones closest to the market and customers.

To compete effectively in a crowded retail market like Hong Kong and lead the industry, Chun Au knew it needed a retail solution that eliminated most repetitive and time-consuming manual processes, provided the ability to proactively build scenarios, and sped up accurate decision-making. And they found it with CES Open-to-Buy (cesOTB), featuring IBM Cognos TM1.

Knitting Benefits together

CesOTB was built by CES, an IBM Partner. The solution is a full-fledged retail management solution that focused on bringing control back to inventory management.

Having the right inventory is often the “Achilles heel” of any good retailer. Without having the right products, retailers will lose mindshare, miss out on customer-spending opportunities and be unable to effectively capitalize on new trends. Too much inventory, on the other hand, can slow down the retailer’s cash flow, reduce profits with too much markdowns, take up valuable warehouse space and complicate warehouse management.

CesOTB was built with these challenges in mind. It enabled Chun Au to conduct what-if and multi-dimensional sales analyses, quickly and accurately.

This allowed the company to facilitate dynamic merchandising planning, use different scenarios to analyze key decisions quickly, and even engage line managers and other departments for bottom-up planning to ensure that key opportunities were not missed or overlook.

Manual population of data from other systems will now be a thing of the past with cesOTB. Well integrated into the Chun Au’s workflow, the system automatically populates tables with different scenarios. This led to a drastic reduction in time wasted on moving data back and forth, and elimination of costly human errors.

“The solution is vital for Chun Au to take better control over its stocks and conduct accurate sales forecasting.”

– Mr. King Chun, Sales & Operation Manager,
Chun Au

Underlying Engine

At the core of cesOTB’s functionality lies the IBM Cognos TM1 engine, which is designed for budgeting, forecasting and analysis. It provides a complete environment to power the development of timely, reliable and effective forecasts and plans.

Besides exceptional performances that sped up calculations, Cognos TM1 allowed Chun Au to drill down to specific product types. It also allowed the company build complex scenarios quickly and easily using large sets of data—and even streamed data.

This allowed the company to align its manufacturing and inventory resources to closely with market needs. The company was also able to quick adjust and even look for ways to reap dividends when there were new opportunities or changes in demands.

An extra benefit of the IBM solution was the user interface. Sporting one that is similar to a Microsoft Excel meant that the merchandising department could quickly gear up without having to go through extensive training.

Conclusion

Chun Au is glad that it chose cesOTB. With its powerful IBM Cognos TM1 engine, the company was able to reduce analysis time significantly.

Headaches over SKU complication and complex formula are now over. Instead, the merchandising department conducts quick bottom-up and top-down analyses that drills down to specific items. The tight integration to Chun Au’s workflow also offloaded 80 per cent of the department’s workload, and eliminated human error.

“The solution is vital for Chun Au to take better control over its stocks and conduct accurate sales forecasting. With it onboard, we can better predict new opportunities, changes and demands, and improve our competitiveness in today’s fast-moving retail market. This is especially important now as we are experiencing exceptional growth since our brand revamp in 2003, with Synovate Research reporting that most people in Hong Kong bought ‘Chicks‘ branded thermal underwear over the years,” said Mr. King Chun, Sales & Operation Manager, Chun Au.