The UK's largest wholesale distributor of CDs, DVDs and computer games has improved its supply chain management using demand-planning software.

Entertainment UK (E.UK), whose clients include WHSmith, Tesco and Woolworths, wanted a clearer view of retail demand to minimise inventory waste and maximise sales.

The firm has installed software from supplier TXT to get more frequent forecasting to match supply to demand, while keeping warehousing and distribution capacity and costs low.

'Before the new system, we did forecasting in twice-weekly batches,' said E.UK supply chain director Phil Streatfield.

'With very short lifecycles for products, sales in the first six weeks are crucial. In the early stages of a new release you want to be re-forecasting more than once a week.

'Distribution centre purchasing to support store replenishment activities were not fully integrated.'

Preliminary implementation work with computational designers at London's Imperial College created algorithms that were programmed into the TXT software in response to E.UK's data processing needs.

'This enabled the TXT system to process sales data from 2,500 to 3,000 stores on average, with some 400 chart titles on a day-by-day basis,' said Streatfield.

'If we want this re-forecasting capability for charts it needs to do more than 50 million calculations each night in a two-hour window, and that brings us a challenge from a systems viewpoint.'

The outputs from E.UK's TXT system then feed its store-replenishment distribution operation, while enabling the fine-tuning of supply and distribution levels.

'It then becomes a fully integrated supply chain system, with inventory planning and cost optimisation,' said Streatfield.

'Lower stock levels are required in store and, because of that, returns levels are reduced and less inventory is needed. It also means that in distribution we need to ship less. And it is more efficient, for the same level of sales in-store.'

The project went live at the end of last year and E.UK is now extending the system. The TXT promotion planning module will be used to co-ordinate product availability with the merchandising campaigns of its suppliers.